L. Glenn Hubbard used to be the chief of President Bush’s Council of Economic Advisers. In today’s Wall Street Journal, he and co-author Christopher Mayer worry that “without policy action house prices are likely to continue falling.”
As someone who would like to own a home someday, I might argue that low housing prices are not necessarily a bad thing. Is there any compelling reason why it’s ok for housing prices to go up, but not down?
This of course, is only the beginning of the article.
They go on to encourage lenders to offer sweetheart mortgage rates to people who may not purchase homes under normal market conditions.
Think about what happened the last time the industry did this. This is terrible advice!
Our economic troubles were caused in part from borrowing too much. The Hubbard and Mayer solution is to borrow even more. They say this without any trace of irony.
It is becoming easier to understand why so many of President Bush’s economic policies were so misguided. With advisers like Hubbard, who needs enemies?
Inertia Wins! 