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Volume 11, Issue 36: September 8, 2009
- Housing America Offers Insights on Building Out of the Crisis
- More than Seventy Years After It Began, World War II Still Encrusted in Myths
- The Future of Swiss Bank Secrecy
- Japan’s New Party
- This Week in The Beacon
The collapse of U.S. home prices ignited a financial-market meltdown that precipitated an economic recession that continues to plague the United States and much of the world. What can be done to hasten the recovery of the U.S. housing market? More broadly, how have government housing policies and land-use regulations affected the quantity, quality, and affordability of housing?
Government housing policies and regulations have often worsened the problems they were supposed to correct, according to the expert contributors to the new book Housing America: Building Out of a Crisis, edited by Randall G. Holcombe and Benjamin Powell (Transaction Publishers and The Independent Institute). Affordable-housing mandates, for example, have driven up housing prices by discouraging construction. In some cities, such mandates have imposed an equivalent tax of more than $100,000 per house. Similarly, growth-management policies in some regions have pushed up house prices by six to twelve times the rate of inflation.
Housing America also shows how government policies created the current recession. Two insightful chapters show how the Federal Reserve’s loose monetary policy, and federal pressures on leaders to weaken mortgage-underwriting standards, fostered an unsustainable housing boom. The book also examines the unintended consequences of zoning, building codes, government housing assistance, rent control, impact fees, and eminent domain. A comprehensive study of government regulations that affect housing, Housing America is “must reading” for those who wish to learn the lessons of past policy mistakes and who seek fresh ideas for making housing markets work better.
Praise for Housing America:
“This superb book would provide an outstanding guide for a graduate seminar on housing economics.”
—G. Donald Jud, Professor Emeritus of Economics, UNC, Greensboro
“Housing America is a welcome collection of essays by skeptics of government inventions in housing markets.”
—Robert C. Ellickson, Walter E. Meyer Professor of Property and Urban Law, Yale University
Housing America: Building Out of a Crisis, edited by Randall G. Holcombe and Benjamin Powell
Although it has been christened “the Good War,” other than the defeat of the Nazi regime and Imperial Japan, very little good came out of World War II, Independent Institute Senior Fellow Robert Higgs argues in The Beacon, on the seventieth anniversary of the German invasion of Poland.
Death camps, torture, and the bombing of civilians constituted a moral leap backwards seemingly on the order of millennia, Higgs suggests. The aftermath that followed the war was hardly peaceful: the atrocities of Hitler and Imperial Japan were upstaged by the carnage of Stalin and Mao that World War II arguably made possible.
“World War II is an immense subject,” writes Higgs. “Thousands of books have been written about it from almost every conceivable angle, and thousands more books will probably be written in the years to come. The complexities being so great, nearly everything one might say about it cries out for qualification and clarification. Nevertheless, I am willing to assert that in important regards the prevailing American view of the war rests on a foundation of myths. The entire enterprise of understanding the war needs to be rebuilt from the ground up.”
“World War II: An Unspeakable Horror Now Encrusted in Myths,” by Robert Higgs (9/1/09)
“Seventy Years Ago Today: The Molotov-Ribbentrop Pact,” by Robert Higgs (8/23/09)
Depression, War, and Cold War: Challenging the Myths of Conflict and Prosperity, by Robert Higgs
Video Interview: Robert Higgs on C-SPAN2’s Book TV (4/5/09)
Switzerland’s famous bank-secrecy laws had long made an exception for tax fraud: foreign governments could learn the identity of a Swiss bank customer so long as they presented proof of tax fraud and were backed by the courts. Bowing to pressure from the United States, however, the Swiss government agreed to broaden that exception so as to include tax evasion, and Swiss banking giant UBS is giving Washington the names of 4,450 clients the U.S. suspects of tax evasion. (U.S. regulators wanted to confirm the identities of 52,000 suspected tax evaders, but will settle for fewer in order to minimize diplomatic friction.)
Many Swiss are resentful of foreign meddling with their secrecy laws. Some Swiss are bitter over what they view as UBS’s betrayal of their privacy traditions, whereas others criticize Washington for making Swiss bank secrecy a scapegoat in response to the unpopularity of the U.S. bailout of financial institutions, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.
Because the Swiss place a high premium on back secrecy -- an aspect of the fundamental right to privacy -- they won’t surrender that tradition in the near future. But it will happen eventually, predicts Vargas Llosa. “When it does,” he writes, “the world will continue to have as many tax evaders, money launderers and terrorists as it did when those banking freedoms were protected.”
“The Swiss Scapegoat,” by Alvaro Vargas Llosa (9/2/09) Spanish Translation
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
Lessons from the Poor: The Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa
The Che Guevara Myth and the Future of Liberty, by Alvaro Vargas Llosa
After two decades of economic stagnation, the people of Japan could no longer justify keeping a corrupt ruling party in power. Last month, voters ended more than 50 years of rule by the Liberal Democratic Party and elected in its place the similarly named Democratic Party. Will the new party do any better? This changing of the guard in Japan represents a mixed bag, according to Ivan Eland, director of the Independent Institute’s Center on Peace & Liberty.
Former Prime Minister Junichiro Koizumi attempted to reform the economy by cutting subsidies to inefficient companies and freeing up the labor market -- measures that recognized that Japan’s economic stagnation had much to do with policies that inhibited market-driven efficiency. However, his likely replacement “seems unlikely to continue such reforms and has advocated eschewing ‘American-style capitalism,’” writes Eland. Under the new party, Japan may face renewed public spending, and even larger deficits, than in the past.
Yet the new Democratic Party also promises to tame the bureaucracy. Even more promising, the new party has raised the possibility of reducing Japan’s reliance on the U.S. military. This could reap incalculable benefits for the United States. Writes Eland: “Reducing Japanese dependence on a U.S. defense system could help cut the gaping U.S. budget deficit and lessen the chance that the U.S. would be dragged into unnecessary wars in Asia.”
“Japanese Landslide a Mixed Bag for U.S.,” by Ivan Eland (9/1/09)
Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland
Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
Below are links to the past week’s postings to our blog, The Beacon.
- “To Serve and Obstruct,” by Anthony Gregory (9/8/09)
- “Obama in the Classroom,” by Anthony Gregory (9/8/09)
- “Obama or Palin: The Neocons Win Either Way,” by David Beito (9/8/09)
- “Housing America,” by Randall Holcombe (9/7/09)
- “Bad News: The Real Wage Rate Is Rising,” by Robert Higgs (9/4/09)
- “10 Reasons to Oppose the Sustainability Movement on Your Campus,” by Jonathan Bean (9/3/09)
- “‘Right to Carry’ and the ‘Tragedy of the Commons,’” by David Beito (9/3/09)
- “World War II: An Unspeakable Horror Now Encrusted in Myths,” by Robert Higgs (9/1/09)
- “Conservative Opposition to Afghan War Mounting,” by Anthony Gregory (9/1/09)
