Archive for November, 2011
‘Government Efficiency’: Trying to Turn Cats into Dogs
I’ll have more to say later on Mitt Romney’s speech on federal spending, but his banal call for making government more “efficient” gave me an opportunity to share some good commentary on the subject. In a recent piece criticizing Indiana’s Republican-led state government for not doing “anything substantive to improve Indiana’s budgetary, fiscal or economic position,” Craig Ladwig, editor of the Indiana Policy Review, nails it:
Most troubling of all is that few in the leadership of either party share our belief that government must be kept small for smallness’ sake. The goal is not to run it “like a business” or make it more efficient (consolidate), but to ensure that government is simple enough that average citizens can understand and monitor its workings. The constitutional ability to do that and a passion for self-government (governing one’s self), thereby reaping the rewards and accepting the consequences, are what is meant by American exceptionalism.
Nor does the current leadership appreciate that government cannot by nature be proactively involved in prosperity, that it cannot create wealth but only refrain from taking it away or destroying it. Even Republicans busy themselves in such neo-mercantile schemes as tax rebates for politically favored companies and industries, or training programs to win more contracts from the federal government. At the same time, they slap a tax on entrepreneurial activity as soon as it finds success, most recently in Internet commerce.
Look, Democrats already work tirelessly to extract from us the revenue to support a bloated, systemically flawed and misguided state government. Do they need Republican help?
Milton Friedman famously described those trying to reform government without changing its makeup as being engaged in an attempt to transform a cat into a dog. This General Assembly may learn to bark, but it will still be a cat.
The “government efficiency” snake-oil salesmanship from politicians has become tiresome, especially when it comes from high-profile Republicans like Mitch Daniels and Mitt Romney. Unfortunately, I don’t see too many people “on the right” taking these people to task for it. So kudos to Craig.
This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this past week:
- Dan Mitchell says that sequestration would be a small step in the right direction.
- The Senate vote on rural development subsidies symbolizes just how unserious most policymakers are when it comes to making specific spending cuts.
- Republican hypocrisy on energy subsidies.
- Government cost overruns: One reason to shift infrastructure financing to the private sector is that governments and their contractors often give taxpayers the shaft.
- The Military-Industrial Complex yells “jobs!” in a crowded federal budget.
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Helping to Explain Greece’s Collapse in a Single Picture
Politicians in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting government grow faster than the private sector.
As a result, government is far too big today, and nations such as Greece are in the process of fiscal collapse.
But that’s the good news — at least relatively speaking. Over the next few decades, the problems will get much worse because of demographic change and unsustainable promises to spend other people’s money.
(By the way, America will suffer the same fate in the absence of reforms.)
Here’s one stark indicator of why Greece is in the toilet.
Look at the skyrocketing number of people riding in the wagon of government dependency (and look at these cartoons to understand why this is so debilitating).
By the way, Greece’s population only increased by a bit more than 16 percent during this period. Yet the number of bureaucrats jumped by far more than 100 percent.
And don’t forget that this chart just looks at the number of bureaucrats, not their excessive pay and bloated pensions.
With this in mind, do you agree with President Obama and want to squander American tax dollars on a bailout for Greece?
Indignant over Free Speech Trumping Bullying Protection? Support Choice
Yesterday, the Michigan Senate passed anti-bullying legislation that has anti-bullying legislators, activists, and sympathizers outraged. Why? Because at the insistence of some in the legislature, it includes a provision protecting religious speech.
A video of State Senator Gretchen Whitmer (D-East Lansing) has already gone viral, with the senator railing that ”as passed today, bullying kids is okay if a student, parent, teacher or school employee can come up with a moral or religious reason for doing it.” Similarly, Time columnist Amy Sullivan asks ”why does Michigan’s anti-bullying bill protect religious tormentors?”
I’ll tell you why: because as odious as one might find the religious beliefs of many people, they are entitled to freedom of speech the same as anyone else. That is a basic American right, and all the desire in the world to protect kids from hearing things that might make them feel badly must not change that. Abridge that right, and any speech becomes imperiled if a majority simply deems it unacceptable. And the legislation in question does not protect bullying—if that is defined as physical assaults or threats of such assaults—for religious reasons. It only states that the legislation ”does not prohibit a statement of a sincerely held religious belief or moral conviction of a school employee, school volunteer, pupil, or a pupil’s parent or guardian.”
Of course, being on the receiving end of constant pronouncements that you are doomed to Hell or something similarly hideous would almost certainly become difficult, if not impossible, to bear. It shouldn’t be something that any child is subjected to in school. But how do you balance protecting children against people’s fundamental right to speak?
The answer is that despite all the lofty talk of “democracy” and other empty rhetoric behind public schooling, you cannot protect everyone equally in a government school. No matter what policy a public school or district adopts, government will pick winners and losers. That’s why the only solution to a quandary such as this is educational freedom: Give control of education funding to parents, let them choose among independent schools run by free educators, and enable people to choose schools that share their values. Then all people can select educations for their children that comport with their values and needs, and without government deciding who is more, or less, equal than whom.
A Very American Harold & Kumar
In honor of the release today of A Very Harold & Kumar 3D Christmas, I revisit my thoughts from 2008 on the film series’ view of freedom in America:
The movie Harold & Kumar Go to White Castle was celebrated mostly as a “stoner” movie: smart young Asian guys smoke pot and get the munchies. When I finally got around to watching it, it was funnier than I expected. And very near the end of the movie, after an all-night road trip in which they encountered more obstacles than Odysseus, when Harold finally gives up and says he can’t make the last leg of the epic journey to White Castle, came this wonderful speech from Kumar:
So, you think this is just about the burgers, huh? Let me tell you, it’s about far more than that. Our parents came to this country, escaping persecution, poverty and hunger. Hunger, Harold. They were very, very hungry. They wanted to live in a land that treated them as equals, a land filled with hamburger stands. And not just one type of hamburger, okay? Hundreds of types with different sizes, toppings, and condiments. That land was America! America, Harold! America! Now this is about achieving what our parents set out for. This is about the pursuit of happiness. This night . . . is about the American Dream! Dude, we can stay here, get arrested, and end our hopes of ever going to White Castle. Or, we can take that hang glider and make our leap towards freedom. I leave the decision up to you.
Escaping persecution, poverty, and hunger . . . to find ample food and unlimited choices . . . the pursuit of happiness . . . the American Dream. Yes, I think writers Jon Hurwitz and Hayden Schlossberg were on to something.
And then in the sequel, Harold & Kumar Escape from Guantanamo Bay, after another improbable road trip, the fugitive youths literally dropped in on George W. Bush’s Texas ranch. In the increasingly fantastic plot, the president invited them to join him in hiding from the scary Cheney, shared his pot with them, and then promised to clear up the unfortunate misunderstanding that landed them in Guantanamo Bay. An uninhibited but still skeptical Kumar said, “I’m not sure I trust our government any more, sir.” And President Bush delivered this ringing libertarian declaration:
Hey, I’m in the government, and I don’t even trust it. You don’t have to trust your government to be a patriot. You just have to trust your country.
Harold & Kumar: more wisdom than a month of right-wing talk radio. Hurwitz and Schlossberg get what America is about.
Showdown in Ohio on Public Sector Unionism
It looks as if Ohio will not be following Wisconsin’s lead in attempting serious public-sector labor reform. Polls indicate Buckeye State voters next Tuesday will reject a comprehensive package of labor reforms, known as Senate Bill 5, that the Ohio legislature passed this year with support from Gov. John Kasich (R). Although voters do approve many of the individual elements of the package, including merit pay for teachers and a hike in employee pension and health contributions, opponents have successfully portrayed the whole as an overstuffed “Republican wish list” mixing short-term fiscal savings with longer-term measures aimed at weakening unions’ political strength over the longer term.
Last Tuesday I spoke at Capital University Law School in Columbus as part of a two-on-two debate moderated by Dean Rich Simpson on Issue 2, the measure that would repeal S.B. 5. The speakers defending the union position spent relatively little time defending the particulars of current union benefit packages (which include $3 million pensions for some Columbus police commanders, as the Buckeye Institute has noted, though overall Ohio seems to generate fewer compensation horror stories than do the Northeastern states, Illinois or California). Instead, they concentrated on defending the favorable state laws that put the unions in such a strong bargaining position in the first place. Prominent among these: 1) provisions in current law obligating Ohio counties and towns to bargain with unions over staffing and a wide range of other workplace policies unrelated to wages, health or compensation; and 2) provisions in current law providing that, on the event of a bargaining impasse, the issue will be handed over to an outside labor arbitrator whose say-so will bind the parties.
It happened that these were also the elements of S.B. 5 I thought most important, because over the long term keeping public unions from acquiring a stranglehold on local governance is indeed more important than saving a buck or even a lot of bucks in next year’s budget. Mandatory bargaining on topics of workplace organization (which makes it actively unlawful for the employer to take a principled stand refusing concessions on a given issue) and imposition of contract clauses by un-consented-to outside arbitrators are serious infringements of liberty as applied to private employers. As applied to public-sector employers, these rules have the distinctive vice of preventing voters and taxpayers from deciding how public programs will be run. In floundering public school systems, it is often union work rules as opposed to teacher compensation that foils every reform impulse. Police unions have been known to demand changes in arrest policies and weapons issuance, though it is vital that decisions affecting the citizenry and its everyday liberties be reserved for representatives answerable to the voters and courts.
In 1937 Franklin Delano Roosevelt famously warned against government unionism, much as Dwight Eisenhower was later to warn against the military-industrial complex. In the decades since then, public unionism has been on an extraordinary roll: states have steadily enacted laws more favorable to the unions, to the point where they have come to see such legal boons as a permanent entitlement (“how dare they take away our rights!”). But voters and taxpayers have their rights too—and among them is to back away from an ill-chosen path.
Incidentally, before the debate, the law school audience was asked to register its opinion of S.B. 5, and opposed the reforms by a margin of 27-76 with 27 undecided. Afterward, the vote was 34-82 with 10 still undecided.
The Light Don’t Shine on Higher Ed
I’m accustomed to a standard response when I propose removing government from some part of education: it’s not gonna happen, so forget about it. Often, a popular counter-proposal is then offered: Have government require “transparency” from schools, either of the k-12 or higher variety. Transparency, apprently, is something we can get.
Except, it seems, we almost never do.
A couple of weeks ago I provided numbers exposing the likely failure of transparency in elementary and secondary education. Today, in a surprising twist, someone else reveals transparency futility in higher ed: Education Sector’s Kevin Carey, in a joint report with AEI’s Andrew Kelly. It’s surprising because Carey is one of the people who has dismissed my arguments for removing government as unrealisitc, and instead championed transparency as an achievable solution. In light of this, all credit to him for publishing his study.
The paper, The Truth Behind Higher Education Disclosure Laws, is awfully clear: Transparency requirements in the 2008 Higher Education Opportunity Act have led to either rampant evasion or deception in reporting everything from Pell-recipient graduation rates to employment placement info. Indeed, the report says that “by creating an illusion of transparency and disclosure” the requirements are worse than having no reporting at all.
Sound familiar?
Based on what we know about transparency mandates in education, it seems at least as quixotic to expect regulations to work as to expect that we can begin to remove govenment funding. The reality is that regulations are often far too convoluted and endless for the regulated to comply with even a small fraction of them; they often stymie enforcement for the same reasons; and they are regularly ignored because those who would be regulated have a lot more political sway on their issues than the public.
Unfortunately, repeated failure doesn’t seem to deter those with an abiding faith in regulation, including Carey and Kelly, whose report largely recommends tougher rule enforcement. But go from regular push ups to those hand-clapping ones and you still won’t budge the Earth.
Or maybe I’m wrong (it’s theoretically possible). Maybe government actually can make colleges change for the better. Maybe it’s just that transparency isn’t the answer. Indeed, whether government can move colleges for the better will the subject of a terrific, full-day conference Cato will be hosting on November 18th with the Center for College Affordability and Productivity. Speakers will include CCAP founder and economist Richard Vedder; George Washington University President Emertius Stephen Joel Trachtenberg; Emory University English professor Mark Bauerlein; and many more powerful analysts of the ivory tower. And the discussion, I assure you, won’t just be more regulation versus less taxpayer aid. There will be a wide variety of perspectives offered, and no doubt many surprising debates. I hope you’ll join us, and you can register here!
The Pentagon and Jobs
Desperate to fend off cuts in military spending, the defenders of the status quo are claiming that potential reductions included in the debt ceiling deal’s sequestration provision would result in huge job losses. In September, Leon Panetta suggested that cuts of up to $1 trillion would increase the nation’s unemployment rate by a full percentage point, and put up to 1.5 million people out of work.
Early last week, the Aerospace Industry of America (AIA) jumped in claiming that “more than one million American jobs could be lost as a result of defense budget cuts if the deficit reduction select committee fails to reach agreement on alternative balanced budget solutions….”
The media picked up on the AIA’s press release, but their documentation was flimsy, at best: AIA offered up a five-page summary of the research conducted by George Mason University professor Stephen S. Fuller, and a video of the press conference in which Fuller, AIA CEO Marion Blakey, and Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, railed against the “devastating impact” (Blakey) of military spending cuts and the “economic turmoil” (Buffenbarger) that would result.
Yesterday, nearly seven weeks after the secretary issued his dire warning, Panetta’s office released the findings of a report from Interindustry Forecasting at the University of Maryland (INFORUM) to buttress their claims.
By then, the counteroffensive was already in full swing. Bill Hartung has one of the better assessments that I’ve seen because it includes Bill’s insight into the inner workings of the military-industrial complex, blended with his characteristic wit. The bottom line, he explains, is that the contractors are doing just fine, and they will be in the future. The claims of massive job losses are just the latest in a string of scaremongering tactics aimed at allowing them to hold onto their loot.
More on Nominal Sales and Monetary Policy
In my last post I pointed out that Bill Niskanen, writing in the most recent edition of the Cato Handbook for Policymakers, suggested that the Fed should focus on keeping the economy growing at a nominal rate of around 5 percent per year. This allows for an average annual growth rate of around 3 percent and an annual inflation rate of around 2 percent.
He illustrated the idea with this chart:
This shows how far nominal sales has deviated from the trend of 5.5 percent per year over the last two decades. It ends in early 2008, which was the most recent data available at the time he was writing. According to Niskanen’s theory, values above the line are a sign that monetary policy is too loose, while values below the line are a sign that monetary policy is too tight.
In his analysis, Niskanen focused on the three positive deviations in the chart, which started around 1988, 1999, and 2005, respectively. He argues that too-loose monetary policy during these periods created bubbles, which then popped and sparked recessions.
Karl Smith has helpfully reproduced and extended the chart to the present day. The results are striking:
Here we can see that nominal final sales to domestic purchasers fell way, way below trend starting in late 2008. And not only has it not recovered, it’s actually been falling further behind! Which suggests that according to Niskanen’s rule, monetary policy started to be too tight in mid-2008, and has been too tight ever since.
The Growing Wealth Gap? Fortune Makes up the Numbers
The latest Fortune magazine contains a page on “The Growing Wealth Gap.” The author, Doris Burke, says, “here are some of the facts.” But they aren’t facts, or even official estimates.
The opening line is, “The top 1% owns 36% of all wealth” as of 2009. Yet the latest figure was 33.8 percent in the Arthur Kennickell’s report on the Federal Reserve’s triennial Survey of Consumer Finances (SCF) and that was for 2007, not 2009. There will never be an estimate for 2009 (the next one is for 2010), so something is obviously fishy.
Using actual SCF estimates instead of Fortune’s made-up numbers, the first column in my table shows that the top 1 percent’s share of household net worth briefly spurted to 34.6 percent in 1995, but subsequently stabilized at 33.9% in 1998, 32.7% in 2001, 33.4% in 2004 and 33.8% in 2007.
An alternative source − a study of estate tax data in June 2004 The National Tax Journal by Wojciech Kopczuk of Columbia University and Emmanuel Saez at UC Berkeley − found the top 1 percent’s wealth share has fallen over the years from 26 percent in 1939 to 24.4 percent in 1962, 22% in 1989 to 20.8% in 2000 (shown in the table as 2001). The press repeatedly cites Saez’s estimates of the top 1 percent’s average income up until 2007 (since top incomes fell by 19.7 percent in 2008 and by a similar amount in 2009), but nobody ever mentions Saez’s estimates about the top 1 percent’s share of wealth.
So where did Fortune’s estimate of 36% (actually 35.6%) come from? The author cites the left-of-center Economic Policy Institute (EPI), which turns out to mean a paper by Sylvia Allegretto. (Fortune’s more amateurish sources include Deloitte and somebody named Mark Kroll). The EPI estimates, shown in the second column of the table, purport to be from the SCF but are simply mysterious. The dates were supposedly “chosen based on the data available,” but there is no data for 2009 while there is data for the strangely missing years of 1992 and 1995. Ironically, these enigmatic EPI estimates show the top 1 percent’s share of wealth declining since 1989 or 1998, which is not the impression that the EPI or Fortune hope to convey.
To fabricate a number for 2009, Ms. Allegretto relies on her own “author’s analysis” of an “unpublished analysis” by Ed Wolff “prepared for” the EPI but not on the website of Wolff or the EPI. Allegretto’s inexplicable analysis of Wolff’’s invisible analysis supposedly “updates” the official figures “based on changes in asset prices between 2007 and 2009 using Federal Reserve Flow of Funds data.” But changes in the flow of funds estimates are also rough and incomparable with the SCF, partly because they combine households with nonprofit organizations and unincorporated businesses.
Financial assets of households and nonprofits were worth $78.6 trillion at the end of 2007, according to the flow of funds, while homes were worth only $20.9 trillion and half of that was mortgaged. Allegretto implies that the top 1 percent’s share rose in 2009 because the flow of funds’ estimated 18 percent drop in the value of homes from 2007 to 2009 supposedly exceeded the drop in the value of assets that dominate the top 1 percent’s assets in 2007 – such as unincorporated business (whose value fell by 28.7 percent) and stocks (down 23.5 percent). Even if the flow of funds data confirmed the allegedly greater drop in home values than in, say, stocks, Allegretto’s own figures (her Table 6) show that stocks accounted for 30.8 percent of the wealth of the bottom 95 percent, but only 19.2 percent for the top 1 percent. In any case, home equity is too modest fraction of total wealth to drive the top 1 percent’s share upward at a time when stocks and small businesses were crashing. There is ample evidence (e.g., my forthcoming Wall Street Journal article updating the “new” CBO estimates to 2009) that recessions always drive down the top 1 percent’s share of both wealth and income. For those who obsess over the top 1 percent’s share, including the CBO and the Occupy Wall Street crowd, deep recessions should properly be celebrated as a wonderful decline in “inequality” by their twisted definition.
Fortune does not know what the top 1 percent’s share of wealth was in 2009, and it never will (because the next SCF survey will be for 2010). When the 2010 results are released, however, the top 1 percent’s wealth share will surely be lower than it was in 2007, not higher.
Beckworth, Ponnuru, and Niskanen on Monetary Policy
Economist David Beckworth and conservative commentator Ramesh Ponnuru have an interesting piece in the New Republic blaming the Federal Reserve’s unduly tight monetary policy for the recent recession and current slow recovery:
For the 25 years leading up to our current mess—the period economists have come to call “the great moderation”—the Fed did a pretty good job of stabilizing the economy. The result of its monetary policies was that the economy, measured in current-dollar or “nominal” terms, grew at about 5 percent a year, with inflation accounting for 2 percent of the increase and real economic growth 3 percent. Keeping nominal spending and nominal income on a predictable path is important for two reasons. First, most debts, such as mortgages, are contracted in nominal terms, so an unexpected slowdown in nominal income growth increases their burden. Also, the difficulty of adjusting nominal prices makes the business cycle more severe. If workers resist nominal wage cuts during a deflation, for example, mass unemployment results.
During the great moderation, people began to expect spending and incomes to grow at a stable rate and made borrowing decisions based on it. But maintaining this stability requires the Fed to increase the money supply whenever the demand for money balances—people’s preference for cash over other assets—increases. This happened in 2008 when, as a result of the recession and the financial crisis, fearful Americans began to hold their cash. The Federal Reserve, first worried about increased commodity prices as a harbinger of inflation and then focused on saving the financial system, failed to increase the money supply enough to offset this shift in demand and allowed nominal spending to fall through mid-2009.
That drop in nominal spending was the most severe decline since 1938. Since then, none of the Fed’s much-debated moves toward monetary ease have brought nominal spending back to where it would have been had the expected 5 percent growth been maintained all along. Consequently, incomes are lower, debt burdens are higher, and banks are weaker than they should be.
Beckworth and Ponnuru’s focus on maintaining a steady growth in nominal GDP is very similar to the position espoused by the late Bill Niskanen. Writing in the most recent edition of the Cato Handbook for Policymakers, Niskanen called for the Fed to maintain the growth of nominal domestic spending:
The intent of Congress would be better served and monetary policy would be more effective if Congress instructed the Federal Reserve to establish a monetary policy that reflects both their concerns in a single target. The best such target, I suggest, would be the nominal final sales to domestic purchasers—the sum of nominal gross domestic product plus imports minus exports minus the change in private inventories. First, this is a feasible target: nominal final sales to U.S.-based purchasers are almost completely determined by U.S. monetary policy, whereas the rate of economic growth and the inflation rate are separately affected by a variety of domestic and foreign conditions. Second, this target provides the correct incentives: for any rate of increase in final sales, a reduction of the inflation rate increases the rate of economic growth. Congress is best advised (1) to specify a target rate of increase of final sales and (2) to instruct the Federal Reserve to minimize the variance around this target rate. The target rate of increase of final sales may best be about 5 percent a year, sufficient to finance a realistic rate of economic growth of 3 percent and an acceptable rate of inflation of about 2 percent.
For the past 20 years, actual final sales increased at a 5.4 percent annual rate with an average inflation rate of 2.4 percent, illustrating that a 5 percent annual increase of final sales would be both feasible and a slightly superior target. The primary problem of U.S. monetary policy during this period, as illustrated by Figure 36.1, is that the Federal Reserve overreacted to three financial crises, creating three ‘‘bubbles’’ of aggregate demand—the correction of which caused two subsequent shallow recessions and, most likely, a third.
Niskanen was writing in mid-2008, before the full extent of the financial crisis had become apparent. He worried that the Fed was over-reacting with easy money:
Most of the variation in demand during the past 20 years has been triggered by the Fed’s response to financial crises. A second lesson is that the Fed seems to overreact. A reasonable standard by which to judge the Fed’s response to a financial crisis would be to avoid a decline in the growth of demand relative to the target path. Instead, the Fed’s response to financial crises has led demand to increase relative to the target path. A third lesson is that the necessary measures to deflate the demand bubbles caused by overreacting to financial crises should be expected to lead to a recession.
“This story is not yet over,” Niskanen wrote. The fall in nominal spending in 2008-09 cited by Beckworth and Ponnuru suggests that the Fed may have underreacted to an unusually severe financial crisis.
Helping to Move the Housing Market Along
As I spend a lot of time pointing out how various government proposals are either useless or outright harmful, some of my friends get the impression that I am against ever doing anything. Keeping in mind that I do firmly believe nothing should always be an option (ever hear of “first do no harm”), here’s what we should do to help correct the housing market:
1. Speed up the foreclosure process. The massive shadow inventory of homes yet to hit the market, numbering in the millions, is keeping potential buyers on the sidelines. Why buy now when a future massive increase in supply will likely depress prices more? It is best to get that supply to the market now. We also, by my estimate, have about 500,000 borrowers still in their homes that have not made a single payment in over 2 years. These borrowers will likely never get current.
2. State Attorneys General need to either put-up or shut-up. Holding back lending by depressing bank equity values, and not to mention dragging out the foreclosure process, is a massive 50 state targeting of bank foreclosure practices. If the state AGs have some real evidence, then why aren’t we in court? Either the AGs should go to court, where we can all see the facts, or they should drop what only looks like a shakedown.
3. The Fed should start raising rates. First, what bank wants to make a mortgage at 4% when their cost of funds in a few years will easily be above that? Just like any price ceiling, artificially low rates cause shortages. In this case current Fed policies are reducing the supply of credit, making it harder for potential borrowers to get mortgages (yes, if you can get a mortgage, the price is great). When rates do go up, which they will, such will put downward pressure on prices, better to take that hit now.
4. Subsidize moving on, not staying put. While I am against spending any more tax dollars trying to delay the adjustment of the housing market, if we are going to spend billions, we’d be better off helping to pay households’ rents in a new unit, preferably in a new city where they might have a better chance at finding a job. We should be helping families adjust, not remain stuck in limbo.
5. Exercise recourse when possible. Many federal loans, like FHA, have a recourse option. In the case where borrowers can pay, but simply don’t want to (due to price declines or otherwise), they should be held to account. When FDR did mass re-fis and modifications in 1930s, he also demanded strong recourse, which was regularly exercised. If its harmful for a bank to start a foreclosure, then it’s also harmful for a borrower, who can avoid it, to also do so.
For the sake of brevity, I will continue this list in the future. I suspect I’ve given interested parties plenty here already to debate.
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