Why do politicians of whatever party love a crisis?
John Stossel gets it in one: “Because ‘crisis’ justifies making big government bigger.”
Nearly all politicians these days are speaking of an economic “crisis” when they aren’t warning about “meltdown,” the worst situation since the Great Depression, etc., etc. Stossel provides some salutary and calming counterwisdom:
Sure, some lenders are skittish while things play out. Some investment banks and brokerage houses are sitting on shaky mortgage-backed securities. But why call that a “crisis”?
Do we have 25 percent unemployment, as we did during the Depression? Do we even have 7.5 percent unemployment, 12 percent inflation and 20 percent interest rates, as we did during Jimmy Carter’s presidency?
There’s a been a loss of jobs in the past two months, but that comes after years of strong job creation — 25 million net jobs in the last 15 years . At 5.1 percent, unemployment is low by historical standards.
And are we really experiencing a mortgage-default “crisis”? No. The Mortgage Bankers Association’s 2007 fourth-quarter survey reports that foreclosures came to 2.04 percent of all mortgages. Many of those were speculators seeking flip profits rather than homeowners losing a dream house. During the quarter, only 0.83 percent of homes entered the foreclosure process. It may get worse — in March, “foreclosure filings, default notices, auction sale notices and bank repossessions rose 5 percent,” Reuters reports. But let’s keep things in perspective: Ninety-eight percent of borrowers are not in foreclosure. Only a small percentage of them are even late in payments.
Read the whole, eminently sane piece here.