Dean Baker: “It was an enormous mistake for the United States to allow a housing bubble to grow to such dangerous proportions. It is unfortunate that the Federal Reserve Board and others in policy making positions ignored warnings when this crisis still could have been averted. ”
Blame the Fed and your elected officials if you don’t like foreclosures or unemployment.
Honestly, why the hell did they have to create a ponzi scheme that was sure to crash?
As an analogy, let’s say a smoker (cigarette addict) is going through withdrawals in rehab. (This is like the tech crash).
So instead of letting him go through the pain of withdrawal, you give him a case of whiskey so he forgets about smoking and feels better for the next week, but then he ends up an alcoholic, which is even worse. (This is the housing bubble.)
Now what are you gonna do with that alcoholic? Give him heroin to shake off the alcohol? Give him back the cigarettes? What can the Fed really do?
In the eyes of the Fed, it was worth getting drunk because the hangover from the valium withdrawal was so bad. A bunch of wimps!
Where’s the leadership in this country?
JES – I should have added your comments to my post. Young people need a chance to buy a house too. With 5 years out of college, maybe you earn $50K/year, and you can only qualify, w/ a 30 year fixed, for a $150K – $175K home. We need many $150K homes in San Diego for the young first time buyers. Starter homes need to come back to that level. With less money spent on housing, families have more disposable income for education, retirement savings. As it is now, we are lining the pockets of builders, making the rich get richer. Didn’t Toll Bros. CEO get $31 mil last year? That $31 mil could have been used to bolster every buyer’s retirement account by thousands of dollars.
