Wednesday, May 25, 2016

Elizabeth Warren was, and still is, a socialist idiot

Elizabeth Warren now attempts to play her clout in the presidential race, and as expected comes off sounding like a deluded socialist.

Warren's latest comments seek to attack  Donald Trump over Trump's roll as a real estate investor around the time of the 2008 housing market meltdown.

“Donald Trump was drooling over the idea of a housing meltdown — because it meant he could buy up a bunch more property on the cheap,” Warren said, as reported in the Washington Post. “What kind of a man does that? Root for people to get thrown out on the street? Root for people to lose their jobs? Root for people to lose their pensions?”

Did Trump express greed, or was he merely expressing the role of capitalism in holding a financial crisis in check?

And it wasn't just rich guys who saw potential as the real estate market cratered.  (I'm actually not aware Trump invests in middle class single family housing. Would Ms. Warren like to show us where he is?).

Yes, many house buyers in 2008-2010 time frame were investors. These peole saw potential for solid returns. Some were "rich", others borrowed from family, or even used credit card cash advances to acquire properties.  But opportunity came with risk. There was potential to lose money as well as make it. I can recall surveying streets in parts of DeKalb County, Ga. where three out of five houses on a street appeared vacant, most in foreclosure.

Also overlooked is that many who bought houses during the downturn were buying a home for themselves and their families. I know of at least two immigrant families who bought homes that were probably acquired for 30 percent of  pre-crash values. I'm also under the impression at least one of these families paid cash for their home, so their family wasn't locked into the burden of a mortgage. These homes have at least doubled since they were purchased in the crash era. I found it telling that frugal immigrants saw the opportunity and had the means to profit a market crisis, while most debt-laden Americans could not, and could not even see the potential.

Let's not overlook the housing bubble that preceded the housing crash.

How'd we get a housing bubble? Politicians and lenders were obsessed in pumping out more and more mortgages, and lending standards where slashed to keep the volume flowing. Low-doc loans became no-doc loans, unqualified buyers and outright swindlers took full advantage of the easy money. Rhetoric of fairness and housing equality were allowed to supersede sound financial policy to assess whether borrowers would or could actually repay loans.

I wonder if Warren has stopped to consider how much deeper the 2008-2009 market meltdown might have gone had private investors not come in, put capital at risk, and, by so doing, put a floor under collapsing housing prices.

Perhaps Warren also believes the moms and dads who bought homes during the market crash were unfairly exploiting others. 

Elizabeth Warren was wise not to seek this year's Democratic Party presidential nomination. Trump would have easily rolled over her naive, fairy tale socialist economic viewpoint. 

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