Thanks for the ping, aggie21.
As it always does.
bump
Sowell Ping
Until Barney Frank and the government managed to screw it up.
An excellent example of how an apparently minor governmental policy shift develops an entrenched advocacy in both consumers and bureaucrats who keep pushing the envelope for increased usage. Thus what started as a 'good thing' of ensuring equality in making mortgage loans creeps into making riskier loans because it became to the benefit of advocacy groups (ACORN), politicians, banks who could sell these loans as securities, Wall Street and finally those semi-governmental obscenities of FannieMae and FreddieMac where salaries and bonuses were based on the amounts loaned. This was not 'Free Market', this was 'Decreed Greed Market' playing with our tax dollars and credit.
OBAMA=IDIOT
SOWELL=GENIUS
Thanks for the ping, aggie21.
“Both HUD and the Department of Justice began bringing lawsuits against mortgage bakers when a higher percentage of minority applicants than white applicants were turned down for mortgage loans.”
Just like the whining from all the states (liberal, like MD) that too many blacks are in jail/on death row so there must be something wrong with the system and the “white” people running it (never mind the black cops and judges, or least of all victims), and we’re going to sue them all for daring to have more blacks arrested than whites.
“It should also be noted that the same statistical sources from which data on blacks and whites were obtained usually contained data on Asian Americans as well. But those data on Asian Americans were almost never mentioned.”
OH! Big Shock! People who don’t cause problems don’t help promote the “minority victim” scheme.
Orientals (AKA Asian-Americans) - the Un-Minority.
And we all laughed at her?
Well, she's getting the last laugh...
How in the hell are we going to stop this?
I don’t even know what else to say.
Dr. Sowell, for whom I have immense respect, is ignoring the real problem in this column.
Bad mortgages, while certainly the root of the problem, are not the major issue. The economy could absorb the total amount of such mortgages with not much more than a stutter.
The real problem is what the market did with these mortgages. It bundled them with good mortgages, sliced and diced the bundles, and turned them into “securities.”
In the process it increased the risk factor to the economy by one or perhaps two orders of magnitude. The BIG issue is that nobody is able to determine the “real” value of these “securities,” a misnomer if there ever was one. This uncertainty is what is causing the real problem.
The government didn’t force the market to do this.