Posted by
Always To The Right on Sunday, November 22, 2009 3:13:02 AM
IBD today begins excerpts from Sowell’s latest book, The Housing Boom and Bust, a chronicle of the biggest economic disaster of our time.
We are doing so because causes of that debacle still aren’t understood
and because many of the same mistakes are being made now — in some
cases by the same politicians — in efforts to overhaul America’s
medical and financial systems.
Part 1
Thomas Sowell On The Housing Bust
The new and risky methods of financing home purchases that rose to
dominance in the early years of the 21st century could not have
replaced more traditional rules and standards for granting mortgage
loans unless those who regulated banks and other lending institutions
had agreed to such changes.
In
reality, government agencies not only approved the more lax standards
for mortgage loan applicants, government officials were in fact the
driving force behind the loosening of mortgage loan requirements.
Read More
Part 2
How Little Law From '70s Brought The Financial System To Its Knees
In recent times, government officials have increasingly pressured banks
and other lenders to lend to people whom they would not lend to
otherwise.
One
of the first federal government efforts to change the process of
mortgage lending by private financial institutions was the Community
Reinvestment Act of 1977. Like many government policies or programs, it
began small and grew in scope and severity over the years.
Read More