Misguided Censorship And Banking Policy

It is not where you are, but where you are going.  Analogies abound, which brings us to a couple of recent topics in the news: Censorship and Banking Policy.

This week, several state attorneys general* threatened, Big Brother-esque, the management of craigslist.org to remove the adult services section of its electronic classifieds, as highlighted at TechCrunch and elsewhere.  Craigslist initially resisted but eventually acquiesced by inserting “censored” on the section of concern – but only on its U.S. pages.  Feel free to visit similar exotic services sections of other Non-U.S. cities such as Beijing for uncensored versions. 

End result, the tactics by civil servants to target one business and ignore many other popular online and print classified ads that arguably attract greater amounts of morally questionable activities should be a warning sign to citizens and businesses.  That is all we will write about this topic, for obvious reasons.

Another headline demonstrates how a government and banking community should responsibly manage their activities.  Yesterday Beijing announced that it tightened residential lending standards by increasing the percent of equity required to obtain a loan from 20% to 40%.  What a novel approach.  In the U.S., lending standards went in the opposite direction, from 20% equity to zero equity.  Did government entities and banks in the U.S. heed lessons from the banking collapse?  Well, based on the recent sponsorship by Federal Housing Administration (FHA) of 3.5% equity loans for luxury condominiums in NYC, the answer is a resounding “no.” 

This presents yet another warning sign that policy makers and government entities are behaving in a harmful, irresponsible manner – a “privatize the gains, socialize the losses” mentality.
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* State attorneys general espousing censorship: Arkansas, Connecticut, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Missouri, Montana, New Hampshire, Ohio, Rhode Island, South Carolina, Tennessee, Texas, and Virginia.