History Repeats Itself

How can it be that a scant two years ago the economy was rolling along at a fair pace, and has now collapsed into a morass that economists have to go back to the early eighties to find corresponding numbers of unemployment and financial instability? Forget the high gas prices and the mind-boggling trade treaties that have shipped half of our manufacturing sector overseas. Plain and simple, it was the explosion of the housing bubble, spectacularly flaming down at our feet like the Hindenburg in 1937. Unlike the static spark that might have brought down the behemoth zeppelin, we have a more obvious culprit to our man-made disaster- the greedy, corrupt, mortgage industry.

Thanks in large part to deregulation, a cause championed by the conservative establishment (because it makes them rich), the mortgage industry has been allowed to run amok. This industry has become so greedy and shortsighted in the last decade that we could fill several foreclosed subdivisions with these shysters, and still have need to build more. Net income running a little flat for stockholders? Just come up with a new mortgage ‘product’ that’s adjustable, requires no income verification, and… greatly inflates the value of Joe Schmo’s eighty year-old tin shack.

The horrific irony of our predicament is that just a few years ago the manufactured housing industry was destroyed by the same nefarious game plan. Dozens of mortgage lenders did the exact same thing, and lent money on homes to people they knew would never be able to repay their loans. The result, is a once-thriving industry that provided hard-working Americans with affordable housing, has been driven to its collective knees. Finding a mortgage lender these days for a manufactured home is harder than finding a liberal Democrat in Utah.

Say what you want about the consumer’s culpability in buying in to the American Dream, but these predatory lenders knew that these loans were going to go belly-up. They cared only about one thing, profits, and they wanted their gold and silver right now.