A Beautiful Idea

[webmaster]

Subject:A Beautiful Idea
By: Theodore Butler and Israel Friedman

Overview: Today, I am publishing two articles by my good friend and mentor, Israel Friedman, Long-time readers are probably aware that I consider Izzy the most intelligent man I know. For newer readers unaware of his background, Izzy immigrated to this country some thirty-odd years ago, became a citizen and raised a family here. I’ve been blessed by his friendship for most of that time.

Link: http://news.silverseek.com/TedButler/1196788997.php

[Swissy]

Re. My Solution to the Housing and Mortgage Crisis

By Israel Friedman

I read the suggested idea and I agree the author has a 'different’ approach.

However, I see a couple of flaws in the argument (possibly also because I live in abroad and not the US).

1) He defines the “the heart of the problem is too much unsold inventory putting downward pressure on housing prices.”
I disagree. The problem as I see it is that prices of housing has risen too high. In that case the ‘downward pressure’ provides the answer, i.e. to get the prices down to normal.
There is one great moral justification in this: Housing is not investment. Housing is about providing a roof over your head and the providing for young families to be able start up and to buy a house for themselves. Housing is like any other product. Housing should be as low priced as good value permits. Thus maintaining inflated prices – regardless of how they were produced – is not the answer. I say, if need be let foolish home buyers, banks etc. go to the wall.

2) The idea of drawing in rich immigrants is hardly morally justifiable either (or maybe that isn’t a problem for Mr Friedman now that he has emigrated to the US?). The idea is to solve America’s housing financial problems Israel Friedman wants to let 1 million super-rich immigrants be allowed special entry arrangements. The idea is that each immigrant family brings $500,000 and invests $300,000 in a house, the $200,000 is for spenders. That means America would be skimming off $500 billion from other countries per year. In other words, damn the rest of the world, large parts of which are much less well off than the US is. Ok, a few immigrants might be from Switzerland and we can afford it well enough? LOL