.

Cruel Irony: Minimum Wage

Minimum wage is popular and well accepted, but what does it actually do?

Unemployed youth (Wikimedia Commons)
Unemployed youth (Wikimedia Commons)
Governments do not set wages. We are a free country, and wages are set by agreement. The employer and employee agree on hours, conditions, and wages. If either does not like the arrangement, it ends. Employers are free to hire and fire. Employees are free to go elsewhere.

Minimum wage law does not raise wages. It makes low wage jobs illegal. 

How could that possibly help the poor? The irony is thick, because the very people who need low-wage jobs, those at the bottom rungs on the economic ladder, trying to build reputations and job skills, are the ones cut off by minimum wage.

The idea is that employers will all raise wages for those low-wge jobs to the minimum, so the employees in those jobs will all benefit. However, we know that's not the whole story. Some employers on tight labor budgets will be forced to hire fewer workers, or give employers at the higher wage fewer hours. Some businesses that depend on low-wage workers simply can't afford higher wages, and will have to shut down, or find some other way to get the jobs done. At a higher wage, there is greater incentive to replace employees with machines, if possible. Machines don't go on strike, and don't require benefits.

There is an article in the Huffington Post by Douglas Holtz-Eakin about minimum wage that adds relevant statistics and a few more ironies. For instance, many of the workers at minimum wage are young people in households with substantial incomes. In that case, Minimum wage serves to redistribute wealth from the poor who buy goods and services  from those low-wage businesses to the relatively well-off families of these young people.

As with many government "solutions", the promises and the reality of minimum wage law are far apart. Minimum wage is one of the worst, as it increases unemployment for the very people it purports to help, while redistributing income from the poor to the well off.

A minimum wage hike is often referred to as a "youth unemployment act", because that's the net effect.

Governor Dayton and legislative leaders have hinted at a push to substantially raise Minnesota's minimum wage in the upcoming 2014 session. Let's not do yet more damage to our young people with this misguided policy.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Roy Roscoe December 05, 2013 at 02:44 PM
Thanks for clarifying Joyce. And, he's another "Hahvahd" man just like another National Brain Trust some of us know and love. (I can get sarcastic too). At any rate, Barney was a leading advocate for "affordable housing" and was the lead champion for the beginning of the end in 1992 when quotas were mandated on Freddie and Fannie and standards previously required to lend prime only were reduced to include subprime. Thirty percent of all mortgages had to be made to people below the median income in the communities defined by HUD. HUD was given authority to administer the quotas. On behalf of all the people who lost their homes, are upside down or us more fortunate who just lost some equity that may have never materialized anyway, Thank you Barney. You were a true leader of your lefties! (Sarcasm again).
Roy Roscoe December 05, 2013 at 02:53 PM
Joyce, Thank you for clarifying my misuse of bipartisan. (No sarcasm) I think you know what I meant but anyone who doesn't know my positions would certainly be confused. Obama, from my perspective is divisive, and partisan. Not bipartisan as I mistakenly wrote. That means he placed his self interest above others. In that regard he and I are alike. My question is how does the greed word pertain to this topic? Does anybody think self interest is not dominant in politics?
Donald Lee December 05, 2013 at 03:42 PM
It is undeniable that the combination of the CRA, political pressure, and the fact that Fannie and Freddie were pushed to blindly buy up bundled mortgages and guarantee them pushed banks and mortgage companies to do really dumb things. In fact, if you can originate a mortgage, collect your fee and sell it to Fannie without any liability or long-term cost, why NOT??? That's the environment the bankers lived in. Whose fault is that? I blame them less for yielding to powerful economic incentives than I blame politicians (of all stripes) for setting up those incentives. Note carefully that the mortgage industry is not "un-regulated". Go to any closing and note the big pile of federal paperwork required to meet various requirements and supervisory things. The regulators were ON BOARD (political pressure from folks like B Frank) with the reckless activity. The imperative was to "make housing affordable". There were proposals in the early 2000s to try to put the brakes on this (from the GOP, mostly), but they were pretty wimpy, and were not pushed very hard. The GOP also wanted to be on the side of "affordable housing" and did not fear the consequences as much as they should have.
Roy Roscoe December 05, 2013 at 05:49 PM
Donald is right. I'd put it a little differently: All the cattle will leave the corral to get to the pasture if the gate is opened. But the one cow that kicked the latch that opened the gate is the one taken to the slaughter house. In my opinion Barney Frank comes closest to being that cow.
Joyce December 06, 2013 at 12:15 PM
David Hansen persists in blaming Barney Frank and Fannie and Freddie for the housing bubble and the collapse of the economy, so allow me to introduce a few facts: ----------------- There is some merit to the argument that Frank was less than diligent in his oversight of Fannie and Freddie; however, Frank was in the MINORITY in Congress for most of the time leading up to the housing crisis, which begs the question I've asked more than once, how did one member of Congress, in the minority party, wield so much influence? Did he have super powers, David? -------------- Back in '03, when Frank was claiming that Fannie and Freddie were sound, those two entities had not yet entered the mortgage-backed security market; it is worth noting that in '05, Frank co-sponsored a House bill creating an independent regulator for Fannie and Freddie, a bill which died in the Senate. ------------------ As for Frank's supposed role in creating the housing bubble, his influence must have been broader than that of any other member of the House - the housing bubble and consequent collapse, after all, were GLOBAL phenomena; did Barney Frank somehow force people in Belgium, Ireland, Spain, the United Kingdom, Australian, Norway and Canada to buy houses they could not afford? ----------------- Even if we look only at the United States, it is clear Fannie, Freddie and Barney Frank did not cause the bubble and crash; according to a Federal Reserve study, more than 84 percent of the subprime mortgages in 2006 were issued by private lenders: ----------------- http://www.federalreserve.gov/pubs/feds/2011/201136/index.html --------------- As for the CRA, only one of the top 25 subprime lenders in 2006 was subject to affordable-housing laws: ------------------ http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html
Roy Roscoe December 06, 2013 at 10:31 PM
Joyce, your research needs to go back to 1992. To the point when Frank led the charge to open the gate.
Roy Roscoe December 06, 2013 at 10:32 PM
Imprimis, from Hillsdale College touched well on the subject in November.
Roy Roscoe December 07, 2013 at 10:07 AM
Joyce, What was the function of the CRA? You say nowhere was there a requirement to make loans to unqualified buyers. I think you believe that's true as opposed to using the phrase as a point of contention to make the existence of the CRA sound innocent. I think you would say the CRA existed to help people who live in worse neighborhoods - is it PC to call a bad neighborhood a ghetto - get better housing and ownership in hopes pride would manifest. If you analyze the "how" in how they accomplished that, the only alternative course possible given the practices for screening loans in the day was to reduce lending to qualified borrowers. In other words, the only choices left after the government intervened were to significantly raise the standards in an effort to eliminate loans to historically qualified buyers or to significantly reduce standards to increase loans to unqualified buyers. Those were the only possible ways to fulfill the requirements. I might add, there was not a single advocate anywhere of raising the requirements and reducing the money supply to tempt depression. The status quo was outlawed. Not the CRA, not HUD nor Fannie and Freddie are the sole villains, they all were gang members and government was their leader. I blame the leader the most. It is part of the reason I believe "limiting" the power of government is vital for our survival. Government makes mistakes and it's important to never let government get big enough to save us,so that when it makes those mistakes it destroys us.
Joyce December 07, 2013 at 11:39 AM
David Hansen suggested: 'Joyce, your research needs to go back to 1992. To the point when Frank led the charge to open the gate.' ------------------ I assume David is referring to Rep. Frank's relationship with Fannie Mae executive Herb Moses. That ignores the fact that in the early '90s, when Democrats were still in the majority in the House and Frank's friendship with Moses was ongoing, Frank supported bills to INCREASE regulation and oversight of Fannie Mae, including this one: ======= http://thomas.loc.gov/cgi-bin/bdquery/z?d102:h.r.02900: =========== http://clerk.house.gov/evs/1991/roll278.xml ================= and this one: ------------------ http://thomas.loc.gov/cgi-bin/bdquery/z?d102:h.r.05334: -------------------- http://clerk.house.gov/evs/1992/roll476.xml =============== Once again, David, you are attributing super human powers to Rep. Frank; tell me again, how did Frank cause a world wide housing bubble and crash? How did one Representative convince banks in the UK, in Spain, in Belgium and in other nations to push risky loans to unqualified buyers?
Joyce December 07, 2013 at 11:39 AM
David Hansen wrote: 'Imprimis, from Hillsdale College touched well on the subject in November.' ------------- If that is the case, then please provide a link.
Joyce December 07, 2013 at 11:44 AM
I looked up Imprimis, by the way; included among the contributors: ----------- Contributors to Imprimis have included Jeb Bush,[11][12] Ward Connerly,[13][14][15] Dinesh D'Souza,[16][17] Milton Friedman,[18] Jack Kemp,[19][20] Irving Kristol,[21] Limbaugh,[22] David McCullough,[23][24] Richard John Neuhaus,[25] Sarah Palin,[26] Ronald Reagan,[27] Margaret Thatcher,[28][29] Clarence Thomas,[30][31][32] and Tom Wolfe.[33] ============== http://en.wikipedia.org/wiki/Imprimis ============= An unbiased source?
Tim December 07, 2013 at 11:51 AM
With Obama 7 of 8 jobs created are part time, 35 yr low participation rate in labor as people have left the workforce and given up hope of finding a job
Joyce December 07, 2013 at 12:04 PM
David Hansen wrote: 'Joyce, What was the function of the CRA?' -------------- The purpose was to prevent redlining: ---------------- http://www.cdfa.net/cdfa/cdfaweb.nsf/ordredirect.html?open&id=crafactsheet.html ------------------ David continued: 'n other words, the only choices left after the government intervened were to significantly raise the standards in an effort to eliminate loans to historically qualified buyers or to significantly reduce standards to increase loans to unqualified buyers. Those were the only possible ways to fulfill the requirements.' -------------- No, there were other ways to fulfill the requirements, such as ending the practice of imposing higher interest rates on qualified buyers who happened to be African American, Hispanic or female. The CRA, by the way, did not address mortgages alone; it also addressed commercial business loans which had involved discriminatory lending practices that largely affected communities with high minority populations. The CRA does not impose quotas, by the way; it was targeted at the practice of refusing loans to qualified borrowers who happened to live in minority neighborhoods. ------------------ David Hansen continued: 'The status quo was outlawed. Not the CRA, not HUD nor Fannie and Freddie are the sole villains, they all were gang members and government was their leader.' --------------- So, David, you think it was a fine idea for federally insured banks to refuse loans to qualified borrowers because those borrowers happened to be African American or female? ------------------- The government did not force lending institutions to go on a wild spree of pushing subprime mortgages and then betting on the failure of those same mortgages; the government did not force lending institutions to develop all sorts of exotic financial instruments that inflated the housing bubble and put our economy at risk while enriching the lenders. ------------- http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article ------------------- Government regulations did not cause the recession; if anything, there was too little regulation and oversight: ------------- http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0 ------------------ http://www.forbes.com/sites/stevedenning/2011/11/22/5086/
Smokin' Joe December 07, 2013 at 12:41 PM
Maybe he's trying to follow the French model Tim, if the unemployment rate gets too high just redefine what fulll time is and cut down on workers hours. I read one whackjob the other day that wanted to lower the retirement age, although it would be a nice thing to do if we could afford it. There are too many disincentives to hiring new employees as it is without adding more fixed costs.
Roy Roscoe December 07, 2013 at 12:42 PM
Joyce, discriminating on the basis of race and sex was already outlawed. If that was the intent why so much fuss over a redundant piece of legislation. I don't know why you are arguing Barney Frank himself said he made a mistake... Many years too late. I don't know why you can't glean a few facts out of a "biased" Imprimis? You certainly have used them from more questionable sources in the past. I discovered the Imprimis article well after my research was done. It just happens to summarize much of what I know conveniently for you.
Smokin' Joe December 07, 2013 at 12:50 PM
And Joyce? I was shoveling out houses in North Minneapolis when the idiots decided that everybody in the US should own a home whether they could afford it or not. I talked to the realtors and the bankers and the community organizers, and the only people who didn't know that this was a really, really bad idea in the long run were the poor schmucks who were being told that they could own a house by just signing on the dotted line.
Roy Roscoe December 07, 2013 at 12:52 PM
The government did say in 1992. If you want to make any loans, 30% of them MUST be made to people who have lower than medium incomes as defined by HUD. When in history has income not been a primary component of the borrowing equation? It impacts the ability to pay back. One must assume that any loan they would want to make would be a good loan, or at least in a portion that the good ones would pay for the bad ones. With that singular piece of legislation borrowing became welfare. It's welfare if the ability to pay debt is an owned asset. I think it is as it has measurable value. The welfare enters when the government said some people's ability to pay must be transferred to others who can not and without compensation.
Roy Roscoe December 07, 2013 at 01:09 PM
Frank apologized when many poor people who should not have bought homes, but by the grace of Barney and mostly liberals with a sprinkling of Republicans, made the temptation to get them too great and possible. Many were hurt! Had government not meddled the bubble would probably not been as severe. That is without question. The fact that it was widespread is not a good argument at all. Without Freddie and Fannie securing them, insuring them, they never could have been swapped in the secondary which would have limited the wideness of their spread. Without the government backing the secondary would have been like : Joyce, Bob owes me $50 but I need some cash today. If I give you Bob's IOU will you give me $40 today? You would say "Who is Bob?". It changes when the government says it doesn't matter who Bob is or what his ability to pay back is it's all bundled together 30:70.
Roy Roscoe December 07, 2013 at 01:14 PM
Joyce. Liken lending from 1992 to the crash to a game of musical chairs. Some didn't get a seat when the music stopped. But it was the government that started the game.
Joyce December 07, 2013 at 02:27 PM
David Hansen wrote: 'The government did say in 1992. If you want to make any loans, 30% of them MUST be made to people who have lower than medium incomes as defined by HUD. When in history has income not been a primary component of the borrowing equation? It impacts the ability to pay back. One must assume that any loan they would want to make would be a good loan, or at least in a portion that the good ones would pay for the bad ones. With that singular piece of legislation borrowing became welfare.' ------------ You oppose the purchasing of affordable homes (low cost town homes and condos, for example) by people whose income is below the median? Or, is it just people of color who should not own homes - you know, the people who faced the most discrimination from redlining? ----------- Nowhere, absolutely nowhere, does the law require banks to lend to unqualified borrowers, and nowhere does the law require banks to push riskier subprime loans on people of color who qualified for safer prime loans, though that is exactly what the banks did: -------------- 'The study, entitled "Risk or Race?," revealed that lower-income African-Americans receive 2.4 times as many subprime loans as lower-income whites, while upper-income African-Americans receive 3 times as many subprime loans as do whites with comparable incomes. At the same time, lower-income Hispanics receive 1.4 times as many subprime loans as do lower-income whites, while upper-income Hispanics receive 2.2 times as many.' ========== http://money.cnn.com/2002/05/01/pf/banking/subprime/ ---------------- And: 'Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”... The New York Times, in a recent analysis of mortgage lending in New York City, found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans and 16.1 percent of blacks.)... Loan officers employed other methods to steer clients into subprime loans, according to the affidavits. Some officers told the underwriting department that their clients, even those with good credit scores, had not wanted to provide income documentation. “By doing this, the loan flipped from prime to subprime,” Ms. Jacobson said. “But there was no need for that; many of these clients had W2 forms.” Other times, she said, loan officers cut and pasted credit reports from one applicant onto the application of another customer.' ====== http://www.nytimes.com/2009/06/07/us/07baltimore.html?pagewanted=all ======= And: ' One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans. These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up...' =========== http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?_r=1 ---------------- In addition, I would remind you that the majority of subprime loans were made by institutions NOT subject to the CRA.
Joyce December 07, 2013 at 02:31 PM
David Hansen wrote: 'Frank apologized when many poor people who should not have bought homes, but by the grace of Barney and mostly liberals with a sprinkling of Republicans, made the temptation to get them too great and possible.' ----------- Do you have a source for that claim?
Donald Lee December 07, 2013 at 03:16 PM
You have to wonder - how do banks make money by lending to people who can't pay back the loans? By selling the loans to someone else. Who's doing the buying, and who guarantees the loans? Fannie and Freddie, and FHA. (and more recently the fed) What do Fannie, Freddie, and FHA have in common? They are creatures of government, backed (bailed out) with taxpayer money. Without them, the massive "bubble" would not have happened, because the banks would have been faced with risk. The guarantees, government sponsored "secondary markets", and regulatory pressure to issue loans to people who otherwise would not have qualified (yes, the CRA) provided great incentive to inflate a bubble and reduced the incentive to be prudent. Once those incentives were in place, did others feed at the trough? Of course. With the USA leading the way, would other nations follow? Of course. Would they meet the same fate? Of course. The "regulatory" activity of the 1990s and pre-2008 was aimed at INCREASING the bubble, not preventing it - right up until it burst. Note that today, the regulatory activity is again on re-inflating housing prices, despite the demographics that tell us that this is inappropriate. (We need more nursing homes and assisted living, not single family homes.)
Joyce December 07, 2013 at 05:35 PM
Donald Lee claimed: 'how do banks make money by lending to people who can't pay back the loans? By selling the loans to someone else. Who's doing the buying, and who guarantees the loans? Fannie and Freddie, and FHA.' ------------- No one else was buying bundled mortgages, Donald? Oh, wait: ------------ 'Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble. During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data... Conservative columnist Charles Krauthammer wrote recently that while the goal of the CRA was admirable, "it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity." Fannie and Freddie, however, didn't pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market. What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans. These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.' Read more here: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html#storylink=cpy ------------- Plus: --------------- http://www.cbsnews.com/news/mortgage-mess-who-really-owns-your-mortgage-15-08-2011/ -------------- http://dealbook.nytimes.com/2013/08/12/in-one-bundle-of-mortgages-the-subprime-crisis-reverberates/ --------------- http://krugman.blogs.nytimes.com/2010/06/03/things-everyone-in-chicago-knows/ ------------------ Add to that the fact that there was a housing bubble in many other European nations - did Fannie and Freddie cause those housing bubbles as well?
Smokin' Joe December 07, 2013 at 05:59 PM
Too true Donald, what's scary is that this time there's also a huge political aspect to reinflating the housing prices. It's true that the banks made money during the boom by selling mortgages, but once the old rules were tossed out the mortgage originators were the ones who were pulling in money hand over fist. The originators got paid for making loans, and as long as the loans were bundled and sold before they failed the mortgage companies were under no risk at all as most of them held little or nothing. For that matter, as long as housing prices kept going up, even if a loan failed it could be rewritten or the property resold for an ever higher price. Once Joe Sixpack started refinancing his house every year and buying spec condos in Florida the end was set in stone.
Donald Lee December 07, 2013 at 06:08 PM
I am often puzzled by those who rail against "greed" and blame the housing bubble on "private lending abuse". In the first place, absent the ideological spinning, lending money to people who can't pay you back makes no sense. If you are buying "bundled mortgages" that are composed of bad loans, you will lose your money. One its face, it makes no sense that anyone would do this. Big banks and hedge funds are not stupid. if you read carefully, they did their homework, but they used leverage to the hilt, to maximize profit. That can be called foolish, but is not illegal. Competition often demands it. The CRA, the implicit guarantees, the large role of the Fannie/Freddie/FHA entities did not quite put a gun to the head of the banks, but they did create an environment that was rife with what economists call "moral hazard". Once in place, these incentives minimized risk and maximized profit. The "regulators" were pressuring the players to do MORE of this lending, not less. Political pressure was all toward "more home ownership". In this environment, *everyone* wants to get in on the action. Not only did you have people like Countrywide originating loans, but stock brokers were recommending buying these toxic "bundles" for IRAs. Ratings agencies were recommending them for their individual clients. In the 17th century is was tulips. In the 1970s it was silver. In 200x it was housing. Bubbles happen. They are as natural as the rain. Blaming them on "greed" is like blaming plane crashes on gravity. Regulators have never prevented a bubble, because they get caught up in the frenzy like everyone else. There is no way to fix that unless you find some regulators who are immune to fashion and conventional wisdom. (maybe the insane?) The role of government in this particular bubble was not so much to cause it as to exaggerate it, and to make it much bigger than it otherwise would have been, and to prevent the pain that should have fallen in proportion on those who participated by bailing out those with political power. Note that the "regulators", including the Fed are - to this day - fighting the drop in housing prices. They are trying to re-inflate the bubble. They are also ensuring that no BIG bank goes under, by forcing the big banks to gobble up the little ones. This helps how? I don't know what Joyce thinks should be done, but judging from her posts, I'm betting that she wants to put much more power in the hands of "regulators" to "prevent" problems, and probably to "limit greed". In the first case, she is putting an impossible task on a group that has completely failed in the past, and shows no promise of doing better in the future. In the latter, to the extent she even knows what it means, I don't want our government "limiting greed". That's ambition. It's a good thing. I want profitable businesses. It's called SUCCESS.
Jim Flaherty December 07, 2013 at 07:24 PM
The true housing crises started in San Francisco in 1971, most people don’t know that San Francisco is a small city size wise. Lakeville MN is a larger city. But at that time S.F. was a groovy place to be with liberal life styles accepted. Now the strange part, the next property to escalate was farm land. Farm land in MN in 1970 was around $200.00 an acre, by 1975 the same land was $1000.00 an acre and by 1977 the farm land was an around $2200.00 an acre. Farmers were told by the U of M that the value of the land would continue to go up. At that point quite a few farmers became land speculators and not farmers. By 1980 the same farm land was worth anyone, anyone, Buhler, $800.00 an acre. After the farm crises of the 80’s land stabilized around $1000.00. The housing market remained strong for another 25 years and people were told that house prices would continue to go up. Then came the big housing crises and as we know the price crashed. At this point housing is stabilizing and settling in to somewhat affordable area. Now it is time to look at farm prices again, Farm land in parts on MN is at $20000.00 an acre and mark my words. Crash, boom, mushroom in less than 2 years. History repeats itself if we choose not to learn from it.
Roy Roscoe December 07, 2013 at 11:51 PM
Joyce, I oppose to people being lent money to buy homes they can not afford, and then having those homes taken away when they don't pay their loans. Read "In Praise of Barney Frank" the 2010 Kudlow interview with Frank http://www.cnbc.com/id/38791383 ........this is Larry on Frank "For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into the Great Recession. But in a recent CNBC interview, Frank told me that he was ready to say goodbye to Fannie and Freddie. “I hope by next year we’ll have abolished Fannie and Freddie,” he said. Remarkable. And he went on to say that “it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” He then added, “I had been too sanguine about Fannie and Freddie.”
Donald Lee December 07, 2013 at 11:54 PM
The "liquidity" that the Fed is injecting has to go somewhere. It's not going into consumer inflation, at least according to the measured CPI, but it has to go somewhere. There are many smart people who believe that it is going into various assets - Securities, Farmland, houses again, and things like Gold. The Fed today has a policy that boils down to printing as much money as they can get away with, in hopes of making things better, and it's not working. It WILL rear up and bite us at some point, though. The dollar will suffer. The crash follows the bubble like night follows day. Government involvement will not help. All the "regulation" in the world will not stop it. The only thing that will happen if you give "regulators" more power is that they will aid and abet the bubble on the way up, and face big political pressure to bail out the losers on the way down. Neither is helpful.
Smokin' Joe December 08, 2013 at 05:07 PM
Considering that "our" regulators continue to do everything they can to protect the wealthy, I'm not really sure why anyone on the left defends Obama and his minions, much less give them more power. You'd think that one of these days they'd get tired of saying "Thank you sir, may I have another?" with every new middle class killing program.
Orono December 12, 2013 at 01:56 PM
How is it Joyce still manages to inject her crap when everything she pretends to know has been proven WRONG? I, personally, would be way too embarrassed to continue to pretend to know anything about how this country works. Tell me again how great Obamacare will work and I will tell you the one about the unicorn kicking the Easter Bunny.

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