You don’t lend money to people who have not the means to repay the loan. They did and now they are toast......
The POINT here, Mr. Badger, is that those fancy risky loans woudln’t have been in demand if the housing prices were not distorted and bloated because of all the no-growth and NIMBY crap. That’s the truth. You’re confusing the symptom for the cause. Thomas Sowell knows the difference. He’s right.
I think Sowell is asking a different question. Given that people want to be able to own their own homes, why are homes in a lot of areas where these subprime woes are the hardest NOT FINDING homes that meet their budget, leaving them to take very strong risks ?
The answer based on this article is this -— NO ONE WANTS TO BUILD NEW HOMES IN THESE AREAS.
The next question is why do no one want to build new homes in these areas ?
Sowell believes that it isn’t worth their time to deal with all the hassles of having to negotiate through all the bureacucracy and red tape imposed by the local government whose policy it is to LIMIT the building of houses in the first place due to their advocacy of less sprawl, environmental concerns etc.
Hence, less houses build means less supply of houses, less supply of houses mean higher housing prices, higher housing prices and loser credit means more risk taking....
You get the picture.