Volume 10, Issue 6: February 11, 2008
- How Feds Invited the Mortgage Mess
- Chiles Frustrations Reflect New Realities
- Should the U.S. Weaponize Space?
- Essay Contest on Property Rights and Human Rights
The mortgage crisis did not materialize unexpectedly. Many who blame mortgage bankers for their aggressive lending practices have ignored the political pressures they faced, which prompted them to make home purchases (but not necessarily long-term home ownership) more viable for larger numbers of buyers by weakening their lending standards. According to University of Texas at Dallas economist Stan Liebowitz, legislation such as the Community Reinvestment Act, activist groups such as ACORN, and even the Federal Reserve Bank of Boston are culpable for having encouraged lenders to reach out to those for whom home ownership had been out of reach.
False accusations of institutional racismaccompanied by threats to impose penalties or to block bank mergerspressured lenders to loosen their outdated underwriting criteriafor payment-to-income ratios, credit and savings history, and income verificationwhich had previously disqualified many lower-income loan applicants. In 1992, the Boston Fed published an influential study saying that lenders exhibited racial bias, but Liebowitz found its claim to be unfounded.
That study was tremendously flaweda colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates, Liebowitz writes in the New York Post. Our study found no evidence of discrimination. Yet the political agenda triumphedwith the president of the Boston Fed saying no new studies were needed, and the U.S. comptroller of the currency seconding the motion.
The Real Scandal: How Feds Invited the Mortgage Mess, by Stan Liebowitz (New York Post, 2/5/08)
Money and the Nation State, ed. by Kevin Dowd and Richard Timberlake
Winners, Losers, and Microsoft, by Stan J. Liebowitz and Stephen E. Margolis
Chiles economy is the envy of Latin America, yet its people are in a funk. They are dissatisfied with the quality of their public schools and depressed by recent changes to their transit system. But at least they are no longer angry at other peoples wealth. How best can they move forward?
First, Chiles rulers must recognize that the countrys relatively favorable state has something to do with the reforms that the center-left coalition inherited from the dictator Pinochet. According to Independent Institute Research Fellow Alvaro Vargas Llosa, who spoke recently to Chilean President Michelle Bachelet and former President Ricardo Lagos, then they must recognize the importance of keeping their judiciary free of political favoritism. Chileans feel like consumers, but do not yet feel like citizens, Bachelet and Logo said.
Now that people are weary of the governing coalition, writes Vargas Llosa in his latest column, Chile faces a challenge similar to what Spain faced some years ago: the need for the rightthe child of the military dictatorshipto demonstrate that it is ready to govern under the rule of law. The effect will be not only to bid farewell to the Pinochet syndrome once and for all, but, more importantly in todays modern and democratic Chile, to engage in a new wave of reforms that begins to narrow the gap between an economic environment that is first class and a service environment that for many Chileans is third rate.
ChileBirth Pangs of Citizenship, by Alvaro Vargas Llosa (2/6/08) Spanish Translation
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
The Che Guevara Myth, by Alvaro Vargas Llosa
The fate of space stands at a crossroad. The two main alternatives are: the ratification of an international treaty spelling out exactly what countries are and are not permitted to do in space, and the unilateral pursuit of space dominance by the United States. Will American citizens debate the issue, or will they let policymakers decide it for them? The topic invokes a sense of familiarityas anyone who lived through World War II may recall.
In August, 1945, shortly after the dropping of the two atomic bombs, policymakers published a book outlining the history of the Manhattan Project. The book was meant partly to tell scientists what they could and could not talk about, but it was also meant to foster healthy public debate about political and social questions that would affect all mankind, as Independent Institute Research Fellow Mike Moore explained in a recent piece published by the Secure World Foundation.
Back to the future: Mike Moore urges the adoption of an international space treaty that would keep space demilitarized, lest a dangerous new cold war go into high gear. There is a better way to build the future in space, and working toward a new space treaty is it, he writes. More fundamentally, however, Moore sees enormous value simply in having Americans become more aware of the issueand whats at stake.
The Necessity of Choice, by Mike Moore (Sound Off, Secure World Foundation, 1/31/08)
Upcoming event: Mike Moore will address the question, Is the U.S. Provoking an Arms Race in Space? in Oakland, Calif., February 12, 2008.
Twilight War: The Folly of U.S. Space Dominance, by Mike Moore.
Are property rights human rights? How are they related? What are their similarities and differences? If property rights are human rights, why have they enjoyed fewer legal protections and intellectual champions than have other human rights?
If youre a college student, addressing these questions could win you up to $2,500. If youre an untenured college teacher, you could win up to $10,000.
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