From Fabius Maximus:
[emphasis added]
After three years neither the public nor many of our leaders see the driver of the housing crisis: we built too many homes. In some places (e.g., Las Vegas, California’s central valley) far in excess of any real demand. Outmigration from mismanaged and dying urban areas (e.g., Detroit) caused more over-capacity. Supercharging the bubble was the purchase of homes by people who could not afford the prices paid. But overcapacity was the primary driver.
The obvious nature of this statement is lost on Brad Miller, who in an act of comedic brilliance (were it not so tragic) offered up H.R. 5409, the Residential Construction Lending Act this summer.
Brad Miller's solution to excess capacity?... more supply!!
Brad Miller, Grade School Economist.
out
Not only do we not need more new houses, (re: HR 5409), but we also don't need more builders defaulting on loans. That is a part of the reason some small banks failed. It wasn't because of home buyers or the economy it was because they lent too much to developers who then walked away from those developments when the housing boom predictably went bust. Furthermore, the artificial price inflation and mortgage fraud being done by this industry was warned about years in advance but the govt, ever in bed w/the real estate and banking lobbyists, ignored the warnings. Now, tax payers get to bail out the very crooks who caused the crash, again thanks to cozy relationships in congress (and the state legislatures too). HR 5409 would put taxpayers, via the Treasury Dept, on the hook for failed development loans. This way, banks can be even more irresponsible because now they won't have to deal with those losses. We will.
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