The problem I have is the fight over the wrong cause. We have become so consumed with the polarity of TBTF banks vs. greedy government in some absurd contest that caused the financial crisis and now jeopardizes affordable mortgages. That's all well and good. But it ignores history.
Our country's economic demise of the middle class began with the business consolidation in the conglomerate era of the seventies. The "synergies syndrome" really meant what Mel Brooks later and most aptly dubbed "Engulf and Devour." Who can forget Bill Farley, Chainsaw Al Dunlop and all the Wall Street glitterati who created downsizing under the publicly more palatable "right sizing" strategy? And, of course, the Drexel-Burnham junk bond scams on the Millken adventure era. Then came investor activism, Carl Icahn with TWA, and the maquilladora imperatives that moved so many jobs into Mexico or to India or Third World/low labor markets including China.
When failed Reagan trickle down economics and jobs lost overseas started crushing the domestic economy, Clinton acted to save our last great, surviving financial driver in housing... with low cost initiatives to get more affordable homes available to a declining middle class population that was increasingly minority slanted. Had he not acted, the financial crisis would have started many, many years earlier. There wasn't that much left in America to work with except housing growth.
What blew up the housing market was not affordable housing initiatives. It was greed pushing mortgage financing to new heights of chicanery to pad banker bonuses to unprecedented levels, right alongside the bonus rewards of executives at both Fannie Mae and Freddie Mac. Regulation was way too lax across all parts of the mortgage landscape.
The discussion that NEEDS to take place is how to save good paying jobs and a thriving middle class. Saving the GSEs or the 30 year mortgage is just a microscopic part of a much larger problem that grew up decades before the easy-to-blame events that now preoccupy the narrative.
JMHO.
