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September 29, 2008

Comments

Jody

My only objection is to #1, which would have to be handled properly to avoid messing up the housing market further.

I don't blame ANY buyer for participating in the housing market these past ten years, but it's hard to "fix" a bubble economy without raising some serious questions.

My brother, for example, is raising his family in a tiny apartment in the Bay Area rather than take any kind of risk on the mortgages necessary to buy out there. He has serious objections to any plan that rescues the homebuyers who chose the risky option and have had things like backyards and garages because of it.

lillianjane

Having chosen a fixer manufactured house that I can afford on fully-documented income, I tend to agree with Jody, but if we throw money at the problem, I'd rather throw it to at least a subset of the homeowners (lower income or lower house price) than at the top of the food chain. Certainly we shouldn't bail out people with more than one house, or with jumbo loans for McMansions, and so forth.

Hypatia

It’s not a question of helping Wall Street as opposed to Main Street. If the banking and credit system fails it takes Main Street down with it.

I'm sort of hoping we don't have to take the measures FDR did, which didn't get us out of the Depression anyway. WWII did that.

John Petty

I disagree. FDR restored confidence, shored up the banks, and put people to work. You can still see the benefits of the WPA and CCC today.

RE: Main Street. Some people object to extortion, as in "Give us all your money or we'll give you the Great Depression."

John Petty

Jody, no question that some people made some poor choices. On the other hand, lenders were falling all over themselves to make 100% loans, and even covering closing costs. Your brother is smart. Good for him.

Lillian, I agree. Let's try a "bottom up" bailout rather than a "top down" one. True prosperity begins at the bottom, not the top.

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