My boss says that most of what comes out of my mouth is stupid, but a say so much that usually there is a gem hiding in the garbage.Â
I’m pretty freaked out by the economic crisis and feel pretty powerless to do anything about it.Â But I just had a thought on how to fix it.Â Its really a stupid idea, but I would like to hear the opinion of my readers.
As I understand it, the crisis on Wallstreet is very similar to the crisis with milk in China. Some complete assholes..some pig fuckers who are unconnected with the human race…decided to put melamine into the milk so they could make an extra buck.Â Government people, paid off by the pig fuckers, looked the other way.Â Companies looked the other way.Â And then people got sick.Â On Wallstreet, some pig fuckers made idiodic debt derivative instruments which went bad.Â These debt instruments are connected with “good” debt, and thus it is hard to seperate it out and hard to value any of the debt products its attached to.And then other idiots actually created insurance products to protect against this un-valuable debt going bad…which did go bad.Â Government, paid off by the pig fuckers, looked the other way.
Now the government wants to capitalize the banks with a boat load of tax money, and they have to give the money out to every bank, so that people don’t start thinking that any particular bank is in trouble, hence needing the handout. So pig fuckers get more money.
But this whole chain started because the real estate bubble burst.Â It gets worse because unemployment rises.Â People get scared, so don’t by houses.Â So the value of houses falls below the value of the debt.Â And people default on the debt.Â Which is tighed up with good debt in the financial system like Melamine in milk.Â A big difference is that China can through away the tainted milk, but US can’t just through away the tainted debt.
Now for my stupid idea.Â What if…what if the government enacted really really tough NATIONAL environmental standards on new housing developments for the next three years. And put all sorts of administrative blocks on building new houses. I mean…what if the government artificially froze the SUPPLY of houses for short period of time. At the same time, loosen restrictions for foreigners WITH MONEY to immigrate to America.Â For the next 6 months, all they need to do to get a greencard is buy a house.Â Oh…and if they come from China they also have to pass a driving test.Â No new supply (or at least, the perception of no new supply), with increased customers (or at least, the perception there of) should drive home prices up.Â Thus, decrease home foreclosures while increasing average prices.Â Less foreclosures means that a greater percentage of the bad debt derivatives are actually good debt.
Could this work? Would this not make people think that what they have is more valuable or will become more valuable? It would not even have to be all over…target restrictions in States that have high foreclosure rates.Â