Thursday, September 18, 2008


Obama and Dodd. Tight as ticks in the Financial Dawg House.

WORKING FROM TOWNHALL.COM, Amanda Carpenter exposes the Democrat connection to the Fannie Mae and Freddie Mac fiascos with her compellingpiece—Obama Owns Housing Bubble Crisis. You will recognize the names and the faces. All Democrats. Excepting McCain who in 2005 and 2006, warned of the approaching problem that the housing giants were hiding behind closed doors, protected by influential Democrats in the legislature, including Chris Dodd and Barack Obama.

There may be nothing new under the sun, but there is certainly nothing new in Washington.

Why do I say this? Because Obama now places the blame on McCain, as old Washington power. And yet, incredibly, here are the words of one of Obama's own top financial advisors:

In Bubble-lusions: Why most real-estate agents aren't getting rich, published in Slate on September 23, 2007, the author wrote, if you want to make money off the housing bubble, you'll have to do it the old-fashioned way: Buy a place with a no-money-down mortgage and then flip it.

In A Reality Check For Home Sellers, published in the New York Times that same day, the author wrote of the conflict between economists and real people, and said people who refuse to sell their houses for less than they paid for them are violating a cardinal rule of the market: stuff is worth what it’s worth. It doesn’t matter what you paid for it...

By being hung up about whether your condominium will sell for what you paid for it, you aren’t just driving yourself crazy trying to get a buyer. You may be threatening the very performance of the economy and driving up the unemployment rate—provided that many others behave in a similar way. What is to be done? Well, if you are holding out for an above-market price to recoup your losses, perhaps you would do well to hear the advice that Professor Joe Blow gives his own family members.

"If you want to sell your house then you list it at the market price and you sell it," he said. If you don’t really want to sell then don’t put it on the market. But don’t say you want to sell and then set the price so high that you spend the year cleaning up every morning, having people walk through your living room and look in your medicine cabinets and reject you. That's just painful—and expensive."

Apparently, this flippant economist's carefully nuanced research offers a simple lesson for everyone out there waiting for a high price to push them back into the black: You must be dreaming.

All of the following are written by Obama economic policy adviser Austan Goolsbee, a provocative thinker whose above language will assuredly not show up in any Obama speech anytime soon.

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