I realize this is old news, but as I’ve said before, it takes me all week to read the Sunday NY Times. Just last night I read this front-pager that touches on themes I’ve discussed earlier.
The article’s on Clintonite Henry Cisneros, who went from HUD secretary to— imagine this —- low-income housing developer and board member of a major mortgage lender. Cisneros emerges as kind of Forest Gump of the housing implosion:
The causes of the housing implosion are many: lax regulation, financial innovation gone awry, excessive debt, raw greed. The players are also varied: bankers, borrowers, developers, politicians and bureaucrats.
Mr. Cisneros, 61, had a foot in a number of those worlds. Despite his qualms, he encouraged the unprepared to buy homes — part of a broad national trend with dire economic consequences.
It’s clear Cisneros worked the private sector based on his experience as HUD secretary, doing his part to loosen government regulations before crossing over to the private sector to take full advantage of those lax regulations —-knowing full well HUD was insuring the mortgages and would eat them when they went bad. Talk about gaming the system.
In my mind this proves without a doubt that the housing mess was government-driven. That’s why I’d give anything to hear a presidential candidate say the first thing he’d do upon taking office is shut down HUD, a hole into which taxpayers have poured who-knows-how-many billions of dollars. Unfortunately, I’m not hearing that from either candidate.
