Thing is had the government not deregulated the banking/mortgage industries they never would have done what they did. I know everyone thinks that those running the mortgage companies and banks should have gone to jail but most had done nothing illegal. Most had operated inside the laws and regulations set up by the government.
Now here is the bad news. The government, and that's any government is most often pretty poor at stimulating the economy. The great depression lasted until England started placing massive orders for war materials. Roosevelt's job programs were a mere drop in the bucket. According to the government unemployment was around 30%. According to historians it was closer to 80%. The jobs program only put 1-3% back to work at a given time. When people got jobs they took care of family. It was until a lot of folks got called back to work that we stated pulling out of the depression. Orders for factory good for the war in Europe is what created jobs. It wasn't declared over until 1941. But that was a world wide depression. England had a similar jobs program but mostly it worked on government housing projects. It too failed to put enough people back to work. Germany was hit harder than us or England. But they recovered from the depression in a short 3 years. Once Hitler started rearming Germany the German government place massive orders for military equipment. Factories not only had to call back workers, they had to expand to meet demand. Then add in the massive building projects. Roosevelt would have gladly expanded the military but with the US isolationist policies of the day couldn't get the funding trough congress. England too was in the mindset that there would never be another major European war.
So back to the housing bubble. Most folks that got caught up in that were their own worst enemy. They could afford a 150K house. But because of government deregulation creative loans could be written up and they could buy a 250K home. First 5-7 years payments were in reach. Then someone popped that balloon and the new payment was 3 times what what the original was. All of a sudden these people could no longer afford the payments. That also meant they could no longer afford to buy things. Factory orders went down. The domino effect kicked in. Yea there were some poor people who lost their homes too. And the news media keyed on those people. Lot of folks were ignoring the plight of the middle to upper income folks who were losing their homes. Most thought that these people had been stupid. Wasn't selling news. So they, the news, keyed on the low income people who never should have qualified for a home loan. And then instead of pointing a finger at the one man who made that possible it was now the fault of the mortgage companies and banks. And the real bad part is the banks didn't sell most of these loans. What the banks were guilty of was buying these sub-prime loans from the mortgage companies. But it's OK cause the news media is never wrong and they said it was the evil banks. But it was the mortgage companies that wrote the vast bulk of these loans under the guidelines and rules established by.....THE GOVERNMENT! And both parties had their fingers in the pie!
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Today's Featured Article - Old Time Threshing - by Anthony West. A lovely harvest evening late September 1947, I was a school boy, like all school boys I loved harvest time. The golden corn ripens well and early, the stoking, stacking,.... the drawing in with the tractors and trailers and a few buck rakes thrown in, and possibly a heavy horse. It would be a great day for the collies and the terrier dogs, rats and mice would be at the bottom of the stacks so the dogs, would have a busy time hunting and killing, all the corn was gathered and ricked in what we c
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