Today’s New York Times carries a story about the U.S. government financing home construction for Palestinians: “New Home-Buying Plan May Bolster Abbas”. You would think that we have demonstrated conclusively, by our own sagging economy, the dangers of investing almost exclusively in housing as opposed to factories and industry. Now the Palestinians, who have the world’s highest birthrate and a level of education and productivity that is not competitive with Asia, are going to have an even larger imbalance between housing and jobs.
The article does not address the question of why this is being funded by U.S. taxpayers. Wealthy Arab nations are buying up assets all over the U.S. because they can’t figure out what to do with the hundreds of billions of dollars that we’ve been sending them. These same folks often express solidarity with the Palestinians. If folks in the Emirates can afford to buy investment banks in the U.S., airports and container shipping ports throughout the world, and personal Boeing 747s (some of which cost about as much as this program), how come they won’t give their Palestinian brothers a mortgage?
Maybe because Islamic law prohibits lending money at interest. There’re tricky ways around it, but it complicates financial arrangements significantly.
because Islamic law prohibits lending money at interest.
They could lend at 0%. General Motors and Citibank do it to total strangers.