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Wednesday, February 25, 2009
This little video has been getting some play recently:
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
I think this does a reasonable job of outlining what was going on in the mortgage industry. There are two problems I have with the video. First, there is an implicit charge of predatory lending (in the second round of mortgage sales to the "smoking" mother). I am sure some people were sold a bill of goods but I am also sure that many people knew what they were doing and that it wasn't right. When the mortgage initiator instructs the borrower to "fill in a number" for their income and the borrower knows they are lying, then the moral failure is on the borrower.
My second problem is that the video completely ignores the role the government played in the whole mess, everyone from the Federal Reserve, Freddie and Fannie, the presidents (Bill and George), the community action groups (agitating for "affordable housing" that was built like a $250k custom house, the courts (on red-lining), and the media. All of these agents contributed any number of policies, opinions, legal and moral suasion, that led to unintended consequences of dramatic proportions.
Nevertheless, for those who are completely in the dark about the whole mess, the video is a good primer.
I agree with your assessment, especially your second point.Post a Comment
Why do you think the role of government was overshadowed?
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