First let me say I have never been overly great at economics which made this book more than a bit confusing. Because my father works in the financial world this book hit close to home for me. It’s terrifying that so many people tried to speak up and tell everyone that problems were coming. How could they have been ignored?
As I continued to read the book, I noted there were quite a few occasions where the entire financial crisis could have been stopped. For example, Robert Gnzizda started meeting with Alan Greenspan in the early 1990’s saying “Let’s look at the unregulated lenders.” (pg. 86) Edward Gramlich, was asked by Greenspan to head up the Fed’s committee on consumer and community affairs. After learning about the subprime mortgage problem, he wrote the book Subprime Mortgages: America’s Latest Boom and Bust. The book was published over a decade before the economy fell. These are just two of the people who tried to warn the government and the people about what was going on. But for this to all happen it required a perfect storm in that each party and event played its part in creating the crisis. It was not only the mortgages that were such a problem. There was bundling the mortgages, lowering the interest rate, changing legislation, and much more. If this is possible, what else are we not listening to?
Hopefully the financial crisis will make Americans look at things differently. If it looks too good to be true, it probably is.
Discussion Question Response:
What are your views on homeownership? Do you think that every American should be able to own a home, is it a sign of success, do you own a home?
I believe that if someone has the financial ability to own a home, they should have that option. However, if they do not have the financial stability to be able to handle that type of debt and responsibility then no I don’t believe they have an absolute right to own a home. While it is seen as the American dream to own a home, I think the American dream needs to change given the current economic situation. In a place like New York it is not looked down upon to rent your home. Why is it ok in a place like that but looked at differently in other areas of the country? I don’t see why it should be looked at any differently.
Emily Ann, Yes there were a few, what seem to be, lone dissenters that foresaw the impact of the financial crisis when no one else seemed to know or care what the future held in store. It just seems that they were up against something so big that they didn’t have a chance. As investors and lenders made big bucks and ordinary people were blinded by the American dream of home ownership, the government made changes to accommodate it all. And you bring up a very valid point. If there were whistle blowers before the financial crisis, are there other things that we are not listening to now. Scary to think about.
ReplyDeleteWhat do you think the American dream is for our generation?
ReplyDeletePeople have been writing books about America going broke for decades, yet we are still able to finance our debt at low rates. I agree that there were many warnings that should have been addressed, but it is always difficult to predict the future..... Although the housing bubble did seem pretty ridiculous.