One of CR's favorite terms is "hoocodanode?"
2005:
"This is not the dotcom situation. . . . Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you're not going to see the collapse that you see when people talk about a bubble. And so those of us, on our committe in particular, will continue to push for homeownership."
Earlier this week during an interview on the Tavis Smiley Show on PBS:
"One of the causes of the terrible crisis we had over the last two years, which has given us today's problem -- it came from people being pushed into buying houses, taking out loans they couldn't afford . . . part of that was a Conservative view that rental housing was a bad thing."
14 comments:
That's part of the problem of a bubble isn't it? We think we are in a bubble but have no way to verify it until it's burst. Many people will claim that we're not in a bubble (and believe it). Otherwise, we wouldn't be in one, no one would be willing to pay the inflated prices.
So he was for home ownership before he was against it.
Very nice post Harriet. If this sort of thing got more exposure, maybe some of these morons wouldn't be re-elected every cycle. (By morons, I mean incumbents, not Democrats).
I think it's natural for all politicians to be pro home ownership. Homeowners have taken a rather large investment in the community which in good ways makes them invested and in bad ways gives a politician quite a bit of leverage over them.
In other words it's easy to move when you're a renter, so if your berg starts to look like Detroit, renters clear out quickly while home owners are at least taking a loss (making them more likely to work to prevent that from occuring) or give the corrupt pols that much more value to take.
ah,
barney frank.
From the first quote, I don't think he understands what the word leverage means... From the second I don't think he grasps that the median income in the US is down near $30-40k that he's saying is insufficient to won a house...
Ah, barney.
I'm not sure I follow where he's contradicting himself.
In the first video he explains why putting your money in a house isn't like putting your money into an untested venture ... like the dot.com stocks. I.e., we know there'll always be a need for housing. We don't know if people will want to buy a specific new and untested product. Hence, while the price of a stock producing a new and untested product can indeed drop to zero if it proves not to be a viable idea. Which is very different from housing where it is a proven product that will always eventually be bought up ... and not discarded like the untested dot.com product.
In the second video he says that not everyone should qualify to be able to buy a house on credit ... something which he says was the Republicans' wish. I'm not sure if that last part is true ... but the rest is his opinion ... and I don't see how it connects with what he's talking about in the first video.
In the first video he's explaining why house prices won't ever collapse to nothing (which is what a bubble means to most of us) and in the other he simply says not everyone is cut out to be a homeowner. I'd say he's correct on both counts.
Lance,
So it's a commodities bubble not a stock bubble, hence it returns to the intrinsic worth of the commodity, or the going price like oil did last summer/fall.
What he got backwards in the first one was that houses unlike people investing in the dot.com stocks is generally leveraged at at least 5 to 1.
The conflict between the two videos is that in the second one he's claiming it was those darn republicans pushing people into home-ownership when he was one of the biggest cheerleaders for it himself.
"The conflict between the two videos is that in the second one he's claiming it was those darn republicans pushing people into home-ownership when he was one of the biggest cheerleaders for it himself."
Cara, I agree. But that still doesn't make the second video be in contradiction with the first video. I.e., You can chose to agree with what he has to say, or not, but he's still not contradicting himself ... even if he is attributing to others that which you and I agree was his position about who advocated facilitating homeownership.
Well, I could have bought a dotcom stock on 50% margin -- no less.
An FHA loan is 3% down. And even less was required in the good old days.
Which is more leverage?
And which fallout was more devastating to the national and global economy?
And which wiped out more families? (And then some . . . considering debts still owed on 2nd mortgages and credit cards).
And which is going to cause more distress to our children?
And where's the contrition?
Cara,
Oil didn't go to zero, so there was no commodity bubble. For that matter, tulips still cost $4 at Giant, so no bubble there either.
"In the first video he's explaining why house prices won't ever collapse to nothing (which is what a bubble means to most of us)"
Who exactly do you think you are speaking for when you say "most of us?"
Because that is absolutely is not and never has been the definition of the word "bubble."
Why do you single out Barney Frank in your blame and ridicule? There are plenty of examples of the leadership class - including President Bush - who had pushed for home ownership for people who were not qualified to get traditional loans.
I enjoy reading this blog and I think I have learned from it (I am not a realtor and definitely not an expert by any means so I visit this blog to increase my knowledge of the housing situation.) However, I have to wonder why Barney Frank seems to be a scapegoat here.
"However, I have to wonder why Barney Frank seems to be a scapegoat here."
Barney's raging hypocrisy makes him a fun, easy target. Plus he's the new "leadership" (loosely applied) class.
Million, I'm not sure what you mean by the "new leadership" class. Barney Frank has been in congress for a million years. I also believe that he supported legislation to restrict subprime mortgages a while ago.
He's against banks charging higher rates to compensate for loaning to higher credit risks? It all makes sense now.
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