Did Gov't Push for Homeownership Cause the Crisis? - Peter Wallison

[blarsen1]

The lender controls the loan process, not the lendee. The republicans love to blame the people who got the loans and not the people who made the loans. This was the government in cahoots with the banks.

[dac8555]

what bullshit.  The government just backed private businesses. The govt didnt go out and sell to those poeple, they just said that banks could discriminate against certain types of loans. This guys is a partisan hack. Is the govt partially to blame for being to lax? of course. Are they 100% to blame? no fucking way.

[777CARL777]

American Enterprise Institute has no credibility, they are propagandist!!!

[UnderseaCaveman]

Gordon Gecko was right.... "Greed is good"

[freesk8]

This video is absolutely correct.

One of the biggest causes for the current financial meltdown is the government action mentioned by the speaker.

And now the government is making things worse by printing way too much money (this will cause bad inflation which will hurt the poor more than the rich) and excessive debt (which will burden future generations and hamstring govt with high debt payments) and wasteful spending, most of which goes to special interest groups and political insiders.

[Rickdeckard2020]

Some people have no shame. The subprime is a RED HERRING. The OCC prevented States from stoping the loansharking. Criminal banks created a quadrillion in derivatives because it was NOT regulated. The trillions in bailout to the bank cartel are not going to families with mortgages nor to the economy, while you focus on the pasty scapegoat, ChaseGoldmanCity cartel are giving themselves bonus filling and hoarding their aquisition war chest and transfering funds offshore leaving you holding the bill

[RonnieInOC]

It's too simplistic of an explanation. He doesn't talk about the lack of incentive on the part of lenders to make responsible loans. They pooled the bad loans into derivatives and sold them off, not caring whether the mortgages would default, since they were off their books anyway. Well maybe he talks about it in the full speech but he doesn't seem like an honest guy anyway so I won't listen to the entire speech.

[zipszink]

Blaming government is overly simplistic, it is analogous to blaming the puppet instead of the puppet master. If you cannot detect the "unseen hand" of greed in this, you must be delusional. If you want to figure out who is most culpable, look for who has benefited most.

[joewilder]

I don't agree with this.  Just because banks and lending institutions knew they could unload bad loans because of bad government policy, doesn't excuse them from making the dishonest loans in the first place.

[whoo689]

If I were in charge, there would be NO subprime loans. None of that bullshit. We have a credit ratings system for a reason. When you screw with that, you play with fire. That's why I get so furious when I see these ridiculous commercials for companies that give out cars or other expensive stuff to people with bad credit. They say "no problem!" Yeah right

[whoo689]

There are much better ways to increase homeownership than giving out free public housing that's not well-maintained or forcing banks to give out bad loans. For example, the state or local gov'ts could easily fix education for the poorest among us if they'd just get their heads out of their asses and start pursuing policies that actually work like school choice. That would certainly help expand opportunity for college, which would help make a lot more people self-sufficient and middle-class.

[whoo689]

OR they could actually realize that it's their fault that houses cost so damn much. Silly regulations like inclusionary zoning significantly raise the prices. They're unnecessary and ridiculous. Just let homeowners build and stop stifling them with such nonsense. Countless studies confirm that bad regulations are what cause housing to cost a lot more than it should. Of course, if you're at the poverty level, there's almost no house that you can afford anyway...

[whoo689]

Big businesses constantly lobby to get special favors and shit. And their GOP friends after the "Republican Revolution" of 1994 were more than happy to give it to them.

[whoo689]

If anything, the government HELPED the market screw itself up. It wasn't "free-market economics" that screwed up. Hell, we really haven't had a "free-market" for decades! What we have is corporatism, or as some would call it, fascism. Government officials, usually Republicans, give all these subsidies, corporate welfare and special gifts to their friends on Wall Street. They craft regulations to help certain big businesses get an advantage, esp. over small business.

[whoo689]

The market would've kept it in check easily. The bubble was obviously created by absurd gov't moves. I say we just abolish Fannie and Freddie already. Wtf was Bush doing socializing them?? Fucking moron. Don't forget that it was Obama and ACORN in the past several years who had a hand in forcing banks to make all these bad loans.

I'm just sayin.

[whoo689]

Yes, there was a complex array of factors, but it wasn't "deregulation" on some massive scale. I mean, George Bush was hardly a small gov't free-market guy. He was a corporatist stooge. He pushed this extreme homeownership bullshit just like Clinton, even though we already had over 60% homeownership. 

How many laws would the liberals say are "deregulation that caused the crisis"? I can only think of one major law and that was Glass-Steagal. Other than that...

[whoo689]

Maybe 'greed' did have a hand, but it's not like the amount of greed in a society suddenly goes up 200% or 1000% in a decade. The market always has kept greed in check on a large scale, even if there were some scandals here and there such as Enron and Worldcom. Of course, those were false accounting situations and not necessarily greed-related. It's absurd for anyone to believe that 'greed' caused the crisis, that a bunch of greedy bankers and wall st. execs went too far and caused a meltdown

[ushadrons]

Complex problems are all too often explained by over simplistic catch all answers that miss 95% of the truth. That is what is at play here. For one, it was not government policy that created the complex financial notes that turned out to be worthless. This problem involved an array of factors that contributed to the collapse.

[VivekRajcoomar]

the public isnt smart/ never was, but if they went out for blood, and (bankers) heads start to roll, watch how quickly this "crisis" would be solved.

when ppl say "it's all very complicated", i can assure u that it isnt. what is really happening is ppl r LYING to cover their own asses, and this makes things seem oh so complex. it's a simple problem covered in bullshit.

remember how "enhanced interrogation" was oh so different to torture?

[ushadrons]

Bankers, mortgage writers, real estate agents, stock brokers, hedge fund operators, investors, insurance companies, speculators, lobbyist, dead beat homeowners, regulators,Treasury Officials, politicians, and the apathetic public. You would still be leaving out any number of individuals that are partially to blame. They all lie and cover their asses, which does create a false complexity, but it is not as simple as bankers heads. Torture is always torture, "enhanced interrogation" is bullshit.

[Hopeful71]

Trying to blame the credit crisis on on CRA is borderline insanity and a plea to the ignorant. It would be like blaming your speeding ticket on the existence of NASCAR.

[Chrisnoscrub047]

Are you serious? When something is subsidized you get more of it than you would have otherwise. Home ownership was the something being subsidized through the CRA and lo and behold there was more of it than there otherwise would have been. More demand for housing = higher housing prices.This is literally what created the bubble.

blaming the credit crisis on CRA is like blaming a speeding ticket on a govt policy that made racing on the highway 40x as profitable as it would've otherwise been.

[Hopeful71]

CRA accounts for low-income & minority lending. NOT the subprime lending made possible by regulation dodges, credit default swaps, & CDO. This is what drove the housing frenzy; not a few low income mortgages that until 2002 were just as secure as prime loans.

Equating the subprime & CDS frenzy to the CRA is unarguable. There is zero correlation but it does 'sound good' to blame it on poor people.

[hegemonymony]

Then perhaps you should watch it again. He's not blaming it on poor people. He's blaming it on government intervention.

Good intentions. unintended consequences.

[Slug99]

People should stop just blaming ONE source for all the problems. If the government was forcing the banks to do these things, how come they didn't even protest? Because they thought this was a good deal, it worked perfectly for several years and only a few people saw it coming.

[eirefrance]

You'll notice where Mr. Wallison is a Senior Fellow at. Pointing to the govt as the ONE source for the problem is what the keep-the-rich-rich-and-the-poo­r-poor AEI is all about. If we start considering the complexity of the crisis, we miss the opportunity to further defend and push a damaging, failing ideology.

[whoo689]

I'm sure they did protest, but they were SUED and extremely pressured by the gov't. I don't think you realize just how powerful the charge of 'discrimination' can be against a co., esp. from government. Didn't you see the clip on C-SPAN of that jackass Andrew Cuomo, former HUD Secretary, talking about how they were essentially forcing banks to give all these shitty loans so they didn't "discriminate" against minorities?

[ushadrons]

I'm a white male in my mid forties and I was offered loans by friends at work.

It didn't matter if you could pay, they were only interested in selling the bundles. They didn't care about the color of your skin, just your numbers, and the opportunity to make money. It all comes down to money, and the want for things beyond ones financial reach. If you find the individuals that profited the most, and those that lost the most in these events; then you will have found many of those responsible.

[kshackleton]

Only a few saw it coming? Anyone with an ounce of sense knew that these policies would ultimately lead to disaster. What was not known was the timing and the extent.

When banks are allowed to lend 100% [or more] of the market value of a home to people who cannot afford the monthly payments....disaster is sure to follow.

It worked for several years simply because it took that long for enough people to default for it to become a problem for the lenders. It was a matter of time.