It is not every day that I have to admit that I have over-estimated the intelligence of politicians, economists, and “journalists” (I should probably have also used quotation marks for the so-called economists). But today is such a day:

The following appeared in the Washington Post, not the Onion (though maybe the Onion gave the Obama Administration the original idea):

“President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default. Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.”

How does any rational person react to this insanity? The government is intentionally leading us into another crisis. But we already knew that was going to happen. So let’s restate it: The government is intentionally leading us into the same crisis that devastated us before. It is encouraging malinvestment that they hope will lead to another boom that can only lead to another crash.

We read insanity after insanity. For example: “It is very difficult for people of low and moderate incomes to refinance or buy homes.” That would be a subset of the secret truth: “It is very difficult for people of low and moderate incomes to afford expensive things.” But that is exactly what keeps the prices of housing as affordable as possible. If all these people could buy houses, this would drive the price of housing up. Housing would become less affordable! But our government believes in “trickle down” economics where a housing boom attract more housing construction with jobs in real estate and construction. But these jobs will all collapse and the government will pretend the reason for the bust is a mystery.

This is the difference between the market and the state as predatory lender. The market gives people an incentive to lower the price of homes as much as possible so that as many people as possible can afford housing. The state ropes poor people into debts so that, for a time, the price of housing becomes less affordable, and then it crashes when the debts finally catch up with us. The state’s agents consider the latter process to be “economic growth.” These people are like doctors who think tumors are good for people.

Another nugget of wisdom: “Before the crisis, about 40 percent of home buyers were first-time purchasers. That’s down to 30 percent.” This is treated as if it were only a matter of economic ability. But maybe people don’t want to own homes as much as they used to. If I was some high school senior in California or Florida who watched my parents suffer through an upside-down mortgage in 2007, I might have a different attitude toward home-ownership once I landed my first real job as an adult. Maybe a large number of people have decided that it is better to let the landlord deal with the risk in the real estate market.

“The administration’s efforts come in the midst of a housing market that has been surging for the past year but that has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases.”

Right. These people, the very people who Obama’s taxes are punishing and damaging the most, must not be allowed to invest in and rent out property. Rather than respect these people and see them as an asset, the state wants to encourage bad debts to the poor. The only people who will benefit are the “too big to fail” Wall Street operators.

One final point: Remember that the only reason we have a potential bubble in housing is because of Bernanke’s “Quantitative Easing.” Without easy money and super-low interest rates investors would never take these risks and attempts to push banks to loans on those who can’t repay would simply fail immediately. Behind all the other crimes lies the Federal Reserve as the enabler of them all. 

Oh no. Where's Frank and Dodd on this one? 

Oh no. Where's Frank and Dodd on this one?


Isn't this what got us in to the mess with the housing bubble? Obama wants to repeat this, why? 

You've got to be freaking kidding me. Who the heck would buy this? Not even libs will go along with this. 

I think he is purposely ruining our country. What is his real agenda? 

At this point, even Satan is shaking his head and saying, "I admire the effort dude, but you gotta be more subtle than that!" 

Ok, here goes:

I'm another despot thin and long.
Fools eschew the truth for my dance and song.
To buy my rhetoric first hit a bong.
Then tell your Constitution, "Bye, So long!" 

Soooooooooooooooooooo ---- not one single dem/lib has chimed in on this one? Guess they are too embarrassed to even read & respond. Surely they are in total favor of passing out free houses to all their low info compadres. Then, we can have more foreclosures and more banks going under & then we can blame Bush some more. 

How does any rational person react to this insanity? The government is intentionally leading us into another crisis.



Obviously written by someone who doesn't understand the big picture.

The idiots in the banking industry who lent money to anything that could breath in the animal kingdom and now only lending to those with outrageously high credit scores instead of just looking at who has the true ability to pay it back.

All the administration wants to do is restore some logic into the process.

The author of this article is just another partisan hack looking out for his political affiliation instead of the good of the country and its people. 

The idiots in the banking industry who lent money to anything that could breath in the animal kingdom and now only lending to those with outrageously high credit scores instead of just looking at who has the true ability to pay it back.

No dog is this fight, but who do you think the 'idiots" in the banking industry are? Government---*hint* fanny mae and freddie mac? 

The author of this article is just another partisan hack looking out for his political affiliation instead of the good of the country and its people.

Stop reading in the dark, Nightshade.

Creating another housing bubble isn't GOOD for the country.

It's Democrat policies that lead us to the troubles were in today.

The govt forcing lenders to lend money to individuals who would otherwise not qualify............ all in the name of having a piece of the "American Dream" is what caused the problems in the first place. Ask Mr. Frank and Mr. Dodd. I'm sure they'll continue to tell you everything is just fine. 

not one single dem/lib has chimed in on this one? Guess they are too embarrassed to even read & respond.

You don't really want a discussion. No one even said anything and you've already made up your mind as to the reason why. Either that, or you're trying to pot stir with the "too embarrassed" crack. There is a reason liberals are not responding (other than 1 comment from nightshade), but it's not from embarrassment, you can be certain.

I thought you were happy you got the liberals (aka "troublemakers") to leave, and not post here like they used to.

It's quite obvious why they don't post. Fact is, KU is a place where liberals and liberal viewpoints are not welcome. As soon as someone comes to a discussion from the left, the topical discussion stops and personal attacks begin. No one who is honestly interested in discussion will keep coming back day after day, unless it's to give some people a taste of their own medicine. It's no wonder the board get trolled so much.

Consider this my troll post, since I'm off topic. 

The idiots in the banking industry who lent money to anything that could breath in the animal kingdom and now only lending to those with outrageously high credit scores instead of just looking at who has the true ability to pay it back.

All the administration wants to do is restore some logic into the process.

obviously written by someone who doesn't understand the big picture... 

You don't really want a discussion.

There's really nothing to discuss. The facts speak for themselves. 

The facts speak for themselves.



Facts????? What are facts???? To a dem/lib there is no such thing as facts - only what the master tells them to believe. 

Obviously written by someone who doesn't understand the big picture.

The idiots in the banking industry who lent money to anything that could breath in the animal kingdom and now only lending to those with outrageously high credit scores instead of just looking at who has the true ability to pay it back.

All the administration wants to do is restore some logic into the process.


Return to logic? We had a housing bubble because we had the government subsidizing high risk loans for the sole purpose of having banks lending to high risk home buyers. Banks were less likely to do it before these heavy subsidies and strong arm tactics because they did not want to lose money.

And you blame the banks for doing what they were incentivized to do by the government, encouraged to do by the government, and threatened by the Justice Dept to do?

Why give the government a pass for their own specific directive? That would be like Iraq war opponents blaming soldiers for the operation and giving Bush a pass. 

I stand corrected. Liberals will defend this. Unbelievable. I really didn't think they would. But here it is! 

It's astounding that the gov't even considers more dinking with this issue. Lord God...give them the wisdom you gave a goose..LOL

That being said, this is what happens when you don't let things be and take a natural course. You would THINK after the drastic decrease in home values that THAT alone would encourage buying since things are more affordable...BUT credit/lending standards are much tougher thanks to the a**'s in that industry- so maybe now they have created a monster that needs constant and never ending gov't manipulation. They can only hope. We can only cringe. 

And LBF, I don't know what his end game is. I think he does believe that America's time on top has come and gone. I think there is a major push for globalism and a loss of national sovereignty. And in a world where the freedoms we have enjoyed are unprecedented and even undesired, that does NOT bode well for us. 

Why give the government a pass for their own specific directive?

Because it was their own party. 

Heard these borrows encompass only about 8% of the market, but have over 70% chance of defaulting. . . here we go again! 

Sorry but some logical reasoning needs to be put back into the credit industry. We are dealing with it now and have been for a couple of months even though we have a good income, put down almost 30%, built a home within our means and budget but our credit struggles to get over 670? because of the way they are doing things now.

We are worthy and able to pay a home loan without a doubt but these last few months dealing with this has been a PITA! 

Crazy, I understand. I heard the other day that the average credit score of a person being approved is 760, and average score of a person being denied is 710. That's obviously an extremely tight window!

However, this is a direct result of what the government did to the industry. Them getting involved again will only make that even worse, eventually. Government screws up almost everything it touches. Their history with this industry alone should make you want to keep them as far away as possible. 

The gvt also forced all the banks to take TARP money, even those that did not need nor want it. It was supposed to create an air of illusion so that no weak banks were singled out.

Then when they tried to repay TARP early they were told no. Then, down the pike comes all the things tied to the stupid TARP they didn't want anyways, and all of it was bad for the banks, investors, and much of it bad for the consumer.

This administration is out to ruin us. Period. 

Indelible --- 6 min ago - quote - hide comments

The claims made by President Bush



I knew this would be coming!!!!!!!!!!!!! And by a dem/lib at that!!!!!! hahahahahahahahaha --- too funny.


Hey, have you heard? Bush ain't prez no mo'......we'z got someone named Obama!!!!!!!!!!!!!!!!!!!!! Been like that since '08. 

Our credit score is good, but we were told as long as we met the minimum score, it was mostly about ability to repay. It had to do with debt to income ratio, income, and length of time on the job. 

Best part of all this is that whopping .08% you are getting as a "premier" savings account holder.

I feel so special. 

Must be a red letter day for Barney Frank. 

I don't know too many conservatives (meaning the people, not the lameass politicians) who defended TARP, even when it was being proposed.

But TARP was ALSO in response to what the government had done in this same industry, which it is ramping up to do again! Wake up already! 

But on the flip side, home loan rates are really low too. So you give and take with the interest rate thing. 

But on the flip side, home loan rates are really low too. So you give and take with the interest rate thing.


That's true, but then they get you on the criteria for qualification for a loan..that's all changed now. 

I knew this would be coming!!!!!!!!!!!!! And by a dem/lib at that!!!!!! hahahahahahahahaha --- too funny.

Tommyboy is on queue!!! 

It seams they have taken the 2012 campaign "FORWARD" to heart.

However they should bear in mind....

"Those who cannot remember the past are condemned to repeat it". 

That's true, but then they get you on the criteria for qualification for a loan..that's all changed now.

People with 710 credit scores are being denied. There was a time that anything over 700 was considered a responsible borrower with the ability to repay. 

So maybe this is good? 

No, I don't think it's good. Government always take small problems and turns them into catastrophes.

Subprime lending is predatory in nature.

Yes, we want people with decent enough credit scores to be able to borrow. I just looked it up, the rate of default on loans for people with a 700 credit score or higher is 5%.

Over 750, it's down to 2%.

At 500, it's 87% !!!!!!

The government forced institutions to lend to people who had an 87% chance of defaulting. (and then further saddled those same people with adjustable rate mortgages!) And they did default(shocker) and tanked the industry.

I don't think we can trust government to be any wiser this time. 

The government forced institutions to lend to people who had an 87% chance of defaulting. That's what happened.

..... and for the record. It was DEMOCRATS that did this. 

..... and for the record. It was DEMOCRATS that did this.




No, no, no...................................tommyboy (whatever his new name is) says it was BUSH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

When y'all gonna learn, Bush is responsible for everything. Here Obama has been in office since 2008, even the media laid the housing downfall on Barney Frank (not all the media, but enough)....yet, Bush did it. 

The government forced institutions to lend to people who had an 87% chance of defaulting. That's what happened.

..... and for the record. It was DEMOCRATS that did this. 

Sure, a law passed in 1977 for minorities was the reason for the massive glut of horrible sub prime loans nationwide made between 2004-2007. Okay. Bank executives made those loans because they thought it would make them tons of money. They were wrong. I'll even defend Bush on this. It was the bankers that made these loans.
How many of the numerous Kingwood foreclosures does anyone think were caused by a 1977 law on lending to poor black people?
Here a good read on it: NY Times

Yes it's the NY Times, but this thread is based off of a Washington Post article so I think we're good. 

It was the bankers that made these loans.

You're leaving out this nugget of a fact.

The govt FORCED banks to make these risky loans.

Mr Frank and Mr. Dodd said everything was Okey-Dokey.