Third World Governance and the Mortgage Market
How will the Chrysler and GM deals raise mortgage rates even further than what we saw last week? Simple. The Obama administration seems unconcerned over damage to the credit markets in his quest to reward the United Auto Workers by trampling laws and legal precedent regarding corporate debt.
That is causing a loss of confidence. That is going to make mortgage rates go up!
From James Glassman at the New York Times:
What’s my interest in this? I head a nonprofit group that encourages developing nations to adopt policies that will lead to prosperity — starting with transparency and the rule of law — and hold up America as a model. Yet in its high-handed dealings with Chrysler and G.M., the Obama administration reminds me of an irresponsible third-world regime, skirting the law and handing economic prizes to political cronies. – New York Times
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