And here is Patrick on housing:
http://www.csmonitor.com/...
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Rents, in turn, depend on salaries. Try walking into a bank and asking for a loan to pay your rent. You know what the answer will be. So why is it that the bank will lend us vast amounts of money to take out a mortgage and take on expenses that will be much higher than rent for the same place?
Because it is profitable to get people into debt. Those profits result in political pressure to pass laws encouraging mortgage debt. For everyone above the buyer on the food chain – from seller to real estate agent to bank to Congress, the White House, and the Federal Reserve – there is a strong interest in getting young and inexperienced families deeply into debt. Once in debt, new buyers, too, become part of the game – they need to find new housing victims if they want to eventually sell at a profit.
Thus we have the mortgage interest deduction, Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), and other harmful government programs, all of which serve primarily to increase the amount of mortgage debt. Since most people don't do math very well and will take on as much mortgage debt as they can, this government facilitation simply results in higher house prices.
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Later in the article Patrick writes as follows:
People in the Midwest and South should not be forced via their tax dollars to guarantee $729,750 jumbo Fannie and Freddie mortgages for Californians when they cannot get such a guarantee for themselves. The injustice is galling.
This point is very important and this issue lies much deeper. Our housing policy not only pits the insane housing markets of California and New York against the rest of the country, but it also pits the wealthy communities of New York, Chicago and Los Angeles against the very poor inner city neighborhoods.
Our housing policy takes from the poor and gives to the rich. Why does the Democratic party push this pablum? You can't make a house more affordable by making it more expensive. Folks should not be forced to take on an inordinate amount of debt in order to buy a house. Our government should be there to serve the people and government does not serve the people by pushing them into debt.
Clearly, we can see from the massive Wall Street bailouts, the bailouts of Fannie and Freddie and AIG, and our unfair housing policy that both parties are there to serve the wealthy.
There are those that argue that if we have a strong housing market this is for the greater good. This is nonsense. It is only trickle down economics in a different guise. And look at the housing crash caused by our bad housing policy. What good was the housing crash to us?