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Politics : Politics for Pros- moderated

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To: KLP who wrote (255586)	6/25/2008 7:20:19 AM
From: alanrs	Read Replies (1) of 793939

I've been thinking about this in my normal fuzzy manner. It strikes me that the beginning of the housing mess is government frowning on 'red lining'. Once it became illegal or at least problematic to NOT lend to people not qualified, it's rational that the banks would find a way to lend in a politically correct manner without putting themselves out of business. I give them credit for coming up with a mechanism (collateralization) that seemed to protect themselves from bad loans while they made these loans with some version of a gun at their heads. Unfortunately, once the mechanism was in place it became wildly popular and here we are today. What I'm saying is that government is complicit in this mess right from the start, which helps explain why government is trying to fix what otherwise might be viewed more as a market problem. I can see Angello Mozillo arguing with his congressional allies (all parties) that he only got in this mess because they insisted. Not to diminish the greed and stupidity aspects of the whole thing. Anyway... ARS

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