How Did We Get Into This Housing Mess?

George Gilder told Dennis Prager yesterday: “We have capital flight from the United States and human capital flight…moving to more attractive investment environments. This is the wrong time to go over the fiscal cliff in January, rescinding President Bush’s good policies, such as his low taxes on capital gains and dividends.”

Dennis: “Why do we have the recession?”

George: “Because we allowed our government to dictate to the real estate industry to the extent that the entire industry reoriented itself to support subprime mortgages and render those subprime mortgages salable by concocting a whole set of derivatives securities that could be sold all around the world. This was enabled by Fannie and Freddie and dictated by Congress and housing administrations. We compounded the mistake by bailing out all the institutions that perpetuated it. We nationalized Fannie and Freddie. We expanded the FHA. All in the name of creating more housing ownership when Canada, which does not even have deductions for mortgage interest, has higher levels of home ownership, without any of these Fannie and Freddie. It’s a terrible failure of government that can’t be repaired by more government.”

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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