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