A simple explanation of the housing market crash
by James Simpson
So many people go into detailed explanations about the housing market crash and what caused it. The simple truth is, it's our own government that caused the crash, and here's how. A generation or two ago, it only took a single income from a middle-class American to afford to buy a home as they started a family.
Due to the fact that our government had removed the pesky gold standard, the government could just print money instead of develop sound economic policy. As it did this, the value of the dollar decrease as a result (aka inflation) and homes became less affordable.
Lower income people were upset and demanded that the government (you know - the geniuses who broke our sound economic system in the first place) anyway ... they demanded the government do something to make home ownership more affordable. So the brilliant minds in our government decided that rather than fix what they broke in the first place, they would forge ahead down a disastrous path and lower the standards that have always been required for people to afford the mortgage on a home, so they created a law called the Community Reinvestment Act.
Unfortunately, the first iteration of this law still maintained a relatively high threshold for the financial stability of those who wanted to borrow. Using race as a factor rather than the ability to afford a home, this law was modified so that virtually anyone who was breathing could get a home – the era of “no doc” loans and “interest only loans” was born.
Well, when this artificially created ‘buyers market’ occurred, the massive number of home seekers caused an imbalance in the free market. This, in short time, created a bubble where demand inflated the value of homes to twice what the market had naturally set them at only a few years earlier.
As for the actual instrument that popped the bubble? Probably a combination of things – short term low rate loans with balloon payments coming due, a natural and regular market correction, who knows exactly. It really doesn’t matter as the fact is that as soon as the people who wouldn't have been able to buy homes before the CRA had a financial hiccup – foreclosures started. Then a snowball effect occurred resulting in the collapse of the mortgage industry. Home prices sank faster than a lead anchor.
What is truly repulsive is that this “compassionate” maneuver to garner votes by our irresponsible politicians ended up harming the economic underclass by yanking the dream of home ownership from under their feet and ruining their credit.
OpinionColumnist@gmail.com
So many people go into detailed explanations about the housing market crash and what caused it. The simple truth is, it's our own government that caused the crash, and here's how. A generation or two ago, it only took a single income from a middle-class American to afford to buy a home as they started a family.
Due to the fact that our government had removed the pesky gold standard, the government could just print money instead of develop sound economic policy. As it did this, the value of the dollar decrease as a result (aka inflation) and homes became less affordable.
Lower income people were upset and demanded that the government (you know - the geniuses who broke our sound economic system in the first place) anyway ... they demanded the government do something to make home ownership more affordable. So the brilliant minds in our government decided that rather than fix what they broke in the first place, they would forge ahead down a disastrous path and lower the standards that have always been required for people to afford the mortgage on a home, so they created a law called the Community Reinvestment Act.
Unfortunately, the first iteration of this law still maintained a relatively high threshold for the financial stability of those who wanted to borrow. Using race as a factor rather than the ability to afford a home, this law was modified so that virtually anyone who was breathing could get a home – the era of “no doc” loans and “interest only loans” was born.
Well, when this artificially created ‘buyers market’ occurred, the massive number of home seekers caused an imbalance in the free market. This, in short time, created a bubble where demand inflated the value of homes to twice what the market had naturally set them at only a few years earlier.
As for the actual instrument that popped the bubble? Probably a combination of things – short term low rate loans with balloon payments coming due, a natural and regular market correction, who knows exactly. It really doesn’t matter as the fact is that as soon as the people who wouldn't have been able to buy homes before the CRA had a financial hiccup – foreclosures started. Then a snowball effect occurred resulting in the collapse of the mortgage industry. Home prices sank faster than a lead anchor.
What is truly repulsive is that this “compassionate” maneuver to garner votes by our irresponsible politicians ended up harming the economic underclass by yanking the dream of home ownership from under their feet and ruining their credit.
OpinionColumnist@gmail.com
Spam is theft, not free speech
Originally published in the Daily Journal
June 3, 2003
by James Simpson
Gov. Mark R. Warner recently signed new anti-spam legislation into law in Virginia. Unfortunately, this will do little to curb the ever-rising tide of junk e-mail.
Even if (and more likely when) a federal law is enacted, spam will continue to flow. The reason is that many spammers operate outside of the United States, and when a federal law is passed, spammers who don't already operate overseas almost certainly will move their operations offshore.
Unsolicited bulk e-mail, otherwise known as spam, has become such a nuisance that pressure from consumers has spilled over from companies to the government. Like many of my friends and family, more than half my daily e-mail consists of spam.
The reason spam is so prevalent is twofold. First of all, it is very inexpensive for the spammer to generate.
And secondly, it works. If no one ever read the solicitations sent to them, occasionally patronizing the services advertised, spammers would not make any money. It would be a waste of their time to participate in a venture that offered no return, so they simply would move on to some other scam.
People hate spam for myriad of reasons. Not only is it unsolicited, but spammers send e-mail indiscriminately. It usually is misleading and quite often contains material that is objectionable to its recipients.
Unlike those who send junk mail, spammers use various tricks to conceal the source of their e-mails, also called ``masking," which prevents an individual from being able to reply to the sender.
Frequently, when a spammer includes a link or e-mail address to be used by a recipient for removal from future e-mails, it's just a way for the spammer to confirm that the e-mail address is legitimate and move it into a higher (i.e., more aggressive) spamming category.
Spammers find e-mail addresses from various sources and add them to their databases. Many of the e-mail addresses in these databases have been obtained from Web sites through the use of a ``spider" program, which scans Web pages recording anything identified as an e-mail address.
They also search for members of AOL who have created a user profile, then copy those screen names into their database. If you post on a message board, create a Web site, or request information from certain Web sites, you are at risk of getting hit with an enormous amount of unwanted and annoying e-mail.
As a Libertarian, my first inclination is to say, ``Hey ... this is just free market advertising like junk mail or telemarketing, so leave it alone." I even have heard some arguments that spam should be protected by the First Amendment as free speech.
However, the real issue here is not free speech, but theft. There are some significant differences between junk mail and spam e-mail that cannot be ignored.
With junk mail - and its annoying twin, telemarketing - the majority of the cost burden is placed on the company doing the advertising. While one could argue that some of the costs are transferred to the consumer, such as a portion of their trash bill for all the junk mail that is thrown away, these costs are negligible at best.
Another annoying advertising technology, known as ``pop-up ads," are part of a company's sales revenue. The Web site or Internet Service Provider you patronize uses these to generate revenue, similar to TV commercials.
You have the option of not supporting these businesses, and they have the choice and ability to limit their ads, or obtain revenue through other sources such as user fees.
Spam, on the other hand, places a majority of the costs on the ISPs it is sent through, which lose members and are obliged to do what they can to meet customer demands. This costs businesses tons of money, much of it in man-hours spent to find ways to satisfy upset customers and the additional servers needed for e-mail.
The cost for this time and effort has to come from somewhere. Ultimately, like the parasites it is modeled after, the costs are placed unduly on the backs of consumers.
This is why as a Libertarian, I support anti-spam legislation. While it will have little effect on spam, it is heading in the right direction by trying to protect consumers from unapparent theft.
For more information on spammers and the businesses that support them, go to http://www.spamhaus.org. This site tracks the world's worst spammers and has advisories and news updates.
OpinionColumnist@gmail.com
June 3, 2003
by James Simpson
Gov. Mark R. Warner recently signed new anti-spam legislation into law in Virginia. Unfortunately, this will do little to curb the ever-rising tide of junk e-mail.
Even if (and more likely when) a federal law is enacted, spam will continue to flow. The reason is that many spammers operate outside of the United States, and when a federal law is passed, spammers who don't already operate overseas almost certainly will move their operations offshore.
Unsolicited bulk e-mail, otherwise known as spam, has become such a nuisance that pressure from consumers has spilled over from companies to the government. Like many of my friends and family, more than half my daily e-mail consists of spam.
The reason spam is so prevalent is twofold. First of all, it is very inexpensive for the spammer to generate.
And secondly, it works. If no one ever read the solicitations sent to them, occasionally patronizing the services advertised, spammers would not make any money. It would be a waste of their time to participate in a venture that offered no return, so they simply would move on to some other scam.
People hate spam for myriad of reasons. Not only is it unsolicited, but spammers send e-mail indiscriminately. It usually is misleading and quite often contains material that is objectionable to its recipients.
Unlike those who send junk mail, spammers use various tricks to conceal the source of their e-mails, also called ``masking," which prevents an individual from being able to reply to the sender.
Frequently, when a spammer includes a link or e-mail address to be used by a recipient for removal from future e-mails, it's just a way for the spammer to confirm that the e-mail address is legitimate and move it into a higher (i.e., more aggressive) spamming category.
Spammers find e-mail addresses from various sources and add them to their databases. Many of the e-mail addresses in these databases have been obtained from Web sites through the use of a ``spider" program, which scans Web pages recording anything identified as an e-mail address.
They also search for members of AOL who have created a user profile, then copy those screen names into their database. If you post on a message board, create a Web site, or request information from certain Web sites, you are at risk of getting hit with an enormous amount of unwanted and annoying e-mail.
As a Libertarian, my first inclination is to say, ``Hey ... this is just free market advertising like junk mail or telemarketing, so leave it alone." I even have heard some arguments that spam should be protected by the First Amendment as free speech.
However, the real issue here is not free speech, but theft. There are some significant differences between junk mail and spam e-mail that cannot be ignored.
With junk mail - and its annoying twin, telemarketing - the majority of the cost burden is placed on the company doing the advertising. While one could argue that some of the costs are transferred to the consumer, such as a portion of their trash bill for all the junk mail that is thrown away, these costs are negligible at best.
Another annoying advertising technology, known as ``pop-up ads," are part of a company's sales revenue. The Web site or Internet Service Provider you patronize uses these to generate revenue, similar to TV commercials.
You have the option of not supporting these businesses, and they have the choice and ability to limit their ads, or obtain revenue through other sources such as user fees.
Spam, on the other hand, places a majority of the costs on the ISPs it is sent through, which lose members and are obliged to do what they can to meet customer demands. This costs businesses tons of money, much of it in man-hours spent to find ways to satisfy upset customers and the additional servers needed for e-mail.
The cost for this time and effort has to come from somewhere. Ultimately, like the parasites it is modeled after, the costs are placed unduly on the backs of consumers.
This is why as a Libertarian, I support anti-spam legislation. While it will have little effect on spam, it is heading in the right direction by trying to protect consumers from unapparent theft.
For more information on spammers and the businesses that support them, go to http://www.spamhaus.org. This site tracks the world's worst spammers and has advisories and news updates.
OpinionColumnist@gmail.com
Driving range plan contradicts park authority's recent surveys
Originally published in the Potomac News
Friday, April 4, 2003
by James Simpson
COMMUNITY MEETING TOMORROW, APRIL 5th - Sponsored by Supervisor Ruth Griggs will be held at 12 Noon in the McCoart building to discuss the Prince William County Park Authority's proposed elimination of the Eagle Scout trail and over 3 acres of wooded parkland to construct a driving range at the Lake Ridge Golf and Marina. It is my hope that after reading this column you will show up to provide support in opposition to this ill conceived plan.
The Park Authority's interest stems from a desire to "expand" a program known as First Tee, which is designed to provide at-risk youth positive values and life skills. While the First Tee program (which I should point out is already established and running successfully at Lake Ridge Golf and Marina) has merit, the expansion of it does not need to be at the expense of an established and popular park in a county that is rife with golf courses and driving ranges sufficient for its needs.
The following are just a few of the reasons that this is a bad idea:
- According to the Park Authority's own 2002 Needs Assessment report; citizens who were asked to rank facilities in order of their importance [Question 31] listed "Open space and parks" as number 2 with 11.5% of the vote, versus "Golf courses" which ranked number 8 with 5.2% responding in favor. Of those facilities mentioned "that did not adequately meet respondent needs" [Question 34], "Open space" was listed as number 4 with 6.5% of the vote and "Hiking trails" following at number 5 with 6.4% of the vote. "Golf courses and driving ranges" came in at number 11 with 3.4% of the vote.
- The program can be established at an existing golf course or driving range. According to a February 2002 Prince William County Office of Planning handout, there are over 20 existing or planned golf courses in the county.
- In this time of budget cuts and tax increases the county will still have to find some way to come up with the $200,000+ needed to meet the $300,000 construction cost. First Tee has only provided a grant of $100,000 to the Park Authority as seed money.
- The 3.5 acres of trees that will be removed are a buffer that protects the Occoquan reservoir; considered to be one of the largest reservoir systems in the US that provides safe drinking water from reclaimed wastewater.
- 14 story poles and netting, which would be dangerous to the Occoquan wild bird population, will be installed to prevent golf balls from leaving the range. It won't be long before lights are needed to keep the range open late enough for it to make a profit, after-all … a power utility, the Northern Virginia Electric Cooperative, has already donated the first set of poles.
- The proposed driving range will be so limited in length that use of restricted flight balls will likely be necessary, negating the benefit of conveying the true trajectory of their swing to practicing golfers.
- The program would better serve the needs of those it was designed to help if an alternative site was chosen closer to the at-risk youth population … which is not in Lake Ridge.
While the Park Authority may have met the minimum necessary requirements for informing the public of this project it is clear to me that it was not done impartially. Placing a public notice in the newspaper (how many people even read those), leaving flyers in the Golf and Marina pro shop, and mailing a greater number of flyers to those who are members of the First Tee program than the surrounding residents hardly makes one agree that adequate notice was provided. It is my understanding that local homeowners associations (e.g. LRPRA and LOCCA/PELT) were not, until recently, provided complete details of the plan.
I fish in the Occoquan and don't like the thought that silt, fertilizer, and pesticides - natural byproducts of building and maintaining a driving range - could kill of or poison reservoir wildlife.
Please come out tomorrow, Saturday April 5th, to learn how you can help protect the Eagle Scout trail. If you are unable to attend the meeting you can still voice your concern by sending email to the Park Authority at bbolt@pwcparks.org.
OpinionColumnist@gmail.com
Friday, April 4, 2003
by James Simpson
COMMUNITY MEETING TOMORROW, APRIL 5th - Sponsored by Supervisor Ruth Griggs will be held at 12 Noon in the McCoart building to discuss the Prince William County Park Authority's proposed elimination of the Eagle Scout trail and over 3 acres of wooded parkland to construct a driving range at the Lake Ridge Golf and Marina. It is my hope that after reading this column you will show up to provide support in opposition to this ill conceived plan.
The Park Authority's interest stems from a desire to "expand" a program known as First Tee, which is designed to provide at-risk youth positive values and life skills. While the First Tee program (which I should point out is already established and running successfully at Lake Ridge Golf and Marina) has merit, the expansion of it does not need to be at the expense of an established and popular park in a county that is rife with golf courses and driving ranges sufficient for its needs.
The following are just a few of the reasons that this is a bad idea:
- According to the Park Authority's own 2002 Needs Assessment report; citizens who were asked to rank facilities in order of their importance [Question 31] listed "Open space and parks" as number 2 with 11.5% of the vote, versus "Golf courses" which ranked number 8 with 5.2% responding in favor. Of those facilities mentioned "that did not adequately meet respondent needs" [Question 34], "Open space" was listed as number 4 with 6.5% of the vote and "Hiking trails" following at number 5 with 6.4% of the vote. "Golf courses and driving ranges" came in at number 11 with 3.4% of the vote.
- The program can be established at an existing golf course or driving range. According to a February 2002 Prince William County Office of Planning handout, there are over 20 existing or planned golf courses in the county.
- In this time of budget cuts and tax increases the county will still have to find some way to come up with the $200,000+ needed to meet the $300,000 construction cost. First Tee has only provided a grant of $100,000 to the Park Authority as seed money.
- The 3.5 acres of trees that will be removed are a buffer that protects the Occoquan reservoir; considered to be one of the largest reservoir systems in the US that provides safe drinking water from reclaimed wastewater.
- 14 story poles and netting, which would be dangerous to the Occoquan wild bird population, will be installed to prevent golf balls from leaving the range. It won't be long before lights are needed to keep the range open late enough for it to make a profit, after-all … a power utility, the Northern Virginia Electric Cooperative, has already donated the first set of poles.
- The proposed driving range will be so limited in length that use of restricted flight balls will likely be necessary, negating the benefit of conveying the true trajectory of their swing to practicing golfers.
- The program would better serve the needs of those it was designed to help if an alternative site was chosen closer to the at-risk youth population … which is not in Lake Ridge.
While the Park Authority may have met the minimum necessary requirements for informing the public of this project it is clear to me that it was not done impartially. Placing a public notice in the newspaper (how many people even read those), leaving flyers in the Golf and Marina pro shop, and mailing a greater number of flyers to those who are members of the First Tee program than the surrounding residents hardly makes one agree that adequate notice was provided. It is my understanding that local homeowners associations (e.g. LRPRA and LOCCA/PELT) were not, until recently, provided complete details of the plan.
I fish in the Occoquan and don't like the thought that silt, fertilizer, and pesticides - natural byproducts of building and maintaining a driving range - could kill of or poison reservoir wildlife.
Please come out tomorrow, Saturday April 5th, to learn how you can help protect the Eagle Scout trail. If you are unable to attend the meeting you can still voice your concern by sending email to the Park Authority at bbolt@pwcparks.org.
OpinionColumnist@gmail.com
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