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EScroogeJr (< 20)

more lies from Bernanke

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March 18, 2008 – Comments (3)

Now, Bernanke is trying to convince us that supporting parasites is vital to our well-being:  

"The priority we have is a stable, orderly financial markets," he said on CBS' "The Early Show. "This is very important to the health of our economy and it's very important to the American people because access to credit is key to businesses that need to invest to create jobs, it's key to families that need to borrow to finance a home or for college education."

The reality is just the opposite. It's not that we can't afford a home or college education becuase we don't have access to credit. The truth is the other way around: it is the availability of credit that makes these things unaffordable. On a market where regulations prevent businesses from selling at competetive prices, any access to credit means simply that you'll have to pay 10 years' worth of salary for the same product that would cost 1 year's worth of salary otherewise. If you make credit twice as accessible, you will have to shell out 20 years's worth of salary, if you make it four times more accessible, the price will just go up to 40 years' worth of salary, on so on. So access to credit is only key to people who are in the business of price-fixing.    

 

3 Comments – Post Your Own

#1) On March 18, 2008 at 9:24 AM, dwot (40.93) wrote:

I agree that the lack lending and easy credit has made things very unaffordable.

So much more of the new government protection... 

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#2) On March 18, 2008 at 11:24 AM, umight (48.54) wrote:

The market forces that lead to price competition counter this argument.

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#3) On March 18, 2008 at 11:57 AM, EScroogeJr (< 20) wrote:

Price competition, hah? We've had prices of housing double in a few years, and builders now refuse to build at today's prices because, you see, they're not high enough. Price competition exists between restaurants, grocery stores and gas stations, but when it comes to housing, health care, and education, competition is a fiction.

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