Egging On The Worst Behavior
Readers suggested a topic based on a quote from a previous post. “From today’s desk clearing thread: ‘…and start moving the government out of the business of egging on the worst behavior.’ Proposed weekend topic: What was it that started the government down the path of egging on the worst behavior to begin with?”
A reply, “My opinion? That oft-repeated notion that homeownership makes people better. As in, their kids do better in school, they’re more engaged in their communities, the birds in their trees sing sweeter tunes, you get my drift.”
To which was said, “I agree that’s how it was sold. But the reason to keep it going was $$$, campaign contributions, tax revenues, etc. Also, of course, those that get in early on a ponzi scheme tend to benefit disproportionately and have an incentive to keep it going.”
“Did anyone ever examine whether one “owning” a house was the cause of all of those supposedly good things or instead merely a symptom of having a stable job with a decent income, enough income to be able to do all of those supposedly good things?”
Another added, “Homeownership was a byproduct of being an upstanding citizen. Back in the days of real down payments, and real credit checks before the banks handed you a couple hundred thousand bucks. Then the marketers/advertisers started promoting the view that you could turn yourself in a upstanding individual by owning a home.”
The first poster replied, “Presumably, before everyone who could breath qualified for a mortgage, owning a nice home, funded by a prudently-underwritten mortgage loan, was an indicator of middle-class stability; the same people who worked hard, had decent jobs, and lived in upscale neighborhoods also were more engaged in their communities, had above-average children, and enjoyed the sounds of the most gifted song birds singing sweet tunes in the canopy of trees above their heads.”
“Fast forward to the subprime lending era: Confused gubmint economists, who thought that home ownership caused desirable social outcomes, lowered the bar to the level where all manner of riffraff and no-account lowlife could qualify for a loan. Suddenly home ownership became a much better indicator for future financial hardship than for desirable social outcomes. Way to go, social engineering flunkies!”
One added, “I would argue that the government was the trailing horse here; turning a blind eye to the depredations of GMAC, GreenPointe, Countrywide and their ilk, who were already in full swing by the time our (stated,) economic policy turned to real estate to bail it out of the tech crash in early 2000.”
“As early as the mid- 90’s, these mortgage lenders had blanketed the country non-stop, day and night with national advertising campaigns offering cheap money to the masses. They proved so popular that opposing them would have meant political suicide. George Bush’s “ownership society” only codified the carnage that was already well underway.”
And lastly, “In my opinion Wall Street saw that the American middle class had accumulated a massive amount of money. They then took over our government through bribery and set themselves to work stripping that wealth. Mission accomplished.”
