There are already investment visas for people who want to buy factories or ethanol plants, so the legal structure for a Home Investment Visa program is largely written. While the flurry of activity a Home Investment Visa program would cause would require some extra workers at the Internal Revenue Service (to collect the extra income in taxes), Homeland Security (to process the visa paperwork), and elsewhere in the government’s bureaucracy, even this spending would be directly tied to jobs and help stimulate the economy.
Note that the multiplier on the “buy a house, get a visa” strategy would be much larger than any possible domestic multiplier since the money would come from outside the economy (and efficiency would improve as well.)
I think there would be considerable support among economists that immigration (buy a house, get a visa), a payroll tax cut and maintaining state and local funding would be reasonably good policies in this recession (albeit not necessarily sufficient) yet these policies seem to be the ones that the political system rejects out of hand.Â (See also Matt Yglesias here and here).Â Now, I can understand rejecting these policies as compared to doing nothing, ala a precautionary principle, but why these policies are rejected compared to taking a trillion dollar gamble is puzzling even to someone like myself schooled in public choice.Â
CNBC is on its big-government kick again, the first real drive for the socialization of risk and the privatization of profits since the Bush-Pelosi Bailout. The subjects in the last half hour ranged from bailing out those who have mad mortgages, bailing out banks who gave bad mortgages, and also bailing out GM because they are too big to fail.
As Tom says in his latest post, controlling the knee-jerk left will be Obama’s biggest challenge, if Obama is elected President. Mortgage bail-outs can be one example. There are a lot of ways to increase affordable housing (such as subsidizing urban light rail and mass transit, which would allow more people to have apartments in the city and commute to work, without having an expensive car), and help the auto industry (such as heavily subsidizing alternative-fuel vehicles).
The other approach is to just write checks, which CNBC and many in the Democratic Party support.
While it’s mostly bad news these days, there is an upside. Among others, the transfer of wealth to oil states is slowed, Russia’s freedom of maneuver is remarkably circumscribed, and China’s role as our banker would make it even harder for Obama to keep his word and pull through on his Sinophobic policies, if he’s elected.
The Bush-Pelosi bail-out passed the House on it second try, its cost now swollen from $700 billion to $850 billion.
The Democratic Party confirmed its status as run by limosine liberals — an upper/lower class alliance against the American middle class
The Republican Party confirmed its status as being run by idiots. While most House Republicans still voted against the Wall Street Bailout, the Republican leadership did everything possible to conflate the economic mismanagement of Democrats with the economic mismanagement of the GOP.
John McCain foolish suspended his campaign to support the bankrupt Bush line, and worked as hard as he could to undermine the House Republicans.
Barack Obama dutifully followed his Party’s leadership in its attempt to nationalize as much real property in the country as possible.
The Republicans demonstrated no ability to handle a complex economic crisis.
The Democrats demonstrated their known ability to manipulate markets, wreck important institutions, and hurt the country.
Whatever the specific fates of the Wall Street firms and their Washington men, it’s hard to think that the US financial system is not irreparably wrecked. What we had before is unlikely to come back. The executive branch sees as its purpose protecting investors from risk, and the legislative branch apparently has ignored the lessons of the 1990s and regressed to economic policies that would be familiar to Adlai Stevenson.
That all said, the candidate with the best economic policies at this point appears to be Barack Obama — prsuming he is lying on international trade, the capital gains tax, and so on. The lack of national health insurance means that the U.S. is the only industrialized country where losing your job means losing your health insurance: this is a systemic break on free trade and creative destruction.
With a word-change here and there, and of course different visuals, BBC’s The Power of Nightmares works remarkably well for the current Financial Crisis.
Of course, a nightmare can manifest itself in reality. It is possible that the cries of Wall Street of Money, the cries of the Administration for Trust, and the cries of Congress for Power are well founded and not just a reflection of their perpetual desire for money, trust, and power.
We’re not given logical arguments for why such a thing might be true, other than vague arm waving, secret documents we can’t access, and the deeply held beliefs of truly incompetent people. Then again, even a stopped clock is right twice a day.