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    • Accepting and Using Climate Change
      A couple days ago I was thinking about the problem of surveillance states and I realized “this problem is likely to become less of one because of climate change.” And I started thinking about all the opportunities and good things climate change makes possible. My grieving was done. My pre-grieving, I suppose. I see grieving […]
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Obama to homeowners: I didn’t say it was your fault, I said we’re going to blame you

Well, actually, he is sort of saying that homeowners were at fault for the housing crisis.  Yes, yes, MOST of us were just responsible, law-abiding citizens, living within our means, paying mortgages on our modest little townhouses as we worked at jobs we loved.  Then the bankers saw an opportunity to lend money to millions of suckers, driving the cost of housing up.  Then they securitized those loans, sliced them up into pieces, sold them to unsuspecting pension and mutual funds and created a whole new financial instrument to insure speculators against risk.

When the bubble burst and people lost their jobs and the economy was taken to the brink of Armageddon because of all of the bankers’ wild speculations, the last people on earth who were asked to take a haircut were the bankers who refused to take any losses on the mortgages they expected to make money on in perpetuity.  It didn’t matter if those same homeowners no longer had jobs or were making less money.  No, they were not going to take a penny less than they expected.  So the government bailed them out and did nothing to help people stay in their homes.  We didn’t adjust mortgage rates or write down principal or stop anyone from being thrown into the street.  Because early on, THIS administration decided to bail out the bankers over everyone else.

And now, future homeowners will also suffer.  This administration has decided to get out of the housing business and let the private sector take over.  The cost of owning a house is expected to go up.

I love this piece of the article:

Previous generations of politicians created Fannie and Freddie as a means of providing those benefits while pretending the costs did not exist. The companies were declared to be private during the fat years, and their shareholders profited handsomely, even as everyone understood that the government would stand behind the companies during the lean years.

That strategy has probably been exhausted, as Washington appears to have lost its appetite for implicit guarantees.

That leaves an unpalatable choice between making the cost of the system an explicit government obligation, or making it harder for Americans to buy homes. Any reduction in government support for the mortgage market is likely to increase the cost of home borrowing.

Plans to revive private sources of financing for mortgage loans also need to be harmonized with the government’s countervailing efforts to reduce risk-taking by financial institutions. Some analysts are worried that new rules and regulations will limit the ability or willingness of the market to finance mortgage loans.

Alex J. Pollock, a fellow at the American Enterprise Institute, said he was confident that lenders would learn to operate within the rules — or learn to go around them — but he added that the effort required to do so would be billed to the borrowers.

“Enterprising companies are very able to figure out how to deal with these regulations, but that’s not free,” he said. “The loans will cost more.”

Well, at least I can say that I didn’t vote for him.  Twice.