Jim Ulvog

The Great Recession just sort of happened. The Fed had absolutely nothing to do with it.

A long article from the Federal Reserve on the housing bubble and recovery from the great recession doesn’t mention the fed’s role in anything other than generating the recovery. See:  Subprime Mortgage Crisis. Absolutely no mention of the massive role played by easy money and Congressional policy pumping up the housing market.

The first part of the article is called How and Why the Crisis Occurred.

The short paraphrase is the runup in housing prices, increased demand for homes, surge in subprime loans, collapse of prices, and mass of foreclosures kinda’ sorta’ just happened.

No cause mentioned, especially no role assigned to the federal government in general or the Fed in particular.

Let’s look at the article in more detail.

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By Jim Ulvog, ago

Happy Thanksgiving! – “The true patron of this holiday feast – property rights”

The story of how the Pilgrims went from starving to plenty that I didn’t hear in school. In William Bradford’s own words: [youtube=http://www.youtube.com/watch?feature=player_embedded&v=66QdQErc8JQ#t=135] The video title is The Pilgrims and Property Rights: How our ancestors got fat & happy. Communal property was not acceptable to the married menfolk or the Read more…

By Jim Ulvog, ago

200 years of economics history in one editorial, which explains how we got into our current mess

(Cross-post from my other blog, Outrun Change.)

World War I generated most of the horrible disasters we’ve seen in the last 100 years.

With the possible exception of the decline of the Roman Empire, World War I was the greatest disaster in human history.

It contributed mightily to the Great Depression, which fed the Nazi revolution. That in turn led to WWII.

The war unleashed the totalitarian ideologies of communism, fascism and Naziism, which very nearly destroyed Western civilization. Their poisonous legacy lives on in radical Islamic extremism.

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By Jim Ulvog, ago

Lots of blame for the financial crisis of ’08 falls on the federal government

There is a huge amount of blame to be spread for the Great Recession that started in 2008. While the recession technically ended four years ago back in June of 2009, most people in California and lots of charities here are still feeling the effects.

I see exquisitely little discussion of how intentional federal policies created the distortions that led to the financial crisis. An op-ed in the Wall Street Journal by Phil Gramm and Mike Solon help explain why much of the blame belongs to the federal government:  The Clinton-Era Roots of the Financial Crisis.

To make this non-partisan, I’ll point out that the flawed policies from the Clinton administration were ratified, continued, and extended by the Bush administration. Not to worry, both parties have worked lots of overtime to earn their share of blame.

While you can argue on the proportionate blame between the two parties, I’ll point out that regardless of the allocation you determine, 100% of that particular allocation falls on deliberate federal policy.

Initial efforts to persuade private pension plans to fund low-income housing failed. The administration forced (more…)

By Jim Ulvog, ago

Capitalism is awesome because it makes us think historical flukes are normal

Café Hayek explains why Capitalism is Awesome – the amazing performance of capitalism fools us into thinking that wonderful living standards we see today are the world-wide norm across history instead of an aberration compared to what happened during preceding thousands of generations.

Wish I could quote the full comment, but that isn’t right, so consider just this. The free market can

..fool us modern folk into thinking that the lives we lead are normal – fool us into thinking that poverty (rather than wealth) has causes; fool us into supposing that people my age (almost 55), because we still have all of our teeth and aren’t remotely yet decrepit, are “middle-aged” rather than old, ancient, nearly dead by historical standards; …

We also forget that (more…)

By Jim Ulvog, ago