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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.

13 Responses

  1. Obama never fails to disappoint.

    • He’s very good at it! isn’t he?
      Maybe that’s all he’s good at…

    • He never fails to disappoint Us The Peasants.

      He never disappoints the lords and barons who elevated him to his current position, bending the nomination rules as needed.

  2. Hoolver did nothing or the wrong thing because he felt constrained by the law, custom, the Constitution, his advisors and what not. he was wrong but Obama doesn’t even have that excuse. When a president compares poorly to Herbert Hoover, you know he is doing a very poor job.

  3. Wait, does “no more implicit guarantees” mean we won’t bail out the even bigger TBTF banks going forward?

    Ha-ha-ha. So what is the plan really?

    How about we just mandate that everyone pay money to mortgage bankers without receiving much in return, kind of like we’re doing with health insurers?

  4. Somewhat related: an article on “boomerang kids”, of which I may be the world’s oldest. 😛

    At least my situation is better than what I read in this article.

    As for home ownership, the only way I will ever own a house is one I don’t want to happen any time soon–when Mom dies (I’m her only child).


    • [snark] Of course, it’s all their fault for not licking the boots of the lords and barons diligently enough. [/snark] 😛

    • The lords and barons may well expect uprisings from frustrated young peasants, and that may be one major reason they are establishing our current Panopticon State. 👿

  5. The New Economy Is The No Jobs Economy

    This was written by Paul Craig Roberts, a former Asst. Secretary of the Treasury in the Reagan Administration.

    Mr. Roberts has wised up a lot over the years. 🙂


  6. Honest, RD, I’m not trying to spam your thread. I just keep finding good stuff.


  7. Wonder why the media isn’t covering this story that will have a devastating effect on working people by Obama and his Administration?

    • Just in case WV doesn’t know this already–I suspect she does know–the same Malefactors Of Great Wealth who own Obummer also own the corporate media. 👿

      • On 2nd thought, now that our @#$%ing spy agencies know everything about everybody, I wonder if even the MOGW can control the spies any longer. Maybe the spies are the rulers now. 👿 👿

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