Wednesday, July 30, 2008

"A Tale...Full of Sound and Fury, Signifying Nothing"

With President Bush's signature today, the mortgage "bailout" has become law. I don't have time to offer my own complete analysis of the bill right now, but our good friend Kip, Esq. has the best and most useful take on it that I've seen so far in terms of describing it more or less layperson's terms. Kip looks at each of the bill's provisions, and finds that - not surprisingly - the bill achieves approximately nothing in the way of solving the alleged mortgage crisis. To the extent it does anything, it actually incentivizes more of the very behavior that created the problems in the first place (i.e., it encourages home-buying from the riskiest borrowers).

Of course, it does raise the debt ceiling ever-higher (inflation is awesome!) and contains its share of non-germane rent-seeking.

Ultimately, I'd say the bill is proof that the ugliest word in the English language is "bi-partisan." If libertarians can't be an important part of the political establishment of either party, the best we can hope for is that Republicans be good where they're supposed to be good (taxes and spending) and Democrats be good where they're supposed to be good (civil liberties and personal freedoms). But when the two of them get together to do something that is overwhelmingly "bi-partisan," especially the last 8 years or so, the result is just about always really, really bad (think PATRIOT Act). The question regarding why things like this pass is a question I don't have time to answer right now.