Sunday, June 20, 2010

Canada 1 USA 0: the tale of two housing markets

Today the Associated Press asserts, correctly, that Canada's economy is now the envy of the world.  However, the AP misses the big picture as to why.  Take a look at this graph, from the Canadian economics blog Worthwhile Canadian Initiative, showing income-adjusted housing prices in the US and Canada:

There was no housing bubble in Canada.
All the banking regulation in the world won't make me pay more or less for a house unless it changes the size and terms of the mortgage loan I can get. In the USA, our government enacted a major housing stimulus in the 1990s (via Fannie Mae, Freddie Mac, and the Community Reinvestment Act), getting banks to lend people more and more money at lower and lower rates. This caused the decade-long housing bubble, which took our economy down when it inevitably burst. The Canadian government never enacted a housing stimulus, so their housing market remained stable. Canada had no bubble to burst, so they recovered quickly from this recession. That is the lesson we should learn from Canada -- not, as the article suggests, that their centralized and highly-regulated banking system is somehow superior to our own.

Sunday, April 4, 2010

Demonizing the "far-right" in Europe

The Telegraph yesterday published an entire article comparing Hungary's "far-right" Jobbik Party to Nazis and Fascists. But the article's only mention of an actual Jobbik policy is their desire to stop people from "sponging off the state", and to force "anyone claiming benefits to perform public service in return."

The Telegraph states the Jobbik Party identifies the Roma, a.k.a. the "gypsies", as a big part of the "sponging" problem, which I guess could remind people of the anti-ethnic-minority positions of the Nazis and Fascists. But it seems Jobbik's solution is simply to get the Roma, and everyone else, off the public trough. That's a far cry from the Fascists' policy of shipping people "to Hitler's death camps". In fact, considering Hungary's financial situation, getting people off the public trough seems like common-sense good policy.

So why is the Jobbik's rise to power "disturbing" to the Telegraph? Is there really something ugly about them? Or is it the Telegraph's default editorial position that anyone arguing for more personal responsibility and less dependence on government should be compared at length to Nazis and Fascists?