Subprime Suspects

I read the Krauthammer article cited, and he did not "blame the poor". He blamed the government which pressured banks into loosening their lending standards, in order to help the poor buy houses (and help the politicians buy votes). This is not the same thing as "blaming the poor".

Surely this is a plausible thesis. Public discourse is not served by Mr Gross' making such a Gross mischaracterization of Krauthammer's argument.

And excuuuse me for being one of those ignoramuses who does not read the entire Wall Street Journal, large portions of which seem to be nothing but numerical tables.

It's amazing to me that shows such as "Flip that House" can still be on the air and in the same breath Wall Street blames the housing problems on the poor! The sub prime mess was caused by greed and the poor do not have a corner on that market.

By the way this guy doesn't have his Phd in economics, oh wait he had degrees in government and history, lets believe him.

thank you, thank you, thank you for this article; i too received this viral email forwarded to me, blaming those awful democrats for causing the hard earned money of good white people having to be used because they encouraged and made possible unworthy black and brown families moving into "true american" white neighborhoods.

I'm sure this guy has his Phd in economics. Where does newsweek get these people. I don't think any of his facts are true and this is shotty journalism at best. Then again americans are dumb enough to not search out what really caused this problem because they are too concerned with their favorite tv shows and sporting events. We will reap what we sow, including more taxes.

Well, I'm not in foreclosure or anything but I am struggling. Why? My mortgage payment is certainly affordable at $660/mo-and it was affordable when I got it. What NOT affordable is the fact that, within the past 4 months, my home heating bill went from $158/mo to $311, we are paying ridiculous amounts of $ for gasoline, the evil empire of Comcast raised rates, food prices are through the roof and I work in real estate where I haven't had a raise in 2 years-plus I got sick in May and had $35,000 in hospital bills-I am not a deadbeat, I pay my bills, my mortgage, my property taxes and my income taxes, but I've had to cut many things out-I got rid of cable, went to DSL at $20/mo, got rid of my TV, cancelled my life insurance policy (there's no one to leave anything to so why bother), I don't eat out, I don't even leave my house because I can't afford to use the gas I need to get to work, and I'm looking for a 2nd job. Do NOT blame me for this mess-I'm just trying to keep up with all the SH-T that gets thrown my way-on the same income I had two years ago.

Posted By: the_shelton @ 10/08/2008 10:46:35 AM
As for regulation, when are they going to regulate greed and stupidity.

When we vote out the stupid Congressman and Senators who allowed this to happen

Thank you for this article, it is about time someone started saying this, as a minority, they way it has been spun to make it black brown and poor peoples faults is disgusting.
The implosion of the home market was fueld by real estate speculators and investors. And I know a lot of non sub prime borrowers who took out sub prime loans to have a low monthly payment with the hopes of refinancing before the rate reset, but unfortunately they couldn't. People came to believe that real estate was a given investment, not a risk like everything else.

I have no respect whatsoever to anyone pointing, peddling, patronizing and/or supporting the STUPID bypartisanship mentality, that split this country into 3 countries in one. The republicans country, the democrats country, and the silent majority. this current administration and congress exacerbated this divide. Screw your heads on straight, this country is in dire straits. We need to think as Americans. Feuding brings miseries and roman empires. We need a third party to act as referee to these 2 groups of stooges in congress and governement. a balance of powers. it's only natural. You keep two groups in charge and you have monopolies. The FTC itself does not allow corporate monopolies. increasing competition makes better ways to govern.

Posted By: lovelee @ 10/08/2008 10:27:33 AM
Comment: Oh, I finally get the economic crisis ??? I had it wrong all the time! It has nothing to do with scumbag lenders preying on people they knew they could manipulate and shame and finally foreclose on if they didn???t pay, It had NOTHING to do with our overspending in Iraq. It didn???t even have anything to do with building an ENTIRE economy on credit instead of tangible wealth. It was all about my skin color this whole time. Gosh Fox Business Channel, I???m so sorry I was born brown, I didn???t mean to cause the economy to collapse! BTW Fox Business Channel, I make ALL my payments on time.
lovely if you think it was only the lenders then you are niave, there were many people who chose to buy over their means whether for ego or stupidity but never the less were determined to buy what they wanted and wouldn't stop till someone said yes. There were shady ( I prefer that term since this is a G-rated site) lenders that did prey on some buyers and they should not be excused but there were just as many people who bought houses they shouldn't have bought and got in over their heads but of course now they want to blame the lenders for not telling them their McMansions could go down in value before they were able to refinance. Oh no there were ALOT of people who drank the juice wanted the dream and knew it all and nobody was going to tell them otherwise.

copper454 you are so right

The author of this article is clearly playing the race card.

Nowhere did these supposedly "right-wing" articles blame "poor & minorities". The blamed GOVERNMENT POLICIES that require certain types of lending.

That's a debatable matter, certainly. Sadly, such a debate wouldn't be as "spicy" as accusations of racism, so the author goes the wrong route.

nwcomment these houses gained in value simply by the laws of supply and demand, with xo many people having the ability to buy (either within or above their means) bidding wars erupted and ans as houses sold for more values rose. I paid $126000.00 for my house in 1996 it was well worth the price good neighborhood good schools.etc... as the market went off the deep end the value of the house went as high as the upper $360000-$370000 because of the demand to buy in my neighborhood. I wouldn't have paid that but that was what I could have gotten, even with the market in a down spin I can still get around $300000 is the house any different ( not really) but the market demand still is and the ability to get a mortgage in that range is still easier and rates are still lower. When I bought rates were 8.75% ( when I bought my last house in 89 rates were 14.75%) I have since refinanced down to 4.625% but I could have bought a lot more house 4 years ago and probably paid the same per month I was paying when I bought my house.

This article is a smoke screen. Its a complicated issue and Gross is giving half truths to save liberalism. Nobody is blaming the poor. What we are blaming are the Democrats that set up this whole ponzy scheme (Community Reinvestment Act, Freddy, Fanny, guaranteed loan instruments etc.). They were clearly the intellectual authors of this whole story.

I'm not trying to say that individual poor, minority, rich, or tall people didn't have some guilt. But, again, your primary culprit are the Democrats who always want to screw with market incentives and then act incredulous when the whole thing comes tumbling down.

P.S. Well, I have to blame the American people as well (don't worry I'm in there too.) We ALL knew what was going on in the housing market. We KNOW there is no free lunch. Personally, I just thought that all those people rolling the dice would just have to pay if the dice came up snake eyes. What I didn't realize is that it would be ME (and you!) that would have to underwrite all those stupid loans.

Oh, I finally get the economic crisis ??? I had it wrong all the time! It has nothing to do with scumbag lenders preying on people they knew they could manipulate and shame and finally foreclose on if they didn???t pay, It had NOTHING to do with our overspending in Iraq. It didn???t even have anything to do with building an ENTIRE economy on credit instead of tangible wealth. It was all about my skin color this whole time. Gosh Fox news, I???m so sorry I was born brown, I didn???t mean to cause the economy to collapse! BTW Fox Business Channel, I make ALL my payments on time.

I'm glad somebody else sees this. I think one of the larger culprits is the Adjustable Rate Mortgage. These things were designed solely to make more money for the mortgage broker - who doesn't care one way or another if the borrower defaults a year later; he's already made his money. Mortgage brokers know from the outset how likely a default is, but they go ahead and make the loan knowing that they can stick it in with some "A" paper and resell it to some other sap. Another factor are the ridiculously high appraisals given to houses. It's almost a collusion among developers/contractors, appraisers, and mortgage brokers who must continuously, and artificially, increase home prices in order to make another sale and another equity loan. It's idiotic. Houses that are now appraised at $200,000, or more, are realistically only worth about $40,000. I'd sure like somebody to explain to me how these tract-built, identical boxes gained so much value. I am neither poor nor minority, but blaming this group for our current problems is absolutely the wrong track. You don't have to look any farther than the banking and mortgage industry to find the dishonesty and greed that resulted in this disaster.