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More Wright and Zywicki on the Consumer Financial Protection Agency:

In a recent post on proposals for paternalistic regulation intended to correct consumer cognitive errors, I linked to my colleague Josh Wright and co-blogger Todd Zywicki's critique of the Obama Administration's proposal for a Consumer Financial Protection Agency. Those interested in the issue might want to check out Todd's podcast on the subject for Reason TV. Josh, in turn, has a Truth on the Market post on the CFPA, which criticizes President Obama's rationale for the agency.

Related Posts (on one page):

  1. More Wright and Zywicki on the Consumer Financial Protection Agency:
  2. Political Ignorance and the Case Against Paternalistic Regulation:
Mike& (mail):
Given Zywicki's steadfast support of subprime lending, including his statement on the VC that subprime lending was not contributing to a housing bubble: Why do you consider him a reliable source on similar issues?

I'm being serious...How wrong does a person need to be before one reconsiders whether a person has the expertise or judgment to opine on these issues?
9.20.2009 11:10pm
Mike& (mail):
Yikes. A quick Google search revealed this recent paper:
Although the bust of the subprime mortgage market has resulted in high levels of foreclosures and even problems on Wall Street, the boom generated unprecedented levels of homeownership, especially among young, low-income, and minority borrowers, putting them on a road to economic comfort and stability.

Seriously?
9.20.2009 11:12pm
Obvious (mail):
I'm not sure why you see a contradiction in these statements, Mike&. If you could go bankrupt if 5% of your loans failed, that would still mean 95% of your loan customers are "on a road to economic comfort and stability."
9.21.2009 12:06am
A. Zarkov (mail):
If you could go bankrupt if 5% of your loans failed, that would still mean 95% of your loan customers are "on a road to economic comfort and stability."

A whole lot more than 5% have gone into foreclosure. Not only that how can one have "economic comfort and stability" under the crushing strain of high mortgage payments? Let's remember those subprime borrowers started off paying at the initial teaser rate-- 1% in most cases. The plan was to refinance to a new loan with a new teaser as housing prices increased to avoid the consequences of the ARM reset. The general rule of thumb is the purchase price of a house should be no greater than three times your gross yearly income. Even now most homes in California a over priced. Not only that, the option ARMs are now in the reset and recast mode-- a second wave is coming.
9.21.2009 1:56am
Fact Checker:
the boom generated unprecedented levels of homeownership, especially among young, low-income, and minority borrowers, putting them on a road to economic comfort and stability.

Except the "boom" was illusory and did little but transfer taxpayer money to Wall Street bankers. Home ownership has returned to historic levels (and by the time the bloodletting is done will probably drop well below historic highs) and the middle class is poorer than it was ten years ago.

Oh, for some paternalistic regulation!
9.21.2009 12:57pm
Fact Checker:
And without a consumer protection agency, how exactly are you supposed to figure out there is lead in your toys. If they were made in the U.S., of course lead paint isn't even available (damn those paternalistic regulations), but to save a few cents a unit, Mattel has decided that they would rather have their toys produced in China. Of course China, that bastion of free-market capitalism, has adopted a "don't ask don't tell" policy about the contents of their toys and Mattel doesn't want to know either. After all, profit doesn't have anything to do with morality.
9.21.2009 1:01pm

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