Summary of Recommendations
Housing
- Sever the special status given to the GSEs (Fannie Mae and Freddie Mac).
- Raise the GSEs’ mortgage guarantee fees immediately while they remain in conservatorship.
- Eliminate the geographic price differentials for conforming loan limits for loans purchased by the GSEs.
- Narrow the GSEs’ focus to the financing of the purchase of primary homes.
- Avoid eviction moratoria at the federal, state, and local levels.
- Consider the impact of local regulations on housing affordability, in particular land-use laws and rent control.
- Forbid the GSEs from offering amortization options beyond the traditional 30-year repayment term.
- Terminate the Federal Reserve’s monthly purchases of MBSs and begin diminishing the size of its MBS portfolio.
Labor
- Limit taxes and reduce regulations on businesses.
- Enable wage increases via skills and education using apprenticeship programs, reforms to higher education financing and accreditation, and elimination of double taxation of productivity-boosting investment.
- Enable more flexible contract work by using a common law basis for independent contractor status.
- Abandon legislation and regulations that restrict work such as
- California’s AB5 law and the similar federal PRO Act.
- Do not implement OSHA’s unauthorized vaccine mandate.
- Remove welfare work disincentives such as monthly child payments detached from work.
- Do not force workers into unions.
- End detrimental COVID-19 benefits policies.
- Repeal the Davis–Bacon Act.
Tariffs
- Eliminate Section 232 tariffs on steel and aluminum imports.
- Eliminate tariffs on manufactured goods imports including cars, trucks, and parts.
- Remove Section 201 tariffs on washers to help families.
- Repeal the Jones Act or at least develop a broad-based waiver until the end of the pandemic.
- Eliminate Section 301 tariffs and antidumping and countervailing duties on chassis from China.
Food
- Recognize and address the policies that are hurting sectors across the economy, including the food sector, such as the attack on affordable energy, harmful labor and employment regulation, and numerous tariffs.
- Reject attempts to attack America’s food system and centrally plan it, such as efforts to plan the food system around ideological goals such as climate change. Instead, get out of the way and allow the nation’s farmers, ranchers, truckers, and individuals throughout the food supply to do what they do best: produce and distribute food at low cost for Americans.
- Block the Biden Administration’s efforts to expand the definition of waters of the United States under the Clean Water Act or, at a minimum, ensure that these efforts do not go beyond the definition within the Trump Administration’s Navigable Waters Protection Rule.
- Repeal the federal sugar program.
- Repeal or at least develop a broad-based waiver of the Jones Act until the end of the pandemic.
- Eliminate the “fertilizer tax.”
Energy
- Reject symbolic non-solutions such as sales from the Strategic Petroleum Reserve, prohibiting energy exports, renewable energy mandates, and the multi-agency regulatory war on conventional energy.
- Restore oversight on energy regulations and federal management plans.
- Improve access to energy resources via fracking, strengthened private property rights, and improved access to energy on federal lands.
- Streamline permitting and eliminate policies that inhibit energy delivery such as NEPA and “social cost” or climate mandates.
- Repeal or amend the Foreign Dredge Act to improve American port capacity.
- Repeal the Renewable Fuel Standard.
- Eliminate energy subsidies in federal and state tax codes.
- Expand competitive electricity markets in states and regions.
- Delegate management of federal lands to states.
Personally I think we should just raise taxes and cut spending so the budget is balanced... That would probably do wonders for inflation... And the National Debt.
17 comments:
It would be more realistic to propose reducing the deficit. The deficit is currently too big to eliminate (that would be very radical)
Sever the special status given to the GSEs (Fannie Mae and Freddie Mac).
Do they still exist? But here they not only exist, they are the highest priority for eliminating inflation. I literally have never heard that suggested before. What people hated about these organizations was that they competed with private lenders as a private lenders. They made it a little easier to buy homes, probably lowered interest rates a barely perceptible amount which means people could ask a barely perceptible amount for their homes. In a world wracked with pandemics, global warming, rigged elections, fascism on the rise, and cryptocurrency ads in the Super Bowl, somehow being mean to financial organizations that crashed and burned a decade ago, just won't have much impact.
Is this the best they have to offer?
==Hiram
Reducing the deficit sounds like one thing, but it is really two things, or actually a multiplicity of things, and a lot of things tend to counteract each other in terms of their impact on inflation. re
To reduce the deficit you have to reduce government spending or increase taxes. Both of those things would tend to have a depressive effect on the economy, one might think. But would they really? Mostly we spend money on the military, and most of that money is wasted in terms of it's impact on the economy. Once you dig a whole in the ground for a nuclear missile that's it; it doesn't further economic activity. But what if we don't dig that whole? What if we let taxpayers keep that money? Will they use it to buy other things, that is, to drive up prices and add rather than detract from inflation?
When we think about the economy, we often impose lines that are irrelevant to economic activity. When we spend money, we spend money. We can do it through government, or through the private sector. We can do it inefficiently or efficiently. We don't save money if money we don't spend publicly is spent privately.
--Hiram
Laurie,
Inflation is simply TOO MUCH MONEY chasing TOO FEW GOODS / RESOURCES...
The Federal government borrowed $7+ TRILLION with more for this year...
Yes it would be painful if we cut spending and raised taxes... But that is what adults do...
Hiram,
If you make it easy and inexpensive for high risk loans, you get more defaults. Not sure why tax payers pay for this?
And the Defense spend mostly goes to employee people and buy supplies. Not sure how many silos we have dug in the last 30 years?
If you make it easy and inexpensive for high risk loans, you get more defaults.
Sure. We see that all around us in ghost malls. Houses, on the other hand, are pretty safe investments. My understanding of the housing crisis in the first decade of the 21st century was that it was too easy to dump off home loans to buyers who were unable or unwilling to understand or assess the risk. I was a regular listener to Soucheray back in those days, and his talk show was full of ad for mortgage lenders. NFL football games would be full of ads for financial institutions most of which seem to be gone now. Lending was out of control back then, and I don't think it was the result of too many mortgages on starter homes in Robbinsdale.
--Hiram
Their were many causes, including people with questionable credit scores being given money to buy that starter home in Robbinsdale.
Did Fannie and Freddie Cause the Mortgage Crisis? The reality is a bit more complex
That piece dealt more with Fannie Mae's problems than what it was exactly that brought down the financial markets. From my perspective, I have always thought that the practices of that time made it impossible to assess risk, or that buying decisions were made independently of risk. I have in my mind an old fashioned model of how home mortgages work, the model you see in "It's a Wonderful Life". Mortgages were issued by local bankers who understood their local markets and who kept the mortgages on their own books. What happened instead is that these mortgages were issued by all sorts of entities who didn't care about the risk because they were going to turn around and sell them to somebody else. Possibly a widow or an orphan in China. I think of that as the Soucheray model, after the mortgage companies who used to advertise on his now defunct radio show.
I am speaking anecdotally here, but I never saw the problem as the result of the vast majority of housing loans, what I think of as the mortgage to the starter home in New Hope. When I think of mortgage defaults of that era, I think of huge loans made for overpriced homes that were bought and sold in markets where it was very hard to assess value. Zimmer's home in Inver Grove Heights would be more of an example. Again, as I see it, the problem is the inability to access risk, and that's always a problem in high end, illiquid markets such as the one for luxury homes.
--Hiram
Any mortgage that requires little down and is given to people who can barely afford the P&I payments is high risk. I am pretty sure Zimmer can make his payments... Even though he unemployed.
The root cause was GREED on the part of all parties involved...
People saw house values increasing rapidly and they wanted in on that "free money"...
The root cause was GREED on the part of all parties involved..
I have a hard time seeing how greed is a root cause of the decision to buy a home, at least when the loan is made to a family looking for a place to live. The problem, I think, came from people who were looking at homes for speculation purposes. People who loaned money to speculators needed to understand that they were assuming greater risk, that the reasons why home loans were considered lest risky no longer applied.
It's okay to invest in risky assets. That's why we have markets in stocks. But to invest successfully it's important to understand the concept of risk generally, and what the specific risks of the investment are. When home loans were bundled, were indeed created to be bundled, the risks could no longer be properly assessed or insured against.
--Hiram
greed: intense and selfish desire for something, especially wealth, power, or food.
A lot of people renters got into homes they could barely afford in good times.
A lot of people upgraded to homes they could barely afford in good times.
And when the good times ended... They lost their homes...
I really would like a new shiny Red Lexus LC and I am sure I could qualify for one... However I certainly am not foolish enough to go out and buy one.
It's houses that matter. Unlike lexuses, houses have always been seen as relatively safe. The S&L crisis of the early 90s blew up because S&L's were loaning to shopping malls and other risky investments. The last one was the result of fueling a real estate bubble.
Inflation as a political concern brings back old memories. Before 9-11, inflation and the business environment that caused it was a big deal. Politicians lived in fear of interest rate hikes which would slow inflation, but at the cost of jobs. Unemployment numbers would be scrutinized every month, and if they fell too much, fears of interest rates hikes would increase. A lot of that changed after 9-11. The political and economic turbulence overwhelmed the kind of tinkering people engaged in before the attack. And for a long time we lived with a crisis mentality and fear which mostly had a dampening effect on the economy. Among other things, we lost an awareness of the old link between a thriving economy and inflation.
That's why I find Republican concerns about inflation. To slow down inflation, what Republicans are asking for without seeming to know it, is a slower economy. If the problem really is too many dollars chasing too few goods, the classic understanding of inflation, they want to reduce the number of dollars people have. They want to make us poorer. I don't know if that solution is the wrong one. I am not economist at least not in the sense of knowing anything about economics. But when you hear a Republican complain about inflation, ask him just whom he wants to throw out of work, or which jobs he doesn't want to create.
--Hiram
"They want to make us poorer."
Now that is just silly... Nobody has gotten poorer by taking on less debt.
And raising interest rates is just a way to slow people borrowing / spending.
Most people get poorer by taking on loans to pay for things that depreciate.
And workers certainly get poorer as inflation eats their income.
Inflation cuts a number of different ways. We don't want to crucify mankind on a cross of gold, after all.
I have heard Republicans argue that inflation is a tax increase. But most people are debtors, often pretty huge debtors, so for them inflation acts as a tax refund. Inflation means higher prices, but also higher wages.
--Hiram
Inflation works fine for me. My mortgage is set at 3% for the next ~12 years...
Besides... Stocks usual do okay during these periods.
Of course, that raise that was less than the inflation rate kind of sucked...
We like to compare salaries against the rate of inflation, but that's only part of the story. When thinking about household finances, a different way of looking at it is to consider the broader financial picture. In evaluating your wealth, add in not just salary but other things like your home value, your stock portfolio, your retirement plans, and whatever other assets you might have. Considered in total, how are they performing against the rate of inflation?
Something I have said way too much is that rich people don't get rich from their wages; they get rich because their assets appreciate in value. And that's true, not just for the fantastically wealthy, but for those who are careful about money, and make some obvious and reasonable choices about long term savings. Keep in mind that the usual measures to reduce inflation hurt long term investors and savers in the short and mid term. They exert a downward pressure on asset values, they penalize investments, and they depress business performance. All of these are reasons why such measures are difficult to enact. They are reasons why we entrust the decision power to make them to entities that we have attempted at least to insulate from political pressure, like the Federal Reserve Board.
--Hiram
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