December 7, 2007 at 7:44 PM #11133Sandi EganParticipant
Topic: Monetary Policy
Paul Advocates Dramatic Housing Reform
The Ron Paul campaign issued a release today which not only rejected Hillary Clinton’s call for government bailouts in the subprime mortgage crisis but also called the government the main culprit in the crisis.
by Walt Thiessen
“Of all the candidates currently running for president, only Ron Paul has a legislative record, spanning four decades, of opposing the monetary policy that led to the current sub-prime mortgage crisis,” says a press release from the Paul campaign dated today. It marked one more way that Paul is so different from his Republican counterparts on the campaign trail.
Unlike typical Republicans on the one hand who avoid talking about the subprime mortgage crisis altogether or Democrats on the other hand who talk about additional form of political bailouts for subprime borrowers, Paul actually addresses the root cause of the problem and proposes that it be directly addressed. He said:
“The root of this crisis, as with past financial and economic crises, results from federal government intervention into the economy, not to anything endemic to the market, nor to the actions of market participants.
“The collapse of the housing market has served as a catalyst for the economy’s latest bust. Various federal mortgage programs through the FHA, Fannie Mae, and Freddie Mac have distorted the normal workings of the housing market.
“The Federal Reserve’s loose monetary policy and lowering of interest rates were a major spur to the housing boom. Low interest rates influence marginal buyers, those who are sitting on the fence, and encourage them to take on a mortgage that they otherwise would not.
“It is time for the federal government to get out of the housing business .”
I can’t begin to tell you how refreshing this sounds! After decades of hearing politicans blame everyone but the government itself for the fiscal messes it imposes upon us, it’s wonderful to hear a politician tell the truth for a change.
Of course, getting out of the housing business is only one step in Paul’s overall plan. He also wants to get the government out of the fiat money business, which would dramatically reduce the chance that the government could engage in such destructive financial behavior in the future.
I can already hear critics to my claims, shouting that the Fed is a private, non-profit organization that works independently of the government. Yes, of course, I believe in fairy tales. The big banks that control the 12 banks of the Federal Reserve do so at no profit to themselves and out of the goodness of their hearts. Yet, somehow, I find such fairy tales to be less convincing than they were when I was very young. Could my skepticism have something to do with hidden 13% inflation rates, a plummeting dollar, soaring energy and housing costs, and stock market pricing that is therefore highly misleading? Nah!
“Ron Paul has long predicted this type of crisis would result from federal interventions into the housing market and excessively low interest rates,” said Ron Paul 2008 campaign chairman Kent Snyder. “Only Dr. Paul has the expertise to explain why we must reject further political intervention into the housing market, such as that advocated by Hillary Clinton.”
I only hope he can be elected in time to actually do something constructive before the whole house of cards has the chance to fall into our collective laps. For all we know, it may already be too late. The patient may already be dead even though the nurse monitoring its life support hasn’t noticed.
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