History of the housing crisis?

[Tod]

I'm discussing the housing crisis with a person who commonly refers to Republicans as "Republihaters". Does anyone have a clear understanding of who decided what that lead to the housing crisis? I'm not trying to defend Bush, but I'd like to (accurately) point out that establishment shills from BOTH parties had a hand in it.

links would be helpful....

Thanks!

[Travlyr]

The housing crisis was created by the people in charge as an economic boom... aka bubble. That's what central planners do.

In the 80s a Savings & Loan crisis occurred which sent some people to prison while others escaped scrutiny and profited handsomely. The crisis was bailed out and the money created needed to go somewhere, so it went into the newly found Internet Dot Com bubble.

The Dot-com bubble lasted until people figured out that it was mostly a gambling scheme except for a few very profitable companies. When the Dot Com bubble burst, then the money had to go somewhere so the housing boom was a likely and promising industry. Jobs were plentiful and money was easy.

The Housing bubble was encouraged as a way to promote the American dream for all. (Plus, it was a nice distraction for the "conflict" in Iraq). So lenders were encouraged to lend to people who really couldn't afford the houses, but since the house was increasing in price every month, then everybody was making money. As a homeowner's equity increased, then they could borrow against their equity with HELOC loans and use their home as an ATM to buy cars, tvs, computers, etc. Lenders eventually were giving mortgages to people as No Downpayment, No Documention, with Teaser Rate interest ... NoDoc, NoDown, Low initial interest rate. The government essentially guaranteed the lenders would not lose. So when the Housing bubble burst, then the bank bailouts began both as TARP and $16 trillion that went unreported to the American people. Now, the money has to go somewhere... so where is the bubble now? The bond market seems safe even if interest rates are low.


Competing Currencies FTW!

[Tod]

Here is how the exchange is going...

I posted a link to an article:

Fannie Mae ignored foreclosure abuses
Fannie Mae lets warnings on foreclosure processing abuses go unheeded.

He replied:

You realize this happened under a Republican President? This would be the party you are trying to promote? We can agree on one thing, Bush screwed this country with the mortgage abuses he allowed to happen - er, PROMOTED!

And I answered:

Trying to make this a partisan issue? I'm not promoting the Republican Party. The Establishment Republicans AND Democrats are merely two sides of the same coin that is headed down one drain. Don't be fooled into thinking either one is working in the interest of the nation; they are both essentially controlled by corporate interests.

and then added:

As an example, even though Bush was the President, Jim Johnson (D) was one of the leaders at Fannie, as was Franklin Raines (D). So your theory that party has anything to do with integrity is, well, suspect. Establishment politicians of both parties have maintained the corrupt corporatism that is the biggest problem in Washington. I encourage you to throw off the blinders of partisanship and try voting for a leader with integrity. If you can find a candidate with more integrity than Ron Paul, please, don't keep him/her to yourself!

[Travlyr]

Yeah, it is pretty obvious that Republicans (Neil Bush, et. al.) and Democrats (Bill Clinton, et. al.) both profited from the Savings & Loan scandal. Then Democrat President Bill Clinton presided over the Dot-com bubble while Republican President George Bush presided over the Housing bubble.

So, if he doesn't understand that Rep & Dem are opposite sides of the same coin, then there may not be much hope for him.

[sevin]

Mises.org used to have a specific list of reading material to explain the housing crisis. Does anybody remember that or know where that list is?

[SilentBull]

This video might help: