Was it predatory lending when they gave money to Greece?

Easily the biggest roadblock to reforming America’s bloated, irrational and (often) WTO-inconsistent farm subsidies is the overwhelming bi-partisan support for them. Whether in Congress or the White House, Republican or Democrat, it doesn’t matter - agribusiness gets some L-O-V-E from almost everyone in Washington. For a simple example of this fact, one need only look to the awful legislation introduced this week by Sens. Chuck Grassley (R-IA) and Kent Conrad (D-ND) that would obtusely extend a bevvy of ridiculous ethanol subsidies and the 54-cent-per-gallon tariff on imported sugar ethanol. Of course, these Senators aren’t alone in their blind love for using Americans’ tax dollars to line the pockets of US agribusiness; indeed, you can’t fall down on the House or Senate floor without hitting at least two Congressmen/Senators who issue a near-Pavlovian “Aye” vote every time they hear the words “farm” and “support” used in the same sentence.

We are in a frightening state of affairs, where the government feels the need to commit acts of aggression, through the use of tariffs and quotas, as means of “economic defense.” As even our current experience with China shows, trade wars have a tendency to escalate. It is even more unfortunate that a large proportion of a nation’s academia — supposedly of great erudition — agree with economic policies that will only lead to the destruction of wealth and to political disaster. It suffices to say that if the present rate of intervention continues to accelerate, the future looks dim indeed.

It is these ill-conceived programs that the government sponsors that achieve the opposite of what they are trying to accomplish. If they aid the liquidation rather than trying to reflate prices in a declining market they would achieve their goal of a revived housing market. The housing and CRE markets are simply too large for the government to make any useful impact. While the FHA is now responsible for 30% of residential financing, it cannot stop declining prices. It will just further put taxpayers at risk as we have to bail out yet another agency because of our leaders’ failure to understand economics.

The problem with those who have decided to aim for a more statist society is not just that they have stirred up some reactionary sentiments among the peasant classes. They are attempting to centralize power at a time when the decentralization of knowledge is making centralized power inappropriate and ineffective.