An article in today’s Saint Petersburg Times asks the important question that many who are in foreclosure and others who are experiencing the crisis first hand are asking….who can we all blame for this crisis. The article identifies all of the major players in the crisis we all see unfolding…buyers, lenders, regulators, speculators and builders and makes a convincing case that all are responsible. While this is clearly true, what is staggering is that in hindsight it was ever allowed to get as bad as it has.
A fifth grader capable of doing simple math could recognize that while the cost over housing was rising dramatically, the average wages during the same period were either stagnant or not increasing at all. So while lending standards were continuing to lessen to the point where there really were no standards at all and anyone could qualifiy for any loan, incomes were decreasing at the same time. The most important question is given these facts, why wasn’t more done to head off the crisis we now find ourselves in?
The fact of the matter is far too many corporate, community and government interests were involved in the housing boom to let it slip away. Economists and thinking people knew exactly where we were headed but the interests that profited from the system as it existed were too powerful to allow their cautionary voices to be heard.
For more information, and to view the article in the times, click here.