I think Bush has already promised to bail out the industry. Greenspan definately shares some of the blame for this, but I am not sure how much. I am not a big Bush fan, but I don’t see how he is responsible.
Honestly, I don’t know why this was so hard to predict. Rapidly rising housing prices, low interest rates, lots of speculation, and mortgages being issued for interest only loans, to qualify purchasers for the maximum home possible. Looked like disaster from the beginning to me.
I do think Greenspan is right here though. The housing market has the potential to seriously impact the US economy. America still has a major impact on the rest of the world. Without strong American investment, the world economy will suffer. Greenspan may have made some mistakes, but he controlled the Fed for 16 years, most of them very successfully. He isn’t an idiot.
No but I'm surprised at how he has suddenly become quite anti Bush. Since everything is so partisan and since he is now retired and way old, it makes what he says very suspect.
Too many people own outright, like me, or are not fools with their house purchases, like all of my friends, or rent, like my oldest son for this to account for that big a percentage of the economy. I'd have to say the total percentage of the economy involved with bad loans and housing decisions is much smaller than health care.
It wasn't. Three and a half years ago, well before the peak, a friend who does business at a very high level warned me of the coming disaster. He told me to get out of my house and rent until the blood dried a little, then buy at the bottom of the market. Smart man.