Brown: Botch Housing Even More

John Seiler:

The housing crisis of recent years was caused by the government itself. The Federal Reserve Board — a quasi-private bank whose directors are appointed by the president — has debased the dollar while keeping interest rates artificially low. That caused the boom/bust cycle that wrecked the housing market.

Fannie and Freddie, the two giant quasi-private, quasi-government entities that provided millions of easy-money loans that made the boom even bigger, went bankrupt. And “affordable housing” is a scam to subsidize developers with tax dollars.

So, what are Gov. Jerry Brown and California Democrats demanding? Even more government involvement in housing!

Reported the L.A. Times:

Joining California’s congressional Democrats, Gov. Jerry Brown is calling on President Obama to appoint a new federal housing regulator, saying the acting director is “hindering California’s economic recovery and harming state efforts to promote clean energy.”

In a letter to the White House last week, Brown echoed the concerns of more than two dozen House Democrats, arguing that the Federal Housing Finance Authority under Acting Director Edward DeMarco has “ignored” the Golden State’s foreclosure crisis by “failing to exercise its full authority over residential mortgages underwritten by Fannie Mae and Freddie Mac,” the housing finance agencies seized by the government in September 2008 as mortgage losses mounted.

That’s like “helping” a drowning man by giving him a glass of water.

What California, and America, really need is for the government to get totally out of the housing business.

First, the Federal Reserve Board itself should be dissolved. Ever since it was imposed on us in 1913, it has inflated the currency, thereby effectively stealing people’s savings. And its inflationary policies cause the boom/bust cycles that devastate millions of people.

Second, Fannie and Freddie should be abolished, their assets auctioned off to the highest bidder.

Third, all tax-funded “assistance” to housing should be ended. As Wayne Lusvardi reports today on CalWatchDog.com, the free market itself is by far the best way to provide low-cost housing to Californians. Government only makes everything worse.

Jan. 17, 2012

 

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  1. Beelzebub
    Beelzebub 17 January, 2012, 13:27

    The facts show that the housing crisis was caused by a collusion between government and the TBTF financial firms. The government deliberately failed in their assigned and obligated duty to ensure that the financial institutions were conforming with the law and with the generally accepted accounting practices, re: investing and lending. The TBTF institutions ignored the law and ignored the generally accepted accounting practices, re: investing and lending. Loans were being sold back to Fannie and Freddie by the investment banks that were much riskier than advertised.

    Richard M. Bowen, former Chief Underwriter for Citigroup – testified before congress about the housing and investment collapse. He said that he warned his superiors of concerns that some types of loans in securities didn’t conform with representations and warranties in 2006 and 2007. He also said that in mid-2006 60% of the mortgages purchased and sold were defective. he said in 2007 that percentage increased to 80%. This was the Chief Underwriter and he said this under sworn oath before Congress.

    When you sell loans to people who have no chance in hell of paying that loan back – and then package that defective loan in an investment security and sell it to an unsuspecting buyers thereby washing your hands of it – there are certain words that describe such a practice. No one forced them to participate in this scheme. It was all done knowingly and voluntarily.

    If we want to stop this rampant corruption and improve our society we have look at what happened objectively and blame both parties involved in the collusion. Until we can do that nothing will change.

    Reply this comment
  2. queeg
    queeg 17 January, 2012, 23:39

    No one cares!!”

    Reply this comment

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