[MCN] Missoulian's 3 articles on housing in today's issue
lance at wildrockies.org
Sun Sep 4 12:06:24 EDT 2016
Housing in America
Nightmare on Main Street
America's housing system was at the centre of the last crisis. It has
still not been properly reformed
WHAT are the most dysfunctional parts of the global financial system?
China's banking industry, you might say, with its great wall of bad
debts and state-sponsored cronyism. Or the euro zone's taped-together
single currency, which stretches across 19 different countries, each
with its own debts and frail financial firms. Both are worrying. But
if sheer size is your yardstick, nothing beats America's housing
The slab of mortgage debt lurking beneath it is the planet's biggest
concentration of financial risk.
Faced with this gigantic muddle, many politicians and regulators just
shrug. The system is mad, but the thicket of rules and vigilant
regulators will prevent crazy lending from taking place, they argue.
That seems wildly optimistic. Because housing is seen as one of the
few ways in which less-well-off Americans can accumulate wealth,
there is an inbuilt political pressure to loosen lending standards.
As a result, housing crises are a recurring feature of American life.
Before the subprime debacle in 2008-10, there was the
savings-and-loans fiasco in the 1980s.
It is no surprise that Congress has shirked its duty. But until
America's mortgage monster is brought to heel, the task of making
finance safer will remain only half-done.
"The gap between high- and low-income families has widened steadily
since about 1980, hitting a new high every year since 1985. "
Business Week, November 21, 1994, p. 72.
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