Here is truly what happened in the housing debacle:
First: It must be recognized that after food and clothing, people wanted a house – but not just a house. They wanted a bigger house than the homes that their parents and friends own.
Second: Those who sold homes and appraised them had an incentive to exponentially increase prices, since they got paid more the higher the price.
Third: Most states allowed lenders to sue for deficiencies, even when house prices fell dramatically, which seemingly diminished the downside to lending.
Fourth: The executives, who brokered house loans, engineered ways to get financing to almost anyone who could say, “yes,” and sign their name (or, as I first wrote, "sing" their name).
Fifth: Those same executives who knew how risky the "sub-prime" loans were, bundled them up and conned pension fund firms to buy them (essentially, indirectly selling them to the middle class, who secure all their savings in such funds).
Sixth: When the economy started going a little sour, a domino effect of defaulters occurred. So, who paid? The original realtors, mortgagors, and executives didn’t pay. They had their money already. It wasn’t tied up in the loans. Those who paid were in the middle class, who lost their investments, paid the taxes for the bailouts, and paid higher prices, due to the bankruptcies of others.
Now, President Obama (who I support) wants another bailout of all the people who are “under water,” because they purchased a house they could not afford. So, who's going to pay for that bailout? Yes, the middle class, again.
How would the Republicans react to this crisis? I’m sure they’d do the same thing as Obama, but under a different guise, because that's what the politics of staying in office require. At least under the Democrats, maybe those same executives who were selling crack (oops, I mean, sub-par loans) to the masses would, at least, pay a tax equivalent to what the middle class pays.
Loren M. Lambert © February 2, 2012
First: It must be recognized that after food and clothing, people wanted a house – but not just a house. They wanted a bigger house than the homes that their parents and friends own.
Second: Those who sold homes and appraised them had an incentive to exponentially increase prices, since they got paid more the higher the price.
Third: Most states allowed lenders to sue for deficiencies, even when house prices fell dramatically, which seemingly diminished the downside to lending.
Fourth: The executives, who brokered house loans, engineered ways to get financing to almost anyone who could say, “yes,” and sign their name (or, as I first wrote, "sing" their name).
Fifth: Those same executives who knew how risky the "sub-prime" loans were, bundled them up and conned pension fund firms to buy them (essentially, indirectly selling them to the middle class, who secure all their savings in such funds).
Sixth: When the economy started going a little sour, a domino effect of defaulters occurred. So, who paid? The original realtors, mortgagors, and executives didn’t pay. They had their money already. It wasn’t tied up in the loans. Those who paid were in the middle class, who lost their investments, paid the taxes for the bailouts, and paid higher prices, due to the bankruptcies of others.
Now, President Obama (who I support) wants another bailout of all the people who are “under water,” because they purchased a house they could not afford. So, who's going to pay for that bailout? Yes, the middle class, again.
How would the Republicans react to this crisis? I’m sure they’d do the same thing as Obama, but under a different guise, because that's what the politics of staying in office require. At least under the Democrats, maybe those same executives who were selling crack (oops, I mean, sub-par loans) to the masses would, at least, pay a tax equivalent to what the middle class pays.
Loren M. Lambert © February 2, 2012
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