Vacant Housing Starts
Widely hailed as good news, housing starts increased 17.2% in May to annual adjusted rate of 532,000. This certainly means the real estate market and thus the economy are heading back in the right direction. Not so fast there slick. Unfortunately, at the beginning of the 2009, according to Bloomberg, there were 19 million vacant houses in the United States! As of that time, there were 130.8 million housing units, meaning 14.5% of these properties were vacant. While some are seasonal, others dilapidated, and other for rent or for sale, it is still safe to say we have a housing glut. Maybe I’m off my rocker, but I don’t think more houses is what our economy really needs.
In typical Keynesian form, politicians treat the entire economy as an aggregate, instead of a bunch of moving parts that need to be readjusted when one segment gets out of whack. Since the housing market collapsed, politicians have rushed to prop it up by bailing out banks, lowering interest rates, funding housing projects through the stimulus package and what not. Apparently it never occurred to George Bush or Barack Obama that housing was overvalued in the first place and capital needs to find its way into other, more productive areas of the economy. Instead, like a spoiled kid with his parents credit card, they have spent countless dollars acting like an irresponsible parent trying to buy off their spoiled kid with a new toy every week. Instead, perhaps those irresponsible parents should give their spoiled child a book to read instead of distracting him with new toys so… I’m sorry I’m getting my discombobulated analogy all screwed up. Regardless, dealing with the real issues at hand doesn’t seem to be an alternative for our wise, elected officials.
Auditing the Fed
In other news, the Federal Reserve, subject of recent criticism on this blog (see here, here and here), may actually have to shed some light on its recent activities. H.R. 1207: The Federal Reserve Transparency Act of 2009, introduced by Congressman Ron Paul, has garnered 234 co-sponsors, which amounts to over half of the Congress. A similar bill, S. 604, has been introduced by Bernie Sanders in the Senate, but only has two co-sponsors so far. Interestingly enough, Ron Paul is a libertarian and Bernie Sanders is a self-described democratic-socialist. I always find it interesting when socialists and radical free-marketers find themselves in perfect agreement. I guess politics makes strange bed fellows. Regardless, it will be nice to see Ben Bernanke and the very secretive Federal Reserve tell us how they are spending the trillions upon trillions of dollars it is printing up.
Foreign Aid to China?
Finally, whether or not you support foreign aid or believe in global warming, this is simply ridiculous. According to CNS News, U.S. Special Envoy on Climate Change, Todd Stern, assured us all that China will be receiving financial and technological support from the United States in an effort to fight climate change. Oh good lord. I guess I can understand the technology part. After all, China does need to install software in each new computer so they can nobly censor “inappropriate” material from distorting the minds of their citizens. But are we seriously going to give them money for this? They have got to be kidding! China is the United States’ lender and the United States is China’s in-risk-of-being-foreclosed borrower. This would be like going to your bank and asking if they could use a donation right after receiving a notice of default. I guess China might as well accept the money. We very well might not be paying them back what we already owe them.