Thomas Sowell, and economist and social commentatory, wrote an article explaining the artificially high price of housing in San Fransisco putting the blame squarely on the shoulders of well meaning enviromentalists and anti-sprawl advocates.
Sowell went on to explain that the unintended consequences were that lower income, working class, and some middle income people were priced out of the housing market. He was speaking about police, firemen, teachers, etc. When I visited San Fransisco eight years ago people were talking about it and were rather disgusted with the situation. Perhaps with the burst housing bubble things got better?
Well, Barney Frank still refuses to recognize the unintended consequences of government social engineering and in particular its role in the current financial situation. Zod thinks it is ok too. After all it was all done with good intentions never mind the consequences. If you don’t support it you don’t care.
What they don’t mention is that they created a market that because of easy credit housing prices sky rocketed. They didn’t think the bubble would burst? They didn’t think that low income households were buying houses at the high end of the market prices (bubble) and that they would end upside down on their loans? They didn’t think that they were creating false hope?
Don’t worry about it. Fred and Fran will pick up the tab. After all they are backed by the US Government.
All we have to do is look around to see what those good intentions gave us and the harm that they ultimately did to the people they tried to help (I include Freddie and Frannie because they have ties to Frank as well).
It is not good public policy to force banks to make loans to people that can’t pay them back. It is not good
“public policy to mandate lending for reasons other than the capacity of households to make their payments. “
“The implicit operative philosophy: Our financial system is inherently unfair, and the disenfranchised should, by mandate, be dealt in on whatever terms. “
One can say that banks should not have made the loan. But the fact is the law gave them the incentive to do so — all the more so because such loans in low-income ZIP codes were easily sold to Fannie Mae under pressure from Congress and HUD to meet its “affordable housing goals and subgoals.”
So, instead of helping those who needed help they gave them false hope, ravaged neighborhoods that were on the brink of recovery and now full of foreclosed homes. And you, if you agree with me, are a racist and just don’t care?
Hmmm. I wonder what Barney is doing to help these families and neighborhoods? WIll his brand of social engineering help them now?
Read the whole article here: http://www.investors.com/editorial/editorialcontent.asp?secid=1502&status=article&id=308444032256060
