Policy

Story of the Financial Crisis: Burnin’ Down the House with Good Intentions and Lots of Greed

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Last week, the Chairman of the Federal Reserve, Ben Bernanke, told Congress that he didn’t know what to do about the economy and the repeated need for bailouts. This week, the Oracle of Omaha Warren Buffett, Chairman of Berkshire-Hathaway told the press that he couldn’t understand the financial statements of the banks getting the bailout money.  read more »

Restoring the Real New Orleans

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Like so many others, I have long been a visitor to New Orleans. In my case, the first visit was 1979, when we studied the city to influence the design of the new town of Seaside. I have been back often – for New Orleans is one of the best places to learn architecture and urbanism in the United States. My emphasis on design might seem unusual, but it shouldn't be, for the design of New Orleans possesses a unique quality and character comparable to the music and the cuisine that receives most of the attention.

During those visits, sadly, I did not get to know the people – not really. The New Orleanians I met were doing their jobs but not necessarily being themselves. Such is the experience of the tourist.  read more »

How Elite Environmentalists Impoverish Blue-Collar Americans

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The great Central Valley of California has never been an easy place. Dry and almost uninhabitable by nature, the state's engineering marvels brought water down from the north and the high Sierra, turning semi-desert into some of the richest farmland in the world.  read more »

Different Shades of Green

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Last month marked the 15th anniversary of the settlement of Plotkin vs. General Electric, the landmark “greenwashing” lawsuit I filed in 1993. At the time, GE was misleading consumers by selling phony lookalike energy efficient light bulbs that were in fact just old fashioned incandescent wolves in green packaging.

I took no money from the case. But I required G.E. to make labeling changes and to pony up $3.25 million dollars in consumer refunds and donations to environmental and public service groups. The labeling changes made it easier for the manufacturers of real energy efficient light bulbs, which were just then entering the marketplace, to distinguish their products on the shelves.  read more »

One Fundamental Problem: Too Many People Own Homes

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Ben Bernanke made the following statement as he attempted to justify bailing out bad borrowers:

“…from a policy point of view, the large amount of foreclosures are detrimental not just to the borrower and lender but to the broader system. In many of these situations we have to trade off the moral hazard issue against the greater good.” – Ben Bernanke, February 25, 2009

I think he is wrong on this, and the moral hazard issue is only a small part of my objections.  read more »

Don't Mess With Census 2010

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The announcement last week that Congressional Black Caucus members plan to press President Obama to keep the 2010 census under White House supervision, even if the former Democratic Governor of Washington, Gary Locke, is confirmed as Commerce Secretary, brought back memories of a movie I’d seen before — a bad movie.  read more »

Urban Inequality Could Get Worse

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President Obama's stated objective to reduce inequality, as laid out in public addresses and budget plans, is a noble one. The growing income gap – not only between rich and poor, but also between the ultra-affluent and the middle class – poses a threat both to the economy and the long-term viability of our republic.

But ironically, what seems to be the administration's core proposal, ratcheting up the burden on "rich" taxpayers earning over $250,000, could have unintended consequences. For one thing, it would place undue stress on the very places that have been Obama's strongest supports, while providing an unintended boost to those regions that most oppose him.  read more »

Why Homeownership Is Falling – Despite Lower Prices: Look to the Job Market

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By Susanne Trimbath and Juan Montoya

There’s something about “Housing Affordability” that makes it very popular: Presidents past and present set goals around it. The popularity of this perennial policy goal rests on the feel-good idea that everyone would live in a home that they own if only they could afford it. Owning your own home is declared near and far to be the American Dream.

Recently, however, it seems that Americans’ aren’t all having the same dream. Despite improving conditions of affordability, home sales continue to decline.  read more »

The Panic of 2008: How Bad Is It?

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Just how bad is the current economic downturn? It is frequently claimed that the crash of 2008 is the worst economic downturn since the Great Depression. There is plenty of reason to accept this characterization, though we clearly are not suffering the widespread hardship of the Depression era. Looking principally at historical household wealth data from the Federal Reserve Board’s Flow of Funds Accounts of the United States, summarized in our Value of Household Residences, Stocks & Mutual Funds: 1952-2008, we can conclude it’s pretty bad, but nothing yet like the early 1930s.  read more »

The Decline of Los Angeles

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Next week, Antonio Villaraigosa will be overwhelmingly re-elected mayor of Los Angeles. Do not, however, take the size of his margin – he faces no significant opposition – as evidence that all is well in the city of angels.

Whatever His Honor says to the media, the sad reality remains that Los Angeles has fallen into a serious secular decline. This constitutes one of the most rapid – and largely unnecessary – municipal reversals in fortune in American urban history.  read more »