I need to comment about the Obama housing rescue plan, but I am not ready yet. The big problem is that I get too outraged when I think of bailing people out who took mortgages that were too large for their incomes. This prevents me from thinking straight enough to complete a post.
Fortunately, Willem Buiter has a nice post on this topic. He thinks housing in the US is the biggest racket since Al Capone. Tyler Cowen also has sensible comments. I especially agree that the problem is to get prices to fall so that markets clear, not to artificially support them at a level where they cannot be maintained. But unlike him, I cannot shake the moral outrage.
1 hour ago