Saturday, March 17, 2012

Thank you, Phil Gramm

Why don't more TV journalists address the ways that federal government actions and the GSEs impacted our housing markets?

While watching Bloomberg TV last month, I witnessed former U.S. Senator Phil Gramm discuss the housing meltdown, as well as, his own work to deregulate the banks.  The interview lasts about eight and a half minutes, with the point behind this post examined in the last two and half minutes. 

Phil Gramm, Wikipedia
Mr. Gramm highlights "concerted government action and pressure on banks" to make sub prime loans and destructive decisions in Washington "to force feed housing" ownership.

The Bloomberg interviewer (predictably) insinuates that there were as many predatory lenders as borrowers. 

Gramm then asserted that for every sub prime borrower who truly got swindled, there were "one hundred" that exploited the system, i.e. predatory borrowers.  There's the debate, Mate.

I thought I coined the term, "predatory borrower" but I discovered that Mr. Gramm was using it before me, perhaps in response to others blaming him for the housing meltdown.  Millions of borrowers bought properties they couldn't afford.  How much scrutiny did the Barney Frank types that perpetuated irresponsible lending requirements on the banking industry have to endure? 

If you don't have time for the whole interview, consider moving the needle to the six minute mark.