yeah lets all ignore the American get rich quick dream that leveraged people up to the hilt in an environment of lassiez faire banking regulation
Without more data this will be an inconclusive discussion, but let me just point out four things:
- Securitization of mortgages had been going on for quite a few years before crappy tranches started to appear, so securitization of mortgages per se was not the problem.
- Most of the bad mortgage securities came from slicing and dicing crappy mortgages - but the crappy mortgages had to exist (which happened out there in Main Street) before they could be sliced and diced (which happened on Wall Street).
- Many of those crappy mortgages were sold off to Fannie and Freddie - and without those government-backed/associated institutions buying up those crappy mortgages, allowing the originators to churn their money into more, a lot less crappy mortgages would have been created.
- However we got here, we're here, and throwing $17 billion (big a number as it is) at a $750 billion problem is not going to make much of an impact, no matter how much the politicians spin it.
There is no one single cause for the housing bubble, and surely greed and sleaziness were part of the reason it all happened - along with too much cheap money sloshing around the world, both from investors, and central banks - but a government-backed push to expand the number of people who own homes was also indubitably part of it.
End result? A smaller
share of Americans own homes now than when the whole process started.