Doing More Harm Than Good
Posted by Jeffrey EllisJan 4
It’s particularly ironic (”it’s like raaaeeeaaaiiiiin“) when even the NY Times calls your liberal policy a failure:
The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Here are a few of the unintended consequences of Obama’s “Making Home Affordable” program, which has lowered mortgage payments for some folks:
- “… desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences …”
- “… some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies …”
- “… some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system …”
So his program has damaged the people it was intended to help, and has slowed the economic recovery.
Politicians who believe they can engineer effective solutions to complex socio-political/economic problems without incurring unintended negative consequences are intellectually arrogant.
3 comments
Comment by Phil on January 4, 2010 at 11:04 am
I contend that these consequences are very much intended. How else can you explain the fact that there are years of verifiable data to support free market principles that the data is just plainly ignored or even diametrically opposed. These people are, dare I say, treasonous? What else can you call the systematic dismantling of the US economy and political framework? I don’t know what else to call it. - Good Morning Jeffrey - you caught me in a mood.
Comment by Jeffrey Ellis on January 4, 2010 at 11:09 am
Phil, I’m trying (hard) to give the benefit of the doubt here. I actually had an additional 2 paragraphs that I deleted before posting, suggesting that many politicians know they can’t avoid these negative consequences but choose to take action anyway for political gain and/or ideological reasons — similar to what you are suggesting. It is also possible (likely, in fact) that there is some denial and other cognitive biases at work, when it comes to ignoring all the historical data of past failures of grand centrally planned solutions, and the successes of the free markets.
Comment by Phil on January 4, 2010 at 11:26 am
Well, maybe since they are in denial, we should engage in a bit of intervention (2010) to help them out of their political power addiction. It seems to have clouded their thinking.