If you haven’t already, take a gander at a column authored by former treasury secretary and Clinton economic advisor, Larry Summers, in yesterday’s Washington Post.
In it, Summers contends that to truly turn around the nation’s housing market – a key economic indicator and driver – one must in effect, double down on the sector, spending more in both public and private dollars.
“The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending,” argued Summers, “it can be resolved only with more confidence, borrowing and lending, and spending. This is true, above all, of housing policies.”
That’s just dandy. True to the dogma of his former boss, Summers apparently believes we haven’t done enough damage to the housing market through Freddie and Fannie, and Uncle Sam needs to be more involved in driving home construction and sales.
That is best carried out through financing, he posits: “[C]redit standards for those seeking to buy homes are too high and too rigorous.” Can someone quickly get him a history book and turn to the chapters from a few years ago where the housing market began to collapse? The reason wasn’t tightened credit, but rather the exact opposite. Our lending institutions sponsored by the feds such as Freddie and Fannie were practically giving loans to anyone who asked for them – senseless amounts of money with little-to-no credit backing to vouch for the security of the loans.
Now Summers submits that our economy is suffering – with family home construction plummeting by more than 70 percent in some parts of the country.
But let’s turn this entire argument on its head for a minute. I ask: Is new home construction necessarily a good thing? Is it truly an accurate barometer of our country’s economic health? Should it be?
After all, doesn’t the construction of a new home fly in the face of the liberal, anti-growth agenda? More trees and forests must be erased for the timber (assuming we even grow timber in this country any longer; most of it comes from Canadian forests). New plots – perhaps otherwise preserved for conservation purposes – must be surrendered to the invasive species knows as ‘humans.’ More sprawl and consuming of natural resources will take place with new homes. Less bike paths, more roads. Less public transit opportunities to these new subdivisions. Agony to the liberals!