More Wright and Zywicki on the Consumer Financial Protection Agency:
In a recent post on proposals for paternalistic regulation intended to correct consumer cognitive errors, I linked to my colleague Josh Wright and co-blogger Todd Zywicki's critique of the Obama Administration's proposal for a Consumer Financial Protection Agency. Those interested in the issue might want to check out Todd's podcast on the subject for Reason TV. Josh, in turn, has a Truth on the Market post on the CFPA, which criticizes President Obama's rationale for the agency.
Related Posts (on one page):
- More Wright and Zywicki on the Consumer Financial Protection Agency:
- Political Ignorance and the Case Against Paternalistic Regulation:
I'm being serious...How wrong does a person need to be before one reconsiders whether a person has the expertise or judgment to opine on these issues?
Although the bust of the subprime mortgage market has resulted in high levels of foreclosures and even problems on Wall Street, the boom generated unprecedented levels of homeownership, especially among young, low-income, and minority borrowers, putting them on a road to economic comfort and stability.
Seriously?
A whole lot more than 5% have gone into foreclosure. Not only that how can one have "economic comfort and stability" under the crushing strain of high mortgage payments? Let's remember those subprime borrowers started off paying at the initial teaser rate-- 1% in most cases. The plan was to refinance to a new loan with a new teaser as housing prices increased to avoid the consequences of the ARM reset. The general rule of thumb is the purchase price of a house should be no greater than three times your gross yearly income. Even now most homes in California a over priced. Not only that, the option ARMs are now in the reset and recast mode-- a second wave is coming.
Except the "boom" was illusory and did little but transfer taxpayer money to Wall Street bankers. Home ownership has returned to historic levels (and by the time the bloodletting is done will probably drop well below historic highs) and the middle class is poorer than it was ten years ago.
Oh, for some paternalistic regulation!
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