Fannie, Freddie and our flawed ‘Ownership Society’

August 9, 2013

More than four years ago, President Obama assumed office promising dramatic reform to the housing market. After all, it was the housing market that triggered the financial crisis, and the vast proliferation of low-quality loans that had fueled the housing bubble. But politics delayed those reforms, and now the president is reopening the issue with a call to wind down the two main federal mortgage agencies, Fannie Mae and Freddie Mac. “For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag,” the president said this week. “It was ‘heads we win, tails you lose.’”

Well, not entirely. The U.S. government and taxpayers did rescue these agencies in 2009 (to the tune of nearly $200 billion), and, after injecting them with capital and essentially nationalizing them, these companies started to turn a profit as the housing market slowly recovered. This month, they contributed more than $15 billion to the U.S. Treasury, and have been one factor in sharply reducing government deficits.

Even more, Obama’s targeting of Fannie and Freddie is part of a larger narrative — on both the left and the right — that banks and government colluded to produce the financial crisis and the continuing drag on the United States. To be fair, Obama in the same speech this week acknowledged that much of the housing crisis was the product of “banks and the government…[making] everyone feel like they had to own a home, even if they weren’t ready and didn’t have the payment.” But that chord is a decidedly minor one in a general atmosphere of blame.

Over the past decade, we have collectively spun a story of the financial crisis. It goes something like this: in the 2000s, government regulation of the financial system loosened as large banks, in collusion with free-market ideologues in government, convinced regulators that risk was a thing of the past. They then took advantage of easy money and lax regulation and began to push mortgages to speculators and low-credit individuals, who bought homes they couldn’t afford. Those mortgages were then packaged and used as the fodder for financial derivatives, which turned bad loans into a global crisis. Meanwhile, millions of people lost homes and jobs; the government spent hundreds of billions to bail out the banks, and those millions of citizens were left with shattered credit, no employment, and fractured communities such as Detroit.

There is much that is true in this story. Its basic contours were repeated this week in the Justice Department case against Bank of America over lax lending practices in 2008. And Fannie and Freddie, independent agencies backed by the government, were the linchpins, buying up those mortgages and providing a seemingly endless backstop.

What’s missing from the story is crucial, however. Obama alluded to it in his speech, but he buried the details. Often neglected is the degree to which so many felt that they needed to own a home. That wasn’t created by banks and government, even though it was encouraged. The “ownership society” had been touted not just by President Bush in the 2000s, but by Clinton, Reagan, and by Americans of all parties and ideologies since the founding of the republic. There is nothing more “Jeffersonian” than owning your own land and home (and slaves…but that is another issue). The United States pulled immigrants in part because of the availability of land and the promise of independence that owning land afforded. Freed slaves after the Civil War were promised — though not actually granted — “40 acres and a mule” because having land was seen as a necessary component to liberty and freedom.

After World War II, agencies such as the Federal Housing Administration along with other New Deal creations such as Fannie Mae (the Federal National Mortgage Association) spurred more widespread home ownership, with returning GIs both swarming into colleges and then into vast new housing developments in the suburbs. Freddie Mac (the Federal Home Loan Mortgage Corporation), founded in 1970, was meant to augment that process with even more quasi-government intervention in the mortgage market, with the goal of reducing the risk local banks might incur in making new home loans.

These programs then combined with banks to produce the increase in home ownership, from 62 percent in the 1950s to almost 70 percent in the 2000s. The programs worked not because the docile masses were convinced to own homes but because the drive to have a home is deeply embedded in American culture (and many other cultures as well). Government and banks facilitated the realization of these desires, but it is beyond a stretch to claim that they created those desires. They stoked them, and often took advantage of them, but they did not implant and create them.

That part of the story is sadly, thought understandably, overlooked and underplayed. Targeting government ineptitude and Wall Street greed is a far better sell politically, and a better sell for the media, than speaking of collective responsibility for our dreams trumping our means. Aiming for a home, holding that as a goal, and living in a society that allows for the potential to meet it are powerful and productive fuels. But succumbing to the easy lure of a promise too good to be true, which was what many of those mortgages in the 2000s were, required multiple breakdowns, one of which is individual desire clouding judgment.

The easy story of what happened over the past years is now in danger of becoming a set “truth.” It is so often repeated that it often goes unquestioned. But while that story has much to offer, it entirely elides how our individual desires, combined with a long history driving us toward the supreme value of owning a home, were vital ingredients in our recent fate. That story also infantilizes “the American people” by suggesting that so many of us were dupes and rubes, easily manipulated by government and business into making bad choices.

Blaming venal banks and inept government will not transform our system, however satisfying it may feel. Shuttering Fannie and Freddie will not force a shift in people’s desires, though it will make it harder for banks to prey on those desires. Ending the government guarantee of mortgages via these agencies will lead to tighter credit standards, and hence less access to credit for those less well-off. That may be for the best, but it is hard to see that not generating backlash. Rather than unwinding these agencies, we should focus on those lending standards, and when they should be relaxed and when not.

Overall, we would be better served by understanding that many of the struggles of recent years stem from a mismatch between what we dream of and what this system is currently able to provide. Some of the gap is due to bad regulation, Wall Street greed, and speculation. Much of it, however, is due to a radical change in our economies that has upended 20th century industries and jobs and continues to do so. Responding to that change and recalibrating our expectations without giving up our dreams — that is where our focus should be, and must be.


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“Overall…many of the struggles of recent years stem from a mismatch between what we dream of and what this system is currently able to provide.” It can similarly be said that overall much of America’s imbalance between existing tax revenue (as generated by annual economic activity) and Congress’s inability or unwillingness to prioritize expenditures stems from this exact same mismatch. The inevitable result is a national deficit of frightening size when historical policy is considered.

“Some of [the above] is due to bad regulation, Wall Street greed, and speculation.” And that part can be addressed if we are willing to seek out and banish the incompetent, the illegal and the immoral who are at fault. Each should be held fully accountable without exception.

“Much of it, however, is due to a radical change in our economies that has upended 20th century industries and jobs and continues to do so. Responding to that change…is where our focus should be, and must be.” I have been explaining for months on this forum that inexpensive computer/software availability and implementation such as “just-in-time” production shipped directly to points of sale have eliminated countless warehouses as well as an incredible amount of unnecessary inventory, loading and unloading.

It has steadily doubles, triples and quadrupled blue collar and white collar productivity. Everywhere except in government it takes ever less people to do that which our society requires. Government is an alternate universe where staff size equates to bureaucratic success and increasing budget allocation.

Since the 1980’s, the need for millions and millions of Girls Friday, Secretaries, Administrative Assistants, stock clerks, bookkeepers, draftsman, designers, Project Coordinators, and the like…all good-paying middle class jobs with a “future” has incrementally disappeared. Not “offshored”. Not “outsourced”. Just GONE. FOREVER!

“…recalibrating our expectations…” is an intrinsic part of any solution. Americans may well find that some of our treasured dreams are no longer choices available (sustainable by our economy in the long term).

The bounty of options and opportunities that followed WW II is no more, and the economics that underwrote it unrepeatable history. Denial is not a strategy.

Posted by OneOfTheSheep | Report as abusive

Excellent article Mr. Karabell. And @OOTS again adds to the story. Not only are jobs disappearing faster than donuts in a police station, but so are the worlds resources. Our population has grown almost exponentially and the “3rd world” is no longer that. They are now “emerging economies” with televisions, smart phones, and automobiles in ever increasing numbers. The world cannot raise 7 billion people to the social/economic level that that the advanced nations have. We must find new ways to do so. First we must begin using the same physiological tools that the author mentioned above to change the next generations expectations. Not to diminish, but to modify. Encourage education, reduce family size in emerging nations (see Hans Rosling’s TED talk: ows_the_best_stats_you_ve_ever_seen.html  ). Single family suburban home ownership and sprawl MUST become a thing of the past. We simply cannot afford nor sustain it any longer. New urban strategies can still contain ownership, much like the townhouse and older condo communities. We must start though with the phycology. Change the American dream to reflect the 21st century global society.

Posted by tmc | Report as abusive

If we’re going to expand the narrative, let’s point out what is largely being denied: Most people who live in homes are paying mortgages to the financial system where the banks and investors OWN these homes. Try not paying the mortgage and it becomes obvious who actually owns most homes.
This article is excellent in portraying part of the truth relative to subprime being the culprit. Here’s a few more key issues left out:
— Most of the low-doc/no-doc “liars” loans were not subprime and much of the fraud was perpetrated by Countrywide (biggest mortgage originator and servicer than all the rest put together) brokers, greedy for commissions.

— Also left out was the fact that the Collateralized-Debt Obligations (CDOs) were based on phony evaluations of risk.
— Probably key to the success of this whole financial house-of-cards were the three major credit-rating agencies, Moody’s, Standard & Poor’s and Fitch providing triple-A ratings for toxic crap, unlocking the vaults of pension funds and other big-money investors who were limited to investing in ultra super-safe AAA investment vehicles.
— All of the junk financial derivatives were backed by Credit Defaut Swaps (CDSs), phony insurance with no backing.
* * * * * *
As the author says these are the details, but not the drivers. The people who believe in the American Dream best expressed in Frank Capra’s “It’s a Wonderful Life” have been taken advantage of by a class of people, the Potter’s of this world, who demand high returns from their investment’s, turning the whole mortgage supply chain into an operation focused on the Wall Street Casinos – a gambling operation, pure and simple backed by the federal government. The Plutocracy, the One Percenters, received their high returns and still are.

Ownership?: Who profits most from this whole mortgage mess – “homeowners” (in your dreams) or the superrich gamblers supported by the federal government?

Another myth busted: Homeownership in the United States is no higher than other countries that do not have government subsidies.

Posted by ptiffany | Report as abusive

Karabell is right about ‘we should focus on those lending standards’ etc. Of course he misses entirely the evisceration of regulators. 60 Minutes reports that one of the most important agencies (that should have been) regulating Wall St. was reduced to one – ONE – inspector during the early 00’s. This was due to lack of funding (by the GOP if you must know) and the laissez-faire philosophy born of the W. administration. In other words, the continuing deregulation will solve everything/self-regulation mantra that the right never ceases to regurgitate was highly complicit in what should be called ‘the crash.’

Here is another soft sell apologist for the banking industry and Wall St. boys. “These desires” facilitated by banks and government DID NOT cause the financial
crisis. Stop regurgitating that LIE. The banks and Fannie and Freddie were factors but Wall St. schemes and ratings agencies caused the cancer to spread from the bankers (who knew exactly who would cover them), eliminating 401k’s and wreaking havoc with pension funds when the chips could not be covered. Plenty of folks saw it coming but by then it was too late. Tell you what, ask yourself which party espouses business interests above all others?

I also agree wholeheartedly with puffany: the credit rating agencies were a major factor in the meltdown. Could not have happened to the degree that it did, without their involvement. Just another blatant example of morals and quality going out the window to be replaced by greed. I sometimes wonder if it’s a generational thing, ‘class’ retires and young yuppies, since the 80’s mind you, now have one thing on their minds. And know they can get away with alot thanks to a certain political strain and it’s progeny.

I completely agree with his/her paragraph re: Capra and Plutocracy and what follows. Our reality follows our politics. Blaming Obama is utterly ridiculous. This is a systemic failure and no solution will be forthcoming.

If you want a country that protects the social contract, and I do not mean via outlays but rather by moderating the practices of industry with steady regulation, the only solution is emmigration.

We would be better served by understanding a mismatch between consumer dreams and ‘this system.’ ‘Some of the gap is due to bad regulation, Wall Street greed, and speculation\'; – You bet your @ss pal.

But please save your “upended 20th century industries and jobs” and we must “recalibrate our expectations” hogwash for the weak-minded partisans. Our troubles are due, in part, to that of which you speak, but the Recession was caused by the crash. AFTER, the domino effect of reduced demand imploded our economy. It wasn’t all because X number of bumblers bought a house they couldn’t afford or over extended themselves off their mirage like equity. It was because government is in bed with vested interests and the tweaks thus far show no signs of correcting the problem. Hence, people more in the know than yourself correctly predict that at some point another meltdown will occur. It’s just a matter of time.

I’m sick of these tissue-paper hacks telling us W. was a great president of that the right’s agenda will ‘fix’ what ails us. It’s bankrupt and so are we.

Posted by Mac20nine | Report as abusive

Jesus said “The poor will be with you always”. We tried to legislate that away. Hubris, and we will pay for many years because of it. Still, an ownership society is not a bad thing, and if on the 250th anniversary of the U.S. we have have increased home ownership to 75% it will probably be good for everyone. FHA has housed a great many Americans successfully. It would be sad to see the success buried due to Congressional and Presidential venality.

Posted by ARJTurgot2 | Report as abusive

Fannie and Freddie were doing fine until Barney Frank and Alan GreenSpan fronted and forced them to change. Yes, many others were involved but they were the public faces. Should they continue or be destroyed? I’m sure wall street would like to see them leave the playing field. I think they should stay with a new mission. Instead of supporting single family homes they should support multi-family (4-50) dwellings. I think I’ve seen statement to that effect by officials already too. If they are abolished I fear that only a small group of the plutocrats will eventually own the majority of our housing. Fannie and Freddie can help more investors get a piece of the pie.

Posted by tmc | Report as abusive

What is lost in the conversation is that the original concept of home ownership did not envision a 30 mortgage and re-financing in order to spend more money on toys and vacations. The issue is debt and the inability of Americans to have the will power to save money before buying something. I have had two mortgages in my life. Because of career changes, I have had to move from those homes, but I worked hard to pay down that debt and saved my money. I now own my home – clear and free of any loan. Best thing I ever did and I refute much of what this article implies about home ownership. It is a very good thing, but people need to be wise about how much house they need and how it gets purchased, i.e. stay within your financial limitations and work hard to eliminate the debt ASAP. This concept was not lost upon those who lived through the Depression, but most of those who are younger can’t control their desires and waste enormous amounts of their hard earned cash on frivolous “stuff”. Home ownership combined with freedom from debt is one of most empowering combinations you can experience. But don’t expect that to happen if you want a 4000 sf McMansion (and a new $35k car every 3 years)on a middle class salary – you will be in debt forever.

Posted by AuAgExpl | Report as abusive

@AuAgExpl, I to own my own home. I had low 30 year mortgage payments, but paid off the house in 14.5 years. I saved a ton of money. But I realize that only a small fraction of the population could do what I did. For many reasons too. Yes, discipline is one of them. Most just plain will never be able to rise high enough in pay to ever be able to afford a single family home. I don’t blame them for this. It’s how humanity is. All men are NOT created equal. That doesn’t mean we get to subjugate those less fortunate, nor chastise them for being what they are. Instead, those of us blessed with higher intelligence, abilities, and disciplines, should help assist those that don’t. Considering that we are out numbered by them by like 10,000 to one, it seems prudent too. So, instead of blaming people for not being able to save, then letting corporate America and the government make it impossible to do so, we should change the system so people have the tools to save with, use phycology not to sell more to them but to encourage them to conserve, and provide realistic goals that the majority can obtain without taking and subjugating from others. Though we both obtained the dream of owning our own homes, I blame the ones that did and didn’t help other too, instead of blaming those that couldn’t for themselves. I am not a Christian, but boy I wish there were more of them.

Posted by tmc | Report as abusive

So all us working class people who either can’t get jobs, or deal with stagnant wages in an era of rising costs just have to accept that we will never own homes? I agree that reforming the housing market is not enough, but I am offended that your answer is to just deal with it. Maybe instead you could say something about reforming neo-liberal policies. Or if you believe in theory over reality you could talk about more stimulus, or tax cuts for the wealthy. The road to mediocrity is paved with the phrase, just deal with it. This is America, we used to be committed to doing better.

Posted by agsocrates | Report as abusive

I did not say “just deal with it”, nor that you cannot own your own home. Just that having a dream of a suburban single family home with the proverbial white picket fence is outdated and should be replaced with a dream of having a good home available. People own apartment you know. If owning one requires you to be locked into one place for 30 years, then perhaps ownership, or the “mobile workforce”, should be reconsidered. The cost of those suburban homes continues to rise, putting the dream further and further away from more and more families. The cost to society is growing even faster. Consider if we somehow made a single family home on just 1/4 acre available to half the population, how much copper would be required? Paved roadways? How far would they be from work? Now add that India, China, Brazil and the rest of the world are trying to do the same thing? If you haven’t noticed, social changes are occurring at an exponentially fast rate. Just 40 years ago we western nations were talking about opening up the Chinese markets. Now they are the number two economy and will surpass us in very short order. And they did it without WWII. So I guess I was wrong, I am say “Just deal with it”. We can no longer hold the world at bay and live the Us vs. Them American dream. It MUST change and soon. Fannie and Freddie can be tools to help move our nation forward and keep up with the world and indeed lead it, or we can stick our heads in the sand and try to keep things the way they are. But I’m betting it won’t work.

Posted by tmc | Report as abusive

It’s Paul Tiffany, offspring of the Tiffany’s of Tiffany & Co. The female first name of Tiffany largely derived from the movie “Breakfast at Tiffany’s”. Then, Tiffany & Co. was bought out by Avon more than 40 years ago, nearly running it into the ground, then later bought again by some Avon execs who used the old Tiffany business model to return to profitability.

What’s the point? I’m intimately familiar with one of the many tactics that the One Percenters use to turn our relatively capitalist system into crony capitalism that isn’t capitalism at all, but a system that supports the Plutocracy. While they tout one of the pillars of The American Dream – home “ownership”, but actually owned by them – they’ve created a system to get the government to invest in mortages through the mortgage interest deduction, then send the profits onto the banking system and it’s rich investors. Ten percent returns weren’t enough, so the mortgage-supply chain was converted into a massive, worldwide gambling operation again backed by the federal government. The Wall Street Casinos are now bigger and more powerful than ever as the Dud-Frank Bill is debated endlessly, never to be funded.

THE PLUTOCRACY RULES ! Wall Street (and its bankers) is occupied by the One Percenters. Just deal with it.

Posted by ptiffany | Report as abusive

I paid a mortgage on a 4800 sf mansion in the middle of Bel-Air Estates for almost twenty years. It was great that we could deduct most of our mortgage payments from our income taxes since most of them were interest payments. This amounted to a subsidy by the federal and state governments to the tune of about $80,000 per year. It was so great to be a Member of the One Percenters Club. (The Bel-Air Country Club was right down the street!)

The mortgage interest deduction is the largest of all of the government subsidies (boondoggles?), playing off the false concept that it has increased the rate of home “ownership”, even though this rate is no better than other countries without it.

Furthermore, there has been a growing trend over the past two decades that encourages a transient labor force, one not mired down by 30-year mortgages. Then, the average “homeowner” in the United States lives in their home about three years, not able to pay off their mortgages, but collecting on the mortgage interest deduction while those in the mortgage supply chain reap humongous profits. Then, the explosion of home equity loans based on highly inflated appraisals in a housing market that will never see declines in prices (that was the story), has provided an enormous stimulus to the consumer economy at least for half a century until now.

Posted by ptiffany | Report as abusive

Everywhere we see: something has to be changed for the better of We The People. What is the common for all these ideas? It looks to me that somebody has to do it. Guess who? They (if you guessed right) know what has to be done for the better of us – but they obviously do not want to do it. When we choose them, they do not promise anything substantial, they just use proven pattern of wording and we are left to the next free choice in a future. If things stay that way, the main subject to be discussed has to be – how to convince/force them to do what is usually obvious for us.

Posted by Pred | Report as abusive

The deep cause is the federal mortgage interest writeoff, combined with federal creation and backing of 30 year home loans. This is a government created crisis. Raising all real estate prices only benefits realtors, who get a commission on a percent of the gross. It does not make homes more affordable, it just raises prices. No different than providing a bottomless pit of federal money to subsidize student loans. Free money raises prices.

And it forces the real estate market to be more volatile and subject to the boom/bust cycle, which destroys the financial safety net for everyone. I don’t want my home to be a gamble like the stock market, but thanks to the feds and the realtors, it is.

Posted by indiawhite | Report as abusive

Aren’t we forgetting a key element here? What I’m referring to is the tremendous influence of an advertising industry that powerfully shapes our wants and expectations. In addition to advertising is the entertainment industry where every “normal” person is portrayed as fashionable, living in a beautifully furnished house, driving fancy new cars, having plenty of the latest phone gadgets and plenty of plastic for those fancy restaurants and resorts. Between advertising and the entertainment media, of course everybody expects to have all this stuff and the level of credit card, mortgages and other personal debt certainly indicates that to me.
Until schools and other institutions do something to counter the pernicious influence of advertising and show it for the unrealistic thing it is, I can’t see how people will ever accept the fact that they can’t “have it all” and go back to living within their means.

Posted by geojohn | Report as abusive

I don’t agree with this article, and it shares a similar theme as your last one where you suggest people just have to lower their expectations, rather than trying to fix a perceived flaw in our current system.

Dealing with this article only though, you suggest the US’s problems lie in aiming for high home ownership rates. However just a quick glance at the figures suggests the US doesn’t, and never (in modern times at least) had particularly good home ownership rates. ntries_by_home_ownership_rate
Okay, the fact that the US figure is from 2012, while many of the others are from 2002 is a little odd, but looking at data from the same period backs up that the US does not have particularly high home ownership rates compared to the rest of the world. ip_in_the_United_States

I don’t think it’s reasonable to blame the problems in the US as being a result of chasing home ownership, if they never actually got high home ownership rates. Plenty of others, with both stable and shoddy economies, have much higher home ownership rates. Your article rightly points out many bad policies in attempting to implement the dream of home ownership, but these are just dodgy policies, it doesn’t make the goal wrong. If I use a chainsaw to cut my toenails, then accidentally cut my leg off, I wasn’t wrong for trying to cut my toenails.

I don’t think people should abandon the idea of home ownership, decent work, stable finances, good health, etc. These are good goals to aim for, just don’t pursue them recklessly and at the expense of other important aspects, e.g. buying that home if you can’t actually afford it.

Personally I think this kind of “everyone should lower their expectations” attitude is what has lead to such long working hours and stagnant pay, for such an increase in productivity over the past few decades. In my view, this has led to the current problems we have, with high inequality, the majority consumers not having the wealth to fund the economy, while the rich minority, who can do nothing but store up their enormous wealth, find increasingly far-fetched and convoluted vehicles to save their money. Only natural then that the working poor, dismissive of the fact their wages have stagnated, borrow money for their living costs, while the wealthy, looking for something to invest in, are happy to lend.

Posted by K.MacKenzie | Report as abusive

I believe the reason that government encouraged land and home ownership was, and reamins, in large part, due to the idea that people who put down roots in a place are more likely to abide by the laws and be responsible citizens, and build a good community. I think (though I won’t swear) that statistics may show that crime is much higher among apartment and other renters in general, than among home owners. The correlation may be misleading, of course, since those who rent either haven’t been able to save and budget enough to buy a house, tending to be lower income (though that is not always true)or are transient- inclined by nature.

Posted by TC4Sanity | Report as abusive

Excellent point. We are are still being sold the same old “American Dream” from cradle to grave even though it is getting harder and harder to attain. Soft-peddling the role of financier/ government cronyism while shoveling most of the blame onto the working class is a shameful exercise.

Posted by changeling | Report as abusive

You describe a mythical utopia. The trend over the past couple of decades is for people to follow jobs and being “rooted” is a hugh disadvantage. The average length of stay in homes is about three years. These are homes that people don’t own, but pay mortgages, mostly interest that is subsidized through the mortgage interest deduction and profited by the very rich through Fannie Mae, Fredie Mac and the Wall Street Casinos with losses backed by the federal government. So, the federal government props up the returns of the Plutocracy, the Members of the One Percenters, in more ways than one. We’re discussing trillions of dollars here.

Posted by ptiffany | Report as abusive

Quite simply, the biggest load of drivel ever written. I wish I could be kinder, but the writer appears to do the usual “blame the victim” approach under a guise of reason and reflection. There is so little insight into his own simplistic assumptions about people and politics that this analysis would not pass a grade 12 essay contest.

Posted by jl270 | Report as abusive

Does anybody build small houses any more? In all the housing talk, why don’t we ever talk about that? As a nation, we are having fewer kids than ever, and yet our new homes are bigger and costlier than ever. A 2,000 square foot home was unheard of in the 1950’s. Much less a 3,000 or 4,000 square foot home. Now, those are the norm. What is wrong with the 1948 scenario of…. young couple moves into a 900 square foot house that costs about 10K. Raise their kids in it. The kids share a room, and if you want more room to stretch out…. go camping. Or bowling. Forget the McMansions. They’re breaking America.

Posted by AlkalineState | Report as abusive

You mentioned ‘slaves.’

There are currently slaves in this America. They are called Temp Workers. The Temp agency contracts with desperate job seekers,and buried in those contracts is ownership of that person. The job seekers sign contracts that say that if they, themselves, go off beyond the agency and obtain a job, if that particular employer is a client of the agency, then the wages thus must be shared with the agency.

The job seekers are never told just who those ‘clients’ of the agency are so ALL employers are ‘clients.’

The contracts have work limits. Some are a person works for the agency at a clients for a continuous 80 weeks, then they are free of the contract. The stupid job seekers sign this agreement and find out that week 79, the client is done with them. Two week off, then the job seeker needs to start another 80 week term to earn freedom.

Maybe YOU should talk about this as your next issue as you indicated.

Posted by elpea123 | Report as abusive

You are correct to tell Americans that they should realize ownership of any land is a dream that will probably never happen because of their continued in ability to afford.

The land gab, though, is happening in this USA. Just recently, a whole segment of Nevada was sold—not leased—sold to China to put in solar energy producing ‘factory.’
The energy will be powerlined over to CA for sale, at first cheap, then as competition dies out, very expensive. Nevada tax incentives are also bending over backwards to make it all nice for foreign owners.

Similar is happening in Idaho! Here the very wealthy foreign investors are selling land for the investors to create energy via hydropower.

As America stops owning our own land…take the leap here as to what will happen.

Posted by elpea123 | Report as abusive

elpea, Temp workers are not slaves. They can quit the job when they want, and they are not sold against their will as property. They can walk. Temp work sucks, but let’s not get so grandiose as to confuse it with actual human trafficking and slavery.

Posted by AlkalineState | Report as abusive

The great weakness of the arguments presented here, which are, as j1270 noted, essentially ‘blame the victim’, is as follows. People want a lot of things, but it is the responsibility of the bank lending cash for home ownership to evaluate the credit risk of the client and make a lending offer consistent with this evaluation. The problem here is that banks could effectively transfer all this risk off their balance sheets by credit swaps, so the institution appeared risk free though obviously the aggregated risk of the web of financial institutions was increased. This started the orgy of subprime lending, and is unrelated to some nebulous average level of desire for home ownership.

Posted by brianpforbes | Report as abusive

Hip Hip Hurray, We got back 15 billion of the 200 billion and they are turning a profit. Good for them. When do we get the other 185 billion back?

Posted by 2Borknot2B | Report as abusive

I’m GD sick and tired of these apologist HACKS trying to brainwash the uninformed into thinking that housing “triggered” the financial crisis. That’s a blatant LIE!!
Every, single, reputable book written on the meltdown correctly identifies Wall St. shenanigans as being the “trigger.” Housing was the fuel. Repackaging bad debt and sloughing it off on suckers eventually became the iceburg that sank the economy because scumbag casino-banks eventually couldn’t cover their bets. STOP your disinformation campaign dirtbag. We’re ON TO YOU!!

Posted by Mac20nine | Report as abusive

fwiw I am still in love with the idea of the Ownership society but with ownership comes responsibility and let’s face it – there are a lot of people out there not up to the challenge.

Posted by tradersteve | Report as abusive

Lewis’ book, The Big Short, was frankly a truer explanation. Fannie and Freddie had always been there, and were late players, except in their conventional role as back stop. See his address at Princeton also.

Structural problems have always prevented general prosperity here. Subsidized mortgages, during geopolitically accidental times of plenty, were just good luck, for the last two or three generations, not good planning or a good system.

Posted by Bozon | Report as abusive