Housing Slump

Once again the Emperor read in the news today how government involvement in the free market has backfired. The housing market which had been badly damaged by the creation of sub prime loans fiasco through the Community Reinvestment Act has been improving the past nine months due to government subsidies for home buyers. Now, however, the tax credit is expiring and housing sales slumped more than expected in November and indications are that December's numbers will be even worse. Industry experts speculate that the improvement in the housing market is a "house of cards" ready to fall the instant the tax credits disappear. Conversely, the market for steel, computers, and chemicals is rebounding nicely and will probably lead us out of the recession. Of course, those industries were not subsidized. The Emperor wonders when the government will learn this simple lesson: stay out of the free market.