George Gilder told Dennis Prager yesterday: “We have capital flight from the United States and human capital flight…moving to more attractive investment environments. This is the wrong time to go over the fiscal cliff in January, rescinding President Bush’s good policies, such as his low taxes on capital gains and dividends.”
Dennis: “Why do we have the recession?”
George: “Because we allowed our government to dictate to the real estate industry to the extent that the entire industry reoriented itself to support subprime mortgages and render those subprime mortgages salable by concocting a whole set of derivatives securities that could be sold all around the world. This was enabled by Fannie and Freddie and dictated by Congress and housing administrations. We compounded the mistake by bailing out all the institutions that perpetuated it. We nationalized Fannie and Freddie. We expanded the FHA. All in the name of creating more housing ownership when Canada, which does not even have deductions for mortgage interest, has higher levels of home ownership, without any of these Fannie and Freddie. It’s a terrible failure of government that can’t be repaired by more government.”
