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ABOUT ME
- James Austin
- Minneapolis, MN
- I am a 31-year-old graphic designer. This blog contains ramblings and findings from my personal life as well as the occasional industry related topic.
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7 comments:
Well whadya know?!
Very interesting... Let me know if you actually do the homework.
It explains the sub-prime mortgage crisis, why the collapse of Bear Stearns, Freddie Mac and Fannie Mae was so important, and how much the government was involved in creating the crisis.
I also think it's a good example of how liberal social policy can lead to economic disaster, even though the two don't seem to be related. In other words, some liberals thought it would be a nice idea for everyone to own a house, even people who couldn't afford one. They forced banks to lend money to people who would never be able to pay them back. (The banks, in turn, created variable interest rate mortgages to help them recover their projected losses.) The free money caused the housing market to skyrocket, creating more unaffordable housing and more variable-rate mortgages. When interest rates finally started going up, the people who couldn't afford their houses stopped paying. Voila -- economic disaster for the whole world. Of course, the banks are partially to blame, but it never would have happened if the government didn't force banks to lend at a sub-prime rate.
Also I should mention, it wasn't just poor people who couldn't afford their mortages. The middle and upper classes both took a hit when the price of their houses went up. Adding to the problem, now that the bubble has burst, houses that were overpriced when they were purchased are now worth comparatively little. That's real money that is now gone.
Weird but the video is no longer available.
I wish I could see the video...
Apparently the original was pulled by Warner because it used music that was copyrighted.
http://www.youtube.com/watch?v=TxgSubmiGt8
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