May 4, 2022·edited May 4, 2022Liked by Paul Taylor
Government broke the home mortgage industry with CRA, Freddie & Fannie, below market equilibrium interest rates and excessive business regulations that cause capital to pursue selfish real estate equity returns instead of more inclusive returns from starting and growing a small business… which can and should include building more housing units.
There is no question that these things led to the financial bubble that popped in 2008. However, many if not all of the things that caused the Great Recession meltdown are still in place today. The only thing saving us from another similar bubble and meltdown is that fewer mortgage lenders are participating in the feeding frenzy caused by government… even as they fight with the FDIC and other audit findings that they do not strongly comply with CRA requirements.
I am generally in favor of thoughtful and effective government programs that nudge private business to a particular public policy goal as long as the goal in focused on, and demonstrates results for, improving the human condition without causing significant harm. CRA is better now, and lenders are wiser about it… but it is still resulting in harm and needs significant reform.
Government broke the home mortgage industry with CRA, Freddie & Fannie, below market equilibrium interest rates and excessive business regulations that cause capital to pursue selfish real estate equity returns instead of more inclusive returns from starting and growing a small business… which can and should include building more housing units.
There is no question that these things led to the financial bubble that popped in 2008. However, many if not all of the things that caused the Great Recession meltdown are still in place today. The only thing saving us from another similar bubble and meltdown is that fewer mortgage lenders are participating in the feeding frenzy caused by government… even as they fight with the FDIC and other audit findings that they do not strongly comply with CRA requirements.
I am generally in favor of thoughtful and effective government programs that nudge private business to a particular public policy goal as long as the goal in focused on, and demonstrates results for, improving the human condition without causing significant harm. CRA is better now, and lenders are wiser about it… but it is still resulting in harm and needs significant reform.