Quote:
Originally Posted by strandinthewind
As i have said since like 2001, W and his administration clearly knew that the housing market was grossly inflating because Greenspan repeatedly and publicly warned of this up to his retirement. But, W could do nothing about it because the housing boom was the only thing propping up the fragile economy, which was made worse by W's insane borrowing to spend in Iraq. In other words, without allowing the creative financing that propelled the housing boom, the economy under W would have been far worse (note -- it was not that bad under W and even good in some spots - it was the spending that caused the problems) -- So, in a very real way, the housing boom is W's fault because with a little tighter application of the existing regulations, it could have been possibly prevented or at least its effects lessened.
What I do not understand is the vast najority of mortgages out there are being paid. So, why have their been somwhere over 20 billion dollars in write downs?
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I basically agree with you. The gov't did fail here in not reigning in a lot of this crap. As much as Bush didn't do, the housing boom started long before him, as did the tech boom. Neither he or Clinton did anything to prevent it. That is not to say that either are totally at fault. The banks themselves, as are the customers and a series of do nothing congresses are to blame, as well as the people who wanted more house than they could afford. I do think we should surgically bail certain things out, such as the personal investments being held by the banks like retirement accounts, but as far as the bank itself goes, let it crash. $20 billion is easy to reach when housing prices are artificially inflated. If the banks crash, housing prices go back to affordable levels, hence more people will then buy.