Out on Bailout 1
And how does a flair for the obvious seem so revolutionary?
Oh, I forgot. The obvious is too obscure for most economists because, well, it’s not obscure enough. And it doesn’t require long mathematical formulae and fanciful notions about how people behave that are in no way related to how people behave.
The only difference here is that the victims, homeowners and consumers, are the foundation of the economy, and they are hurting because their wages have not kept pace with rising prices.
The celebrated economist Milton Friedman once said that the true test of a theory is its forecasting ability. Batra’s theories easily pass this sterling test.
This is because in the first edition of his book printed in 2006 Batra vividly foresaw the current economic chaos in all its dimensions. He forewarned us about stock market losses, the credit crunch, homeowner defaults and above all soaring unemployment, starting in 2007 and lasting at least till 2010.
The obvious was too obscure for any but liberal economists, who have been all over this thing like a bad suit for years.
But they were (hoick! ptui!) liberals (which we all know is a dirty thing–Rush Limbaugh told us so), so no one listened to them, for they just weren’t serious enough and, besides, their concern for the average Joe and Jane meant they had no Republican crud cred.
Besides, they did not qualify as members of the Masters of the Universe, given their belief that there is more to civilized society than survival of the fattest.
Batra quotation via Alan J. Heavens.
January 19, 2009 at 8:01 am
I wondered if anyone calculated the cost of this:
Pay off everyone’s mortgage below $100,000 (if they owed less than $100,000 give them the difference between the mortgage balance and the $100,000).
Pay $100,000 on mortgages with balances above $100,000 and buy down the interest rate on those mortgages to a 5% fixed rate 30 year mortgage.
Mortgages on the primary residence only (no second or vacation home) and no flippers, investors, or developers.
It would eliminate a lot of “toxic” mortgages, inject money into the credit market, and probably cost less than all these various bailouts.