An answer is what every question needs, a result is what every experiment needs. So why aren't we concerned with results? The only thing that seems to be interesting to the general public is a quick blush of results without any real meaning or understanding. Let's take the cash for cars program as a good example. We are quick to ballyhoo about how fast the cars sold, but we forget to analyze what happened and draw some conclusions.
Is there any doubt that one could sell anything to anybody if we reduce the price substantially below the cost of the transaction?
We gave anyone who qualified with a "clunker" $4500 to buy a new non-gas guzzler car, foreign or domestic. The $4500 cost the tax payer $6500, but that will be discussed at another time.
The car dealers sold about 220,000 cars, going through a billion dollars in a week. Did this prime the pump for future and continuing car sales, or was it just another give away? We don't know and won't know because we couldn't be bothered to wait to see what happens. We just had an additional $2 billion added to the program which might prove either that giveaways work, or that auto sales might pick up sometime down the road. Or, if we are really unlucky, we could create a car bubble because the auto companies have started to produce new inventory to meet the demand. The danger is this could turn the give away program into a new giveaway of inventory that was over built on false pretenses that the demand for autos was back.
Even when results are in, we seem to be reluctant to evaluate them before moving ahead again. We have seen the government run Medicare, Social Security and the Post Office, and now they are prepared to put the government in charge of our health. Talk about frightening. Medicare and Social Security would have been okay, perhaps, if they (the government) would have left the money in the funds for starters. Instead, they took the money out of the Trust Funds to cut the deficit (not limited to one political party). Results of those two trust funds would be light years better if they had the missing funds to work with. The post office, on the other hand, would be in good shape if they didn't deliver the mail. The guys who ran the Post Office must have been really great businessmen (not) because they couldn't make money when they were a monopoly in this country. Now two giants are doing well, Fed Ex and UPS (per President Obama), and the Post Office is losing 7 billion dollars a year. Go figure!
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.