The Housing Boom and Bust : Revised Edition

Scary headlines and scarier statistics tell the story of a financial crisis on a scale not seen in decades—certainly not within the lifetime of most Americans. Moreover, this is a worldwide financial crisis. Financial institutions on both sides of the Atlantic have either collapsed or have been saved from collapse by government bailouts, as a result of buying securities based on American housing values that eroded or evaporated.Now completely revised in paperback, The Housing Boom and Bust is designed to unravel the tangled threads of that story. It also attempts to determine whether what is being done to deal with the problem is more likely to make things better or worse. This is a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The'creative'financing of home mortgages and the even more'creative'marketing of financial securities based on American mortgages to countries around the world, are part of the story of how a financial house of cards was built up -- and then suddenly collapsed. The politics behind all this is another story full of strange twists. No punches are pulled when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened when the financial house of cards in the financial markets collapsed. What to do, now that we are in the midst of an economic disaster, is yet another story -- one whose ending we do not yet know, but one whose outlines and implications are explored to reveal some surprising and sobering lessons. Explains How We Got Into The Current Economic Disaster That Developed Out Of The Economics And Politics Of The Housing Boom And Bust. The Creative Financing Of Home Mortgages And Creative Marketing Of Financial Securities Based On These Mortgages To Countries Around The World, Are Part Of The Story Of How A Financial House Of Cards Was Built Up--and Then Collapsed. The Economics Of The Housing Boom -- The Politics Of The Housing Boom -- The Housing Bust -- Housing Mystiques And Housing Mistakes -- The Past And The Future. Thomas Sowell. Includes Bibliographical References (p. 185-225) And Index.