Housing, Changes: Roots of the Problem?

How did we get here, needing a $700 billion bailout plan?  That is all the news everywhere, including every conversation. Looking at media, how do you understand this? The comments in online articles (ABC News Blog: Stephanopoulos: Paulson Fears Deal May Collapse), have some clues.  It has become political.  The dollar has shed 33% of its value in the last few years and "economists warn that our economy is experience its worst crisis since The Great Depression" some warn and the president sparks fear, coming on tv to explain it. The Paulson Report? The various transcripts are there on Google.

Some say it is unregulated derivatives. Some say it is consumers buying above their heads and using credit when they shouldn't. Some say it is executive pay. Some say it is loose lending practices, especially Fannie Mae easing credit in 1999 to aid mortgage lending (NYTimes). Some say it is greed. Some say it dates back to Robert Rubin and the Clinton Administration.  Paulson says it is illiquid assets from loose mortgage lending. Books will be written to explain this complicated mess.  It is very hard to understand, all these changes.  Revolutions come in fits and starts. 

The Acoma Pueblo (photo, left), the oldest continuously  inhabited village in the U.S. (Taos Pueblo also claims that status) here in New Mexico, was once atop a nearby mesa over 1,000 years ago, according to Acoma legend, but now all there is on Enchanted Mesa is dust.  The new Acoma village, hundreds and hundreds of years old, doesn't have plumbing or electricity or gas and it sits atop a high mesa.  Sky City, as it is called, wasn't accessible by cars until the middle of the last century when Hollywood wanted to make films and created a road to the top.  Port-a-potties line the cliffside and pickups truck up water and propane tanks sit outside the dwellings. Acoma and our latest houses -- the distant exurbs in the U.S. -- are lonely outposts.

The Boomer Chronicles wrote about a study released last week: 684,000 homeowners age 50 and older were either in foreclosure or delinquent on mortgage payments in the last six months of 2007. Homeowners age 50 and older represented about 28 percent of all delinquencies and foreclosures.  The growing trend is that parents are living with their children - something I caught this week.

Empty houses sit in the exurbs.  If they were adobe they'd turn to dust.  Should everyone own a home in America, a piece of land?  Is this capitalism's trajectory, our current critical moment?

Comments

[anthony]

The books that will be written on our economic crisis, the liberal authors will blame the banks , Bush, and Ceo's, and the conservative authors will blame Clinton, Rubin and the Community reinvestment act. I really liked the link you provided "Robert Rubin and the Clinton Administration". By reading a transcript, you have removed the press bias of telling me what to think, and just let Rubin's comments speak for themselves. Anyone who thinks that the 1/4 of one percent of a company that CEO pay may represent is what is at fault, is math deficient. It's our policies and our elected officials that tried to take the market's action out of the market and artificially engineer some new results. It failed, the policies failed, our officials failed us, and no one in Government knows how to own their problems. It's very hard to respect people or an institution, if they simply are devoid of any responsibility. We need to fix the problem, then make sure we let the markets find its own "free market equilibrium" next time.