Rep David Price, Rep Mel Watt, Rep. Brad Miller and Rep. Bob Etheridge were all signatories of a letter to the then President Bush pointing out that his administration was too interested in the "safety and soundness" of GSEs (government sponsored enterprises) better known as Fannie and Freddie Mac. They wanted the government to continue pumping the housing bubble through Fannie and Freddie and expressed their concern that "safety and soundness" might jeopardize that. The letter.
We have been concerned that the Administration’s legislative proposal regarding the GSEs would weaken affordable housing performance by the GSEs, by emphasizing only safety and soundness. While the GSEs’ affordable housing mission is not in any way incompatible with their safety and soundness, an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.They signed failure.
Market bubbles are not solely created by markets. Government can induce the creation of bubbles through unhealthy incentives and the Fed's loose money policies. The result of Bob Etheridge's, Brad Miller's, Mel Watt's, and Davis Price's policies was the creation of a real estate bubble that dwarfed all others for the 100 years prior. The ride up is nice, but the ride back down sucks and those who feel the pain most are those who were enticed into Brad Miller's "affordable homes" (better defined as loans beyond the means of debtors).
Sometimes a graph can say it all.....
Some saw this bubble, some wanted to avoid the pain...
out
No comments:
Post a Comment