More Mark Zandi Brilliance, Gordon Brown Surprisingly Tells teh Truth, and Switzerland Funds Prostiution Stalls

I mentioned another idiotic proposal by the ever incompetent Mark Zandi of Moody's a few days ago.  The new brilliant proposal by Zandi involved Obama's home refinancing program HARP (sounds devilishly close to TARP) which pushes Fannie and Freddie to "forgo borrower income verification and detailed home appraisals to keep costs down" as well as offer new refinancing options to borrowers including not charging add-on rates to those with low credit scores or who have lost a ton of equity in their homes.  Do you smell that?  Yup, the proposal stinks to high heaven with the stench of being another bailout.  Just think of all the votes Obama can buy with this proposal!

So let's get this straight:  the government, including the Bush and Clinton administrations, promotes home ownership by lowering lending standards for the GSEs in charge, this comes back to bite the gov't in the ass as the people that took out mortgages to begin with really couldn't afford them, the Federal Reserve played its part with Greenspan lowering interest rates to create a housing bubble in order to cover for the stock bubble popped he had created, and now taxpayers are on the line for possibly trillions when all is said in done.  We are living in paradise baby!

But Zandi's plan is bad for just those reasons, as Mish points out:

Common sense dictates (and history proves), losses accelerate as you loosen standards. Forgo income verification and ignore credit scores as Zandi proposes and losses would soar.

It is ludicrous to propose loan modifications to those with no job or no income, and those significantly upside down on their mortgage. The former cannot afford any payment and history proves the latter will walk away anyway.

Loose standards created this problem, it's no surprise Zandi thinks they are a solution.  Just look at the company he works for that rated a bunch of toxic subprime mortgage paper as fine.

Even after all of this (sorry for the rant, I am honing my chops for an article I am writing on Zandi), I dug up this nugget of his today:

Just last month, for example, the chief economist for Moody’s Analytics Mark Zandi released an analysis of stimulus measures work. Zandi advised John McCain in 2008 and is anything but a committed liberal. But his study, supported by the full weight of Moody’s modeling expertise, clearly shows that spending is the best form of stimulus.

Yeah yeah, more stimulus, more big government sympathizing, your a true non-liberal Zandi, keep telling yourself that.  Here is the clincher:

The single most effective form of stimulus, the study found, are increased outlays for food stamps — which create $1.71 in economic activity for each dollar in federal spending.

Jesus Christ on a bicycle! (sorry, always wanted to say that) I think I figured out how to fix the economy!  Just lower the standards for food stamp approval and dedicate more public funds to the program! After all, Zandi has already proven he is in favor of lowering standards, just imagine the prosperity that will reign down from the fairy tale multiplier of 1.71!  Oh but wait, I am not stopping there.  With newly acquired food stamps, the recipients should be forced to purchase only organic foods!  What's that Barry? I thought you wanted to make Michelle happy?

Okay, enough fun with Zandi, let's pick on another joke in the public policy field.  I am referring to former UK Prime Minister Gordon Brown who had the pleasure of leaving his country in fiscal shambles.  But wait, it looks like Brown isn't completely blind to the troubles the Eurozone is facing, from a recent speech:

"In 2008, governments could intervene to sort out the problems of banks. In 2011, banks have problems, but so too do governments."

"We’ve now got the interplay between banks that are not properly capitalized and sovereign debt problems that have arisen partly because we’ve socialized or accepted responsibility for the banks’ liabilities."

Well no shit Sherlock.  Brown might realize the obvious but probably doesn't put together that bailing out the banks the first time may have given them the incentive to not change practices since the ECB and respective governments came to the rescue before.  A 6th grader could probably make the connection which probably explains why a former Prime Minister can't.

Europe may be screwed, but at least in one place they are investing in the world's oldest profession:

Zurich city parliament on Wednesday rubber-stamped a loan earmarked for the construction of drive-in sex stalls where punters can meet prostitutes at purpose-built venues away from the city centre.

Representatives voted 74 to 30 in favour of the new development in Alstetten to the west of the city, Tages-Anzeiger newspaper reported.
Ten garage-like booths will be erected on derelict land in an industrial area in Alstetten, complete with parking spaces and alarm buttons. The so-called "performance stalls" will be the first of their kind in Switzerland if the project goes ahead.

Government financed prostitution? I am sure this counts as some type of stimulus project.

Update- RIP Carl Oglesby, here is description via Eric Garris at Antiwar.com:

Oglesby was a leader and one-time president of Students for a Democratic Society (SDS). SDS was the leading antiwar students group in the 1960s until factional politics caused the implosion of the group in 1969. Another SDS leader once described the makeup of SDS: “We have within our ranks Communists of both varieties, socialists of all sorts, 3 or 4 different kinds of anarchists, anarchosyndicalists, syndicalists, social democrats, humanist liberals, a growing number of ex-YAF libertarian laissez-faire capitalists, and, of course, the articulate vanguard of the psychedelic liberation front.”
Oglesby was a proponent of working with libertarians and conservative antiwar activists in such groups as Young Americans for Freedom on war and other issues. He argued that “the Old Right and the New Left are morally and politically coordinate.”