09.23.08
Hazard for Lead
The Ace of Spades explains the Panic of ‘08 (emphasis mine):
This was a fifteen year campaign by the Democrats, ACORN, and Fannie and Freddie’s executives to loosen up mortgage requirements to the point where there simply where no requirements at all.
Net result? Trillions of federally guaranteed dollars flow into the housing market that shouldn’t have been there — suddenly buying a house becomes the easiest possible purchase you can make. All you need is a signature and a smile.
If the federal government were guaranteeing a trillion new dollars for no-money down car purchases with no credit checks or proof of employment or income, what do you think would happen to the price of cars?
They’d triple. For a while.
Housing market turns into dangerously overinflated bubble. Which is what always happens when a trillion fresh, cheap, easy dollars flow into a sector and begin chasing the same limited pool of goods.
I think that’s the best explanation I’ve heard yet. Fannie and Freddie removed the moral hazard —not only for the borrower but the lender.
Now is no time for your lies, hippies. Just admit that when identity politics meets the marketplace, the artificial sweeteners must be measured over ever more carefully.
