Don Boudreaux here responds to a WSJ letter writer who claimed that without federal intervention in the mortgage industry, poorer people wouldn’t be able to buy houses. It’s an indication that America is overly politicized that so many people beg for government favors, claiming that there will be some social calamity without them.
Editor, The Wall Street Journal 1211 6th Ave. New York, NY 10036 Dear Editor: Peter Donovan asserts that failure of government to subsidize loans to build lower-end rental units would result in poor Americans being homeless (Letters, May 3). Nonsense. Unsubsidized markets do not cater exclusively to the middle-income and rich. Quite the contrary. Automakers produce not only luxury vehicles such as Lexuses but larger numbers of low-end makes such as Chevys (not to mention the existence of a thriving market in used cars). We see not only high-end retailers selling the likes of hand-crafted Stickley furniture but also, and more abundantly, Wal-Mart and other discount retailers selling inexpensive household furnishings. America boasts not only pricey restaurants such as the Inn at Little Washington but, far more commonly, inexpensive eateries such as Olive Garden, Denny's, and (dare I mention it?) McDonald's. This same pattern holds for clothing, hotels, groceries, entertainment, works of art, and nearly every other species of goods and services in our economy. It's unreasonable to suppose that without government-subsidized loans to developers, housing would be built only for middle-income and rich Americans. Sincerely, Donald J. Boudreaux Professor of Economics George Mason University