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Posted on 10/11/2008 9:09:30 AM PDT by TenthAmendmentChampion
Edited on 10/11/2008 9:14:17 AM PDT by Admin Moderator. [history]
President Bush emerged from a meeting with foreign financial officials on Saturday and pledged a global response to the credit crisis that will lead toward a "path of stability and long-term growth."
"The United States has a special role to play in leading the response to this crisis," the president said. "That is why I convened this morning's meeting here at the White House and it is why our government will continue using all the tools at our disposal to resolve this crisis."
(Excerpt) Read more at apnews.myway.com ...
$ ping
The most effective tools, in my opinion, are neither cheap nor easy. We need to build a new “machine” to funnel money and expertise downward to individual citizens and small business owners.
I am no economic wiz but this does not seem like a very American way of seeing things. While I agree that it is a global economy, I don't see where it helps to publicly talk about having no winners. America should come out a winner. The rest of the world benefits by America being a winner.
TRANSLATION: the USA is being asked to bail out the world.
I don’t see any winners in this. I do see survivors.
excellent point, durasell.
McCain did acknowledge the homeowners caught up in the mortgage crisis, primarily those facing foreclosure, not the more responsible home owners hit by declining home values, and I do not believe he has yet grasped the enormity of the problem. That's OK though. Obama hasn't grasped it yet either, nor has the Bush Administration, Congress, or most Americans.
Speculation and greed drove the housing prices up. That same speculation also drove cities across the nation to build tracks of new homes well beyond the number of qualified buyers. As the inventory of houses grew, lending companies created new ways to “qualify” buyers in an effort to broaden the buyer base.
There is no question now that these creative mortgage financing techniques failed. There is ample blame to go around, including the lending institutions, the unqualified buyers, the federal government, both political parties that were filling their coffers from the many participants, but also developers and local governments across the nation that approved the new tracks of homes thinking they were going to reap tax windfalls from an increased population base.
If the federal government goes out now and buys every foreclosed home on the market it will not restore a healthy housing market. This is because there will still be a glut of available homes with no buyers to purchase them. All that will have happened is the inventory will have changed hands. The inventory glut could last 10 to 15 years, possibly longer.
So long as the inventory of available homes outstrips demand, that is qualified buyers, home prices will continue to decline. But, there is another long-term consequence no one is addressing. The excessive inventory will continue to crush the home construction industry for years to come.
I've reached the conclusion the only way to restore both a healthy housing market and the home building industry is to clear out the excess inventory. In the bluntest of terms, remove from the market a large percentage of homes the government takes possession of. I'm basing this premise on a Reagan Administration policy.
During the mid-eighties, President Reagan, in an effort to help the dairy industry restore financial health, had the federal government purchase and slaughter a sizable population of dairy cows. Fewer cows producing milk reduced the supply which in turn increased prices dairies could get for their products. A similar approach would restore home equities and the home building industry.
How the government removes the homes from the market can be debated, but it is necessary. The federal government could allow individual cities to coordinate some of the efforts by exchanging the vacant homes in exchange for comparable valued inner city properties in tracks needing revitalization, and then destroying the structure in the area needing to be revitalized.
That's just a suggestion, and I'm certain others might have other ways to reduce the excess inventory. The important fact remains that the excess inventory must be taken off the market if both home equities and the home building industries are to be restored to health.
I'm not a fan of government involvement, and I was upset when the Reagan Administration exercised such efforts for the dairy industry, but I can now see clearly how a similar effort in the housing market would go a long way to restoring the entire economy. This action PLUS learning from the mistakes that created the financial mess, and putting in place whatever legislation is necessary to prevent a repeat, will do more than all the money the government is lavishing on financial institutions.
I think the question is whether nations can abandon an attitude of realpolitik in economic matters of this nature. It’s fascinating. Do the talks fall apart under the burden of self interest?
I doubt if we’ll see fires lighting up the night sky by burning perfectly good houses.
The problem with this is some areas don’t have an excess of homes. What we have are prospective buyers with too much debt and not enough savings. They want the homes, they just don’t qualify. And I have no idea how to solve this problem and my livelihood depends on the home building industry.
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No fires, but people are willing to let the homes fall into disrepair. We saw this in cities in the 1970s in some urban ghettos. Structures of all kinds were allowed to fall into a state of extreme disrepair.
The thing we have to do -—in my opinion — is treat each homeowner as a small third world country that has taken on too much debt — work out new terms and keep the loans on the books. Forcing money downward through the banking system may not work...we need to do the labor intensive thing, forcing money upward.
This is just my opinion and I could be completely wrong.
I’m all for the loans being re-financed but at the original amount. It will be patently unfair to those who have struggled but made their payments.
Interesting that it is again a G-6 meeting. Although not mentioned in the article, Russia is a missing player even though their stock market tanked before ours. When you consider that the World Bank was hacked into during June and July; as well as the incredible oil speculation that took place at the same time, it makes you wonder if there is more going on than “capitalism” having a bad couple months.
Didn’t finish...unfair to those who struggled and made their payments at a higher interest rate and will have to continue to pay the original amount and the higher interest rates.
If we’re going to let one person refinance at a better deal then we have to let everybody refinance at a better deal.
I’d throw the idea of fairness out the window. It’s an an additional burden and generally doesn’t have any place in economics.
On the other hand, I agree: the prices of the homes should be maintained,
Again, just my opinion.
If we lower the principle amount who gets the equity when it’s sold down the road? As I’ve said before, if the government came to me and said “We’ll lower the principle and lock the rate at an interest you can afford, but when you sell it someday you don’t get the equity” I’d say, “That’s no different from renting.”
There is no solution to this other than biting the bullet and pray.
You can’t eliminate risk from the financial markets but government protection should only be applied to those “banks” that assume a certain low level of risk.
These are such simple concepts but apparently greed trumped common sense once again.
Almost seems like the whole George H. W. Bush “Trilateral Commission” “CFR” “New World Order” conspiracy of the 70’s has now become a reality. Back then, those who warned about this were connsidered ‘area 51’ and ‘tin-foil hat’ kooks. Not so ‘out-there’ now huh? It’s interesting to wikipedia “The Trialateral Commission” and see who the members are... President G.W. Bush appears to be trying to fulfill predictions and accusations about his father...
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