Sunday, March 22, 2009

Who could have predicted the current economic crisis?

"Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to 'buy' houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment."

—Henry Hazlitt, in his wonderful book Economics In One Lesson, 1946.

Yes, this was all well understood and predicted in 1946! Another example of the importance of learning from history ...

Mallet Articulated Locomotives

From: "Lloyd Smith"

My father lived in Essex, MT from about 1917 to 1927. His father worked for the Great Northern Railroad. Dad talked about the large engines, the Malleys that would come into town to push the trains over the Continental Divide. Am I spelling it correctly? I cannot find anything on the Web. I would like to get a photo of a Malley if they exist.

—Lloyd Smith

Where Are You?

From: "John Lenkey"

Is the CPRR Museum only virtual? Have you an address we can visit?

—John Lenkey in N.C.