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The House that Herbert Built

Two weeks ago, I was praising Lt. Governor Gary Herbert for his willingness to stand up against the Western Governor Association.  Yet, today we find him cow tailing to his friends in the Utah Association of Realtors.

On Tuesday, Herbert announced plans to extend another stimulus package for home buyers.  While the details are still vague and we don’t know what the package will include, whatever the package is, it is not the right thing to do.

At best, this looks like Herbert is scratching the backs of his friends.  At worst, this is corruption at its worst.  Herbert is a past president of the Utah Association of Realtors, so this really starts to smell.

The legislator recently passed a similar bill which was signed by Governor Huntsman.  We have yet to see the results of this stimulus, yet our government is already talking about passing more.  The only reason I can see for seeking more money for home buyers is the make Realtors happy.  My guess is we will see a huge donation by that organization to Herbert’s 2010 campaign.

Is the word stimulus the government word of the day. All politician like to exclaim how they are going to stimulate the economy.  Even though it may go against the principles of their party, they think they can save the economy. In my very limited understanding this is a Keynesian approach to economic recovery.

I won’t be so self-important as to act like I understand Keyensian Economics.  But my understanding is that one of the principle of this theory is that government infusion of money into a market will help the market. However, as Frank Staheli points out in this excellent piece on Keynesian Economics, most of Keynes’ theories have proven false.  Government involvement in the free market leads to failure.

I have been tentative about showing support for Herbert.  And I am glad that I did.  After his forthrightness at the Western Governors Association meeting, I was thinking that I might become a supporter.  However, this one proposal may have pushed me back on to the fence, and maybe on to the other side.  I am not going to fight against him just yet, but I will be watching Herbert closely to see exactly what he does.

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3 comments to The House that Herbert Built

  • Thanks for reporting this. We have a lot of realtors in the legislature. That is part of the reason that people like you and me are blocked from getting accurate information about the prices at which homes in any area have been sold. The realty folks say this is a privacy issue, but it serves to make it difficult for the ordinary home seller or home buyer to judge what the going market rate is without using a professional realtor that has access to this information. Lack of pricing information and control of pricing information makes for inefficient markets and improperly empowers the politically favored over the rest of us.

  • I am surprised and disappointed in Herbert. It’s interesting how easy it is for just about anybody to justify helping someone out at the expense of everyone else, especially when it helps one’s friends. But just because it’s easy doesn’t make it right. I hold out hope for Herbert’s repentance and an apology.

    Henry Hazlitt wrote one of the seminal books on economics entitled “Economics in One Lesson”, whose one lesson is this:

    The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

    If Gary Herbert really took the time to look at the longer effects of his policy, I’d expect he’d change his mind.

  • I’ve seen the Home Run Grant at work in my neighborhood. There have been several new homes built nearby using the grant. Which certainly helped the home builders and contractors and city tax revenues. However, there are a significant number of existing homes sitting vacant and unsold. Their just is no way they can compete when the builder across the street has a $14k price advantage courtesy of the government.

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