Hillary Clinton proposes Alan Greenspan to lead a “foreclosure group” which is supposed to determine whether the government should buy up houses to stem the housing crisis:
Clinton, a senator from New York, said the Federal Housing Administration should “stand ready” to buy, restructure and resell failed mortgages to strengthen the ailing U.S. economy.
Alan Greenspan, the former Federal Reserve boss, has been accused by some to be at least partially to blame for the current crisis, for keeping interest rates too low for too long, and thus providing the cheap credits at the root of the housing crash and the current financial markets desaster. Anna Schwartz says:
“They[the Fed] need to speak frankly to the market and acknowledge how bad the problems are, and acknowledge their own failures in letting this happen. This is what is needed to restore confidence,” she told The Sunday Telegraph. “There never would have been a sub-prime mortgage crisis if the Fed had been alert. This is something Alan Greenspan must answer for,” she says.
According to Schwartz the original sin of the Bernanke-Greenspan Fed was to hold rates at 1 per cent from 2003 to June 2004, long after the dotcom bubble was over. “It is clear that monetary policy was too accommodative. Rates of 1 per cent were bound to encourage all kinds of risky behaviour,” says Schwartz.
The financial markets crisis is, of course, not limited to the housing market. People are desperate for cash and while mortgages are known to suffer, the consumer debt in the US is rising, credit card defaults are rising, pawnshops are booming, pay-day loans, the basest kind of making money is rising.
I freely admit, I have lost track of the billions Ben Bernanke has promised to cough up to help the troubled financial markets, but to me it all sounds like they’ve kickstarted the afterburner on the money press.
What I hear nothing about, and would like to as much as Paul Krugman, is about regulations for the financial markets and measures to prevent future similar disasters.
- RESTRUCTURING HELP
- FORECLOSURES WORKING GROUP
- LEGAL PROTECTION FOR MORTGAGE SERVICERS
- HOUSING STIMULUS PACKAGE
Is it just me, or is do I find the old: If it’s good for the economy(read: banks/mortgage servicers), it’s good for you! here? Same old, same old. This is one huge bailout, but not for you!