Bushie on Iran and on a Mortgage Rate Freeze
So this week it turns out that U.S. intelligence agencies have determined that Iran gave up its nuclear weapons program in 2003. Bushie knew this months ago, but he has been trumpeting his foolish claim that Iran wants to start WWIII. He is an idiot and as I have been saying for months there is no way that we are going to attack Iran. They are the number 2 producer of oil in OPEC and they have many business deals with countries such as Russia, Germany, China, and India. All of his saber rattling now looks ever more idiotic and has further damaged American credibility on the world stage.
The newest blunder is his administration's negiotiations with mortgage lenders to freeze rates for 5 years on certain sub-prime loans. This is a horrible idea. I don't want people to lose their homes, but the way the mortgage industry works is by securing investors. If you are going to fix rates to bail folks out then you are essentially saying that the market cannot resolve itself. You will push away many investors and threaten the future cash flow of investors that will be needed to finance future mortgages. We are better off allowing the market to shed all of the bad loans quickly rather than try to artificially protect weak folks who cannot afford their homes.
Ultimately, here is what is going to happen - a whole lot of people are going to lose their homes anyway (it will just take longer), future qualified would-be homeowners won't get financing or will get them at higher rates, and the end result will be extend the mortgage crunch which will further slow the economy.