A recent study suggested that nearly half of the cost of a home in the Seattle area is due to land-use regulations.
The study, by University of Washington Economics professor Theo Eicher, was highlighted in a recent article in the Seattle Times.
Professor Eicher’s research shows that the (more…)
For over 25 years, an increasing number of other countries have established some form of personally held accounts in response to their own social security and pension crises. Following their lead is a smart and sustainable way to reform our own Social Security system before it is too late. (more…)
In a world where taxes are used to finance government, possibilities for revenue include sales taxes, flat taxes and others. But among the many competing options, some are decidedly worse than others. The capital gains tax is one of the worst sources of revenue, since it taxes the very tool used ultimately to create higher wages for workers and increased standards of living. (more…)
The Social Security System worked well when there were sixteen workers to support each retiree, back in 1950. Now there are only three workers supporting each retiree, and soon there will only be two. The system is headed toward financial disaster. Congress must address these concerns, and Oregonians should lead the way toward reforming the system. (more…)
A recent article in Resurgence Magazine (December 2007) makes the claim that our free-market economy “lacks a moral compass” and is “value-free.” The author proposes a moral compass for the economy based on values pointing towards the environment and fulfilling human needs.
However, this sort of economy overlooks the (more…)
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Contact: James M. Taylor
Hundreds of the world’s leading “skeptics” of the theory of man-made global warming will meet in New York City March 2-4, 2008 to present their case and discuss the latest scientific, economic and political research on climate change. (more…)
Within the last week, two major news stories have demonstrated why politicians should not try to plan the economy. First, Science magazine published the results of several studies showing that the mad rush to promote ethanol and other biofules as a tool for “fighting global warming” is generating a substantial net increase in greenhouse gas emissions. The studies found that clearing rainforest or grasslands for conversion to croplands (necessary as the feedstock for ethanol production) releases large amounts of carbon.
The second news story, published in The Oregonian, focused on (more…)
In response to the recent problems in the home mortgage market, the Oregon legislature is considering several bills aimed at protecting consumers from unscrupulous or fraudulent business practices.
On Wednesday February 6th I testfied before the Senate Commerce and Labor Committee and the House Consumer Protection Committee regarding three bills, SB 1064, SB 1090 and HB 3630. Below is the written testimony I submitted to both committees. In each case, my testimony resulted in good questions from committee members and helped focus the debate on how to provide full disclosure to consumers, rather than shut down choices consumer have in the marketplace.
Testimony on Mortgage Loan and Foreclosure Consultant bills in the February Special Session of the Oregon Legislature
My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a Portland-based think tank that promotes individual liberty, personal responsibility and economic opportunity in Oregon.
Before you pass new laws attempting to protect home loan borrowers, I hope you’ll take a step back and think about how such laws can backfire.
The 2007 Oregon legislature capped interest rates on payday loans, effectively putting the lenders out of business. What happens now to the people who relied on those loans? While it’s too early to know for sure in Oregon, we do have some data about what happened in two other states that banned such loans in 2004 and 2005. The preliminary conclusions strengthen my concern that such laws can do more harm than good.
Let me read you the abstract of a report* by the Federal Reserve Bank of New York:
Payday loans are widely condemned as a “predatory debt trap.” We test that claim by researching how households in Georgia and North Carolina have fared since those states banned payday loans in May 2004 and December 2005. Compared with households in all other states, households in Georgia have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate. North Carolina households have fared about the same. This negative correlation—reduced payday credit supply, increased credit problems—contradicts the debt trap critique of payday lending, but is consistent with the hypothesis that payday credit is preferable to substitutes such as the bounced-check “protection” sold by credit unions and banks or loans from pawnshops.
It appears that banning these borrowing opportunities, even if they appeared to be bad opportunities to lawmakers, ended up hurting the very consumers the bans were meant to help.
I have little problem with bills that require full disclosure and reporting of loan and foreclosure activities. But I urge you to resist substituting your judgment for that of borrowers, lenders and consultants when it comes to the actual terms of such transactions. Chances are you’ll make things worse, not better, for those you’re trying to help.
* Payday Holiday: How Households Fare after Payday Credit Bans, Federal Reserve Bank of New York Staff Report no. 309, Donald P. Morgan and Michael R. Strain, November 2007
Audio of the both hearings are here:
Senate Commerce and Labor My testimony begins at 31:12.
House Consumer Protection My testimony begins at 1:38:55.
Last year two important developments took place in Oregon that favored low-income workers’ access to mobility, but they did not receive much media coverage.
First, automobiles were included in the transformative asset category of Individual Development Accounts (IDAs) to facilitate asset-building opportunities for low-income Oregonians.