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Agreed. It seems too simplistic to chalk thus up to just the energy sector alone. A good quote from the Krugman piece: Why didn’t the same thing happen in Tex

Agreed. It seems too simplistic to chalk thus up to just the energy sector alone. A good quote from the Krugman piece: Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation. In particular, Texas law made it difficult for homeowners to treat their homes as piggybanks, extracting cash by increasing the size of their mortgages. Georgia lacked any similar protections (and the Bush administration blocked the state’s efforts to restrict subprime lending directly). And Georgia suffered from the difference.

gojomo 17y ago
It wasn't just Bush people weakening the traditional "20% equity" threshold. Lots of political and government efforts, including the government-sponsored mortgage subsidizers Fannie and Freddie (deeply linked with Dem party leadership), were bending longstanding practice to promote home ownership by all and loans to previously "underserved" borrowers. Like Texas, Canada also held fast to the traditional 20% homeowner equity requirement and was similarly spared the same extreme housing bubble and crash. (Now, if some buckaroo lenders want to make risky no-money-down loans, that'd be OK -- as long as public policy wasn't cheering them on, fraud on both sides of the table was vigorously prosecuted, and the public treasury wasn't insuring the transactions. When government and big business are all pulling in the same feel-good, don't-ask-uncomfortable-questions direction, there's danger.)