CEI Daily Update

Issues in the News

 

1. CONSUMER

Economist Stan Lebowitz suggests that bank anti-discrimination rules set off the current rise in mortgage defaults.

CEI Expert Available to Comment: Special Projects Counsel Hans Bader on the role political correctness is playing in the subprime mortgage crisis:

 

“A lot of subprime mortgage loans are defaulting.  A big reason why is that, to avoid discrimination charges, lenders gutted their traditional lending standards in order to loan money to people with bad credit (bad credit is more common in some minority communities, so refusing to lend money to people with bad credit is alleged to have a racially ‘disparate impact’).  The Community Reinvestment Act, which punishes banks that don’t make loans in high-risk areas, is also a key reason why (it was enacted and then made even more onerous by the very politicians who are now shrieking about the mortgage crisis they helped create).”

 

 

2. BUSINESS

Taxi cab drivers in Washington, D.C. go on strike to protest new rules implementing a metered fare system.

CEI Expert Available to Comment: Senior Fellow Eli Lehrer on the virtues of D.C.’s traditional system of taxi regulation:

 

“D.C., unique among major American cities, let almost anyone operate a cab: Regulations existed but they were very permissive. So long as you weren’t an insanely bad driver, could speak English, and had $300 a year, and a non-compact car in good running order, you could drive a D.C. cab. The minimum cost of entry–which is over $150,000–in New York is maybe $2,500 to $3,000 in D.C. The lack of meters, which made it possible for cab drivers to work out a variety of business models (and, frankly, overcharge tourists), also helped increase competition. D.C. is the easiest large city to get a cab during rush hour and the only large city where the great majority of drivers’ own their own cabs.”

 

 

3. TECHNOLOGY

Microsoft’s proposed buyout of Yahoo raises antitrust concerns.

CEI Expert Available to Comment: Technology Policy Analyst Cord Blomquist on the misguided efforts of antitrust regulators:

 

“In the past antitrust regulators have succeeded in breaking up firms with the ironic affect of allowing other firms to come to more dominant positions as the market continued to develop and change. Hopefully antitrust regulators will realize that their narrowly defined and static conception of markets are arbitrary to begin with and no supposed monopoly can possibly last that long in a free and open market.”

 

 

Blog feature: For more news and analysis, updated throughout the day, visit CEI’s blog, Open Market.

 

FOR MORE INFORMATION

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