We need to look at more than just the deregulation. We need to look at NAFTA and the other "AFTAs". With manufacturing mostly gone from the US, many good blue collar jobs have gone. Join me over the fold
People have had to struggle with lower paying jobs to try to make ends meet. But the ends don't meet. So what does Ma & Pa America do? They take out a home equity loan to cover the difference between standard of living and real income.
This can go on for awhile, but eventually, either they exceed the equity in the home or the value of their property goes down so they no longer get the extra funds to keep living within "their means". Soon, the mortgage and equity line are delinquent, soon foreclosure comes and out Ma & Pa America go.
This gets repeated a few million times over the course of the last few years and PUFF, we have a foreclosure crisis. But really, we have a jobs problem. People were doing OK until Bush came along and people lost ground with inflation. With the housing bubble breaking, house values declined, making it even harder for people to stay in their homes. So when some see this as a deregulation issue, I see it as a trade issue.
Bring back manufacturing and technical jobs and we will have the money needed to pay the mortgages, but no good jobs, housing values will continue to decline, more walk-aways, more foreclosures, and we will begin to see that the housing bubble is hardly started.
If Fannie & Freddie hold $14 trillion in mortgages, then we better be prepared to pay out that much for this "fix" because until the jobs come back, it won't be fixed.