The N&O reports here that Bloomsbury Estates condos are
offering a ?free? Mini Cooper car when you buy a condo.  Obviously you are paying for the car in
the price of the condo that range from $229,000 to $1.12 million.

 

The article also inadvertently reveals that how the past
housing bubble was created and how the federal government is working overtime
to create a new bubble. 

 

Let?s start at the beginning.  Raleigh?s condo developers began their projects during the
housing boom when they envisioned high prices and huge profits.  Now after the housing bubble burst,
Bloomsbury Estates at Boylan Avenue and the Hue on Dawson cannot attract the
buyers and they need a government ?bailout.? 

 

In a real economy, they could just lower prices and,
perhaps, take a loss.  After all
they took a risk in order to make a profit.  The free market is a profit and loss system. But in the new taxpayer supported economy
that socializes risk and privatizes profit there is no reason to take a loss.

 

Instead offer a ?free? $22,000 car paid for on a 30-year
mortgage for 4 percent interest. This is possible because Federal Reserve
Board?s interest rate charged to banks is currently about one-half
percent. Furthermore, offer your condo buyers a bank loan that will be shuffled
off to federally owned Fanny Mae or Freddie Mac. They relieve the bank of the
risk by transferring the risk to the federal taxpayers. 

 

The bank takes on no risk for the loan and the real estate
developer does not have to lower his prices.  It?s a “win-win” for everyone, except for the federal taxpayer
who takes it in the neck. 

 

Makes one long for a simple banking system as explained by
Jimmy Stewart here.

I wonder why the N&O reporter missed this important part of the story when the Onion got the story right back in July 2008 here.

WASHINGTON?A panel of top business leaders testified before Congress
about the worsening recession Monday, demanding the government provide
Americans with a new irresponsible and largely illusory economic bubble
in which to invest.

“What America needs right now is not more talk and long-term
strategy, but a concrete way to create more imaginary wealth in the
very immediate future,” said Thomas Jenkins, CFO of the Boston-area
Jenkins Financial Group, a bubble-based investment firm. “We are in a
crisis, and that crisis demands an unviable short-term solution.”