{"id":12476,"date":"2011-12-08T09:44:59","date_gmt":"2011-12-08T13:44:59","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=12476"},"modified":"2012-07-11T09:26:00","modified_gmt":"2012-07-11T14:26:00","slug":"the-law-of-misguided-subsidies","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2011\/12\/08\/the-law-of-misguided-subsidies\/","title":{"rendered":"The Law of Misguided Subsidies"},"content":{"rendered":"<p><a href=\"http:\/\/online.wsj.com\/article\/SB10001424052970204903804577082631863392956.html?mod=opinion_newsreel\" target=\"_blank\">T.J. Rogers<\/a> explains the latest corollary to the well-known Law of Unintended Consequences (for examples of that law in operation, see your local, regional, or national government):<\/p>\n<blockquote>\n<p>Wall Street understands how to make money, up-market or down. &#8220;Margin Call&#8221; may fuel Occupy movement ire, but in creating mortgage-backed securities, Wall Street did nothing other than facilitate home-financing access to the next tier of less-qualified home buyers, as demanded by every president since Bill Clinton. After that, the bankers did exactly what their shareholders wanted: bundle those risky loans into securities, sell them to lock in the profits, and dump the risk right back onto the federal government &mdash; where it belonged.<\/p>\n<p>My purpose is not to debate the morality of mortgage-backed securities but to update the Law of Unintended Consequences with the corollary Law of Misguided Subsidies: Whenever Washington disrupts a market by dumping subsidies into it, Wall Street will find a way to pocket a majority of the money while the intended subsidy beneficiaries are harmed by the resulting market turmoil.<\/p>\n<\/blockquote>\n<p>Rogers also explains why so many &#8220;special Limited Liability Corporations (LLCs)&#8221; are getting into the solar power business &mdash; not the manufacturing side, but the retail side. The profit margins are <em>obscene<\/em>. If the government hadn&#8217;t set up the market to work this way with their subsidies, the profit margins would be much lower.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>T.J. Rogers explains the latest corollary to the well-known Law of Unintended Consequences (for examples of that law in operation, see your local, regional, or national government): Wall Street understands how to make money, up-market or down. &#8220;Margin Call&#8221; may fuel Occupy movement ire, but in creating mortgage-backed securities, Wall Street did nothing other than [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,84,28,53],"tags":[436,727,426,122,82,835],"class_list":["post-12476","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","category-media","category-politics","tag-banking","tag-cronycapitalism","tag-housing","tag-movies","tag-murphy","tag-occupymovement"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-3fe","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/12476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=12476"}],"version-history":[{"count":3,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/12476\/revisions"}],"predecessor-version":[{"id":15962,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/12476\/revisions\/15962"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=12476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=12476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=12476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}