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> But I do think the reasons for this accelerated wealth concentration need to be clearly understood, and in some cases neutralized - unpunished financial fraud

by anamax 16y ago

> But I do think the reasons for this accelerated wealth concentration need to be clearly understood, and in some cases neutralized - unpunished financial fraud that led to the crisis, I'd agree, but the good folks in MA just re-elected Barney Frank. Govt caused the housing crisis and the credit crunch, so if you're arguing that govt will fix it, you get to explain why things will be different this time.

SkyMarshal 16y ago
'Govt caused the housing crisis and the credit crunch' An assertion without proof. If you want to have this conversation, you have to prove or at least support that assertion first. It's a GOP talking point, not an axiom.
- anamax 16y ago
  Securitization was encourage by govt action. The monopoly on bond rating was also govt action. The bond insurance that was used to turn risky assets into safe ones that banks could hold to meet their capital requirements was yet another govt creation. (Govt wanted regulated institutions to hold such securities to increase the demand and thus stimulate the supply.) Govt also "encourage" banks to make housing loans that they wouldn't have made otherwise by making such loans a condition of doing other things. And then there's "encouraging" banks to hold fannie and freddie stock by giving it special treatment for the purposes of capital reserve. That pretty much guaranteed that any problems at fannie and freddie would poison the banking sector. And let's not forget that fannie and freddie were lying about the loans in their portfolio and in the market in general. Everyone was doing their risk analysis based on fannie and freddie's numbers, which were wrong. Then there's the small matter that fannie and freddie set a govt guaranteed price level. The housing market is subject to govt action at so many points that it's absurd to argue that govt action is not responsible. As far as parties go, I didn't mention Dems or the GOP. If I had, I'd have pointed out that dems were more active in this, but that repubs were happy to help "encourage" home ownership.
  - tapiwa 16y ago
    I wish I could upvote this more than once. I have been screaming for a long time, that the housing boom and subsequent bust were directly caused by government action. Thomas Sowell wrote a very interesting and insightful book on the subject ... http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/0465018807 http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/046...

by anamax 16y ago

SkyMarshal 16y ago

'Govt caused the housing crisis and the credit crunch' An assertion without proof. If you want to have this conversation, you have to prove or at least support that assertion first. It's a GOP talking point, not an axiom.

anamax 16y ago
Securitization was encourage by govt action. The monopoly on bond rating was also govt action. The bond insurance that was used to turn risky assets into safe ones that banks could hold to meet their capital requirements was yet another govt creation. (Govt wanted regulated institutions to hold such securities to increase the demand and thus stimulate the supply.) Govt also "encourage" banks to make housing loans that they wouldn't have made otherwise by making such loans a condition of doing other things. And then there's "encouraging" banks to hold fannie and freddie stock by giving it special treatment for the purposes of capital reserve. That pretty much guaranteed that any problems at fannie and freddie would poison the banking sector. And let's not forget that fannie and freddie were lying about the loans in their portfolio and in the market in general. Everyone was doing their risk analysis based on fannie and freddie's numbers, which were wrong. Then there's the small matter that fannie and freddie set a govt guaranteed price level. The housing market is subject to govt action at so many points that it's absurd to argue that govt action is not responsible. As far as parties go, I didn't mention Dems or the GOP. If I had, I'd have pointed out that dems were more active in this, but that repubs were happy to help "encourage" home ownership.
- tapiwa 16y ago
  I wish I could upvote this more than once. I have been screaming for a long time, that the housing boom and subsequent bust were directly caused by government action. Thomas Sowell wrote a very interesting and insightful book on the subject ... http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/0465018807 http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/046...