The American Spectator

Reader Mail

Matters of Faith

12.10.07 @ 12:01AM

(Page 3 of 4)

While Mr. Berlau delivers an excellent essay in favor of free market theory and against government intervention, a view I usually agree with, government action by jawboning, legislation or regulation of markets is sometimes necessary. Free markets sometimes have inefficiencies that cause them either not to work properly or even shut down completely. Most notorious of these inefficiencies is monopoly. Monopolies and their cousins, cartels, have to be regulated by government because their pricing mechanisms don't work, are not governed by supply and demand.

In this case the mortgage market was beginning to freeze up. The financial panic of 1898 and the Great Depression of the '30s were both caused by loss of liquidity and financial panic of the same sort occurring in the mortgage market today. The government through the Fed is taking steps to supply more money into the banking system to increase liquidity and stop any panic by keeping the mortgage market working. Lenders are being asked to ease up on increases in variable rate mortgages to those consumers whose financial qualifications deserve a second look. This happens all the time in businesses that encounter financial difficulty. Finally, the investors whom bought the mortgage-backed securities won't dump them in a panic. Because of the government's actions, the mortgage market will over the next year be nursed back to full health. And home ownership, perhaps the most important step in climbing the economic ladder, will continue to expand in America.
-- Howard Lohmuller
Seabrook, Texas

BLOWING BUBBLES
Re: Randal O'Toole's Paying the Planning Tax:

One might also note that growth management plans exist in states that have been already experiencing growth. That is why the growth management "plans" exist. It is the demand for land for housing, commerce, industry in those cities that led to the increase in housing prices.

I am most familiar with the Phoenix situation, where investors from out of state, seeing the quick increase in house prices, bought houses to hold for relatively short periods of time only to turn around and sell them with a large short term profit. Those buyers could have bought with the ARM mortgages knowing they were going to sell within the year, sometimes even a couple of months. Prices went up so fast that a $50,000 profit could be made on a house costing $300,000 in a couple of months. If the market had been limited just to real house buyers and not also speculators, the housing prices would not have gone up so fast, which, in and of itself, fed the investor frenzy. Mr. O'Toole might want to investigate why it was called a "bubble," and such a classic one at that.

As a Libertarian, Mr. O'Toole might also want to address an alternate method of financing all the urban infrastructure that goes into a house, such as water and sewer lines, treatment plants, road networks, schools, libraries, fire and police resources, etc. Of course, if one were to properly price for the existence of those services, assuming they were provided by private purveyors instead of by the dreaded GOVERNMENT, I would imagine that there would be some hefty front end charges that a housebuilder would have to pay to get "connected" to these various systems. Curiously, the "impact fees" are an attempt by local governments to behave like private entrepreneurs to focus those kinds of costs on the new buyers who request such services. Mr. O'Toole thinks these are just ways of increasing the price of houses for no good reason. Does he think that the only costs are on the actual construction of the house itself? If so, then let builders build houses on lots with no roads, schools, water/sewer lines, etc.

Mr. O'Toole might want to try doing some good science for a change instead of spending his time railing at government "planning."
-- Jean Montgomery

BAD FOR BUSINESS
Re: Doug Bandow's Killing Drivers, Increasing Costs:

I was not surprised by any of the data in the article.

When I was a child, we had station wagons. The last one was a 1973 Pontiac Grand Safari with a 400 CI motor. It had a tow capacity that matched the 1500 class pickup trucks of today. With 5 kids it made the perfect family vehicle. There is not a minivan today that had the capacity and capability of that boat. It could take the whole family with stuff up to northern NH with all those hills without breaking a sweat. Today's "family cars" cannot do that. In hilly terrain they are dangerous because they cannot maintain speed going up long inclines.

My wife and I own two Jeeps. A Wrangler and a Cherokee. Both have the trusty 4.0L I6. Both have over 150K miles. My Wrangler, which is heavily modified for off road use, has survived two crash, neither one my fault, that would have totaled the Saturn wagon I had before the Jeeps. One of which would have resulted in serious injury to my children or me. In that one, a driver of a Honda Civic lost control and came straight across my lane. I hit her broad side at nearly 60MPH. I thank God that no one was in her passenger seat. That side of her car got crushed in. But because me Jeep hit her above her center of gravity, her Honda got held down by my Jeep as we moved to the side of the highway. A lower vehicle likely would have flipped the Honda over and killed the driver.

Luckily, the only thing that went to the graveyard from that crash was her Honda and my radiator. CAFE and its advocates prove once again that Liberals are only pro-choice when we are making choices they approve of. They also prove they are impervious to facts. Particularly when they prove the fallacy of a position they hold.

My next vehicle will be a 4 door Jeep Wrangler Rubicon that I will outfit with bigger bumpers, a 4" lift and at least 35" tires. Need to be able to survive the winter potholes.

Of course the ultimate Truck without needing a CDL is the International MXT. It says, "Yes, I Am Compensating for Something. So What!"
-- Mark F. Kelcourse
Lowell, Massachusetts

FIGHTING WORDS
Re: Ken Shreve's letter (under "The Mormon Question") in Reader Mail's Corrosive Negativity:

Letter to the Editor

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