In response to my Buddy’s recent email linked to an hour-long economic video lecture I sent him this typo heavy reply:
I watched this in part because it was recommended by Mitt Romney’s econ advisor Mankiw. As it began I thought to myself this will be all about the boom and bust cycle or the business cycle and I thought of the tulip bubble in Holland which the Yalie eventually mentions.
He also made the comment that much of what he was saying would be pretty obvious to the layman and indeed it seemed pretty obvious to me. He called the top end home buyers “optimists” but another word for it was gamblers.
I find it ironic that a Romney (Republican) Mankiw econ guy would highlight this because so much of this was a repudiation ofof the new GOP economic orthodoxy. Germans are bad because they who hate Kenysianism want the Greek pound of flesh. The failure to relulate banking by allowing no or low interest home loans is wrong headed so let the FED Reserve do so. Forgive bad debt to underwater home buyers or things will simply get worse.
So what will Mitt do if Mankiw has his way? Has Obama made a big mistake?
Obama wants banks further regulated Republicans don’t. I’m not sure if Obama has giving the Fed more power to insist on higher downpayments is part of the Obama plan. Obama is a Keynsian. Republicans and Germans arent…….except (if memory serves) George HW Bush did forgive debt back during the Savings and Loan crises of the 1980′s’s. I remember lots of conservative home owners objecting to the federal help bailing out incautious home and comercial building buyers.
I’m trying to figure out how any of this lecture is all that surprising. The only thing I find surprising about it is that it should seem surprising.
I suspect Obama would be happy to let underwater homebuyers off the hook. How about Republicans? It seems pretty obvious to me that government short term spending is a curative. Listen (or read) this [from NPR]. Its much shorter
Then I sent my Buddy this grim economic forecast from a liberal economist. It only takes about 45 seconds to read.
I also added the comment that its too bad we are in the throes of a Presidential Election because the Republicans would likely try to thwart Obama from pressuring the Europeans from backing off German enforced austerity.
I do recommend this piece from NPR.