Saturday, September 10, 2011
"Burning down the house"
The belief that creating home ownership for everyone is a panacea was, and still is, absolutely FALSE.
I have the thought that society is much like nature.
Human efforts to completely control or manage it are doomed.
We just do NOT have the power to have some things go the way we wish...
I have the thought that society is much like nature.
Human efforts to completely control or manage it are doomed.
We just do NOT have the power to have some things go the way we wish...
In a New York Post opinion column, George Will recently used the publication of a book to remind us about it:
"Most explanations of the financial calamity have been indecipherable to people not fluent in the language of 'credit default swaps' and 'collateralized debt obligations.' The calamity has lacked human faces. No more.
Put on asbestos mittens and pick up 'Reckless Endangerment,' the scalding new book by Gretchen Morgenson, a New York Times columnist, and Joshua Rosner, a housing finance expert. They will introduce you to James A. Johnson, an emblem of the administrative state that liberals admire.
The book’s subtitle could be: 'Cry ‘Compassion’ and Let Slip the Dogs of Cupidity.' Or: 'How James Johnson and Others (Mostly Democrats) Made the Great Recession.' The book is another cautionary tale about government’s terrifying self-confidence. It is, the authors say, 'a story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.'
The 1977 Community Reinvestment Act pressured banks to relax lending standards to dispense mortgages more broadly across communities. In 1992, the Federal Reserve Bank of Boston purported to identify racial discrimination in the application of traditional lending standards to those, Morgenson and Rosner write, 'whose incomes, assets, or abilities to pay fell far below the traditional homeowner spectrum.'
In 1994, Bill Clinton proposed increasing homeownership through a 'partnership' between government and the private sector, principally orchestrated by Fannie Mae, a 'government-sponsored enterprise' (GSE). It became a perfect specimen of what such 'partnerships' (e.g., General Motors) usually involve: Profits are private, losses are socialized."
