The Affordable Mortgage Depression: Recent Comments

Comment on Origin of the Housing Bubble: “The National Homeownership Strategy”

Whitney Ross — Fri, 12 Mar 2010 17:50:42 GMT

Thanks for reading and I appreciate your comment but I do not understand your logic. I may not have been clear enough regarding how overtly the Government stated its intention to manufacture a housing bubble.

I am not observing a correlation between The National Homeownership Strategy and the Housing Bubble. I am highlighting the Government’s clearly articulated intent in 1994/95 to create a homeownership bubble and their written arguments as to why this would be a wonderful thing for the economy.

You cite the growth of subprime as a cause of the bubble. What do you think “caused” subprime to grow so dramatically. Clearly written Government mandates directed massive amounts of Federal capital into increasing subprime lending. Parallel legislative and regulatory reforms required the expansion of subprime within the private sector. This is not conjecture, but based on historical documentation.

“The National Homeownership Strategy: Partners in the American Dream” is effectively a how-to book for creating a housing bubble.

“This report identifies specific actions that the federal government, its partners in state and local government, the private, nonprofit community, and private industry will take to lower barriers that prevent American families from becoming homeowners. Working together, we can add as many as eight million new families to America’s homeownership rolls by the year 2000.” - Bill Clinton, May 2, 1995

The intent of the NHS was to make homeowners out of 8 million individuals who could not afford to purchase a house and service a mortgage. Mission accomplished.

Comment on Origin of the Housing Bubble: “The National Homeownership Strategy”

Ron Veelik — Fri, 12 Mar 2010 16:01:51 GMT

Good clear Economics. Understandable by the man on the street. Good Job.

Ron Veelik

Comment on Origin of the Housing Bubble: “The National Homeownership Strategy”

IrvineRenter — Fri, 12 Mar 2010 14:21:13 GMT

This is an interesting article, and there is likely some contribution to the bubble from this program; however, you place too much blame on this program for causing something far larger. Your argument is a classic example of correlation without causation.

BTW, you can make all the same arguments about the repeal of welfare which also happened at the same time.

A more robust correlation exists between the growth in subprime lending and the housing bubble, and with that correlation exists some causation.

Comment on Origin of the Housing Bubble: “The National Homeownership Strategy”

steve bourg — Fri, 12 Mar 2010 12:10:23 GMT

GR8 article. In '08 when the calamity was hitting, I searched diligently and finally found a Rosetta Stone of understanding -- same as you have -- but I stopped when I saw the printed Regulations Clinton enacted and enforced 7/1/95 with his minions. The regulations were to the CRA, and would make the Russian Politburo proud. They had teeth, and number-forcing requirements to make x % of loans to the poorest y% in a bank's community, and on and on. What a distortion of the purpose of govt! Too bad the media has had 2 years to look for this and announce it, but they have not. And Barney Frank, Andrew Cuomo, et al have "blood on their hands" as well as Clinton. Anyway, GR8 article Ross!!

Comment on Origin of the Housing Bubble: “The National Homeownership Strategy”

Kelli — Thu, 11 Mar 2010 20:57:42 GMT

This is one of the most insightful, thought-provoking pieces I have read on the roots of the housing crisis.

Thanks.

Comment on A Health Care System to Emulate

Robert Duncan — Wed, 04 Nov 2009 16:49:35 GMT

While the 4% figure is interesting, if a country wants to spend 5%, 10%, or even 20% on healthcare that is OK with me as long as private individuals back that choice based on their own ability to spend or their insurance policy. Where the national healthcare issue breaks down is when one group of people want another group of people to 100% cover THEIR healthcare costs so that they can keep grandma alive for two more weeks. Even choices like that require costs and the people that make this choice should be made to take on at least some of the financial hardship of the decision. When they can offload the cost to government plans at no cost to their own, there is no incentive to lead a healthy lifestyle. By the way I will be in Singapore in 3 days looking forward to seeing what it is like.

Comment on Reminder: Economist Hank Fishkind Declares Depression Over in 21 Days

Whitney Ross — Thu, 29 Oct 2009 18:25:42 GMT

MM,

You raise interesting issues. The weekly unemployment insurance claims data captures incremental people week-to-week who have lost their jobs AND filed for unemployment benefits. These people are easy to count.

The cumuluative data suffers from all the issues which you identify.

As far as I can determine the Government uses statistical models to estimate many of its measures of unemployment. The question is how good are these estimates and what do they ignore.

I have often wondered if the Government has EVER accounted for me as a member of the unemployed, and if so where I have been classified. I resigned from my job over a year ago (the company had an unsustainable business model) and have not claimed unemployment or other welfare benefits. I have never been contacted by a representative of the Department of Labor and can not imagine a way that the Government might capture me for its statistics. I presume that the estimated unemployment rate does not include me. If I have been ignored, I am sure many others have been as well.

Comment on Reminder: Economist Hank Fishkind Declares Depression Over in 21 Days

MM — Thu, 29 Oct 2009 17:45:15 GMT

Does the unemployment data consider claims that have ceased due to the expired time frame they allow one to collect unemployment?

If you claimed unemployment last year than you may no longer be able to make a claim if you have received your maximum benefit. Do they include that?

What about folks who just stopped making claims because they got tired of having to deal with yet another terribly operated bureaucratic agency that will not answer your phone or call you back.

Comment on Ignorance Is Bliss

MM — Mon, 21 Sep 2009 18:31:16 GMT

Whit.... few suggestions to embrace the suffering..........

Wiener Circle after midnight.

Second City free showings close to midnight on Fri. and Sat. then cross street to old town tavern and drink till the sun comes up.

Stare at cloud gate for one hour.

game at Soldier field in Dec.

smoke a pack of reds over a cheeseburger at billie goat tavern on lower michigan.

long island iced tea at lilly's when there is a blues band.

Comment on Chart: US Household Debt vs. Personal Savings Rate

Bathroom Accessories — Mon, 07 Sep 2009 12:41:36 GMT

I was just thinking about US Household and you've really helped out. Thanks!