Posted by
Always To The Right on Wednesday, October 14, 2009 12:15:58 AM
Magic Numbers in Politics
When government meddles in a market economy, it
tends to do so with no regard for the repercussions.
Our current economic meltdown results from the federal
government — under both Democrats and Republicans — declaring home
ownership to be a “good thing”
and treating the percentage of families who own their own home as if it
was some sort of magic number that had to be kept growing — without
regard to the repercussions on other thing
How did we get from home ownership to 15 million
unemployed Americans? By ignoring the fact that there was a reason why
only 64 percent of families owned their own home. More people would
have liked to be homeowners, but did not qualify for loans under the
mortgage-lending standards that had been in place for decades.
Politicians
to the rescue: Federal regulatory agencies leaned on banks to lend to
people they were not lending to before — or else. The “or else” included
not having their business decisions approved by the regulators, which
could cost them more money than making risky loans.
Mortgage-lending
standards were lowered, in order to raise the magic number of home
ownership. But, with lower lending standards, there were — surprise! —
more mortgage-payment delinquencies, defaults, and foreclosures.