I am in the process of reading Dr. Thomas Sowell’s book, “The Housing Boom and Bust.” No great surprises there; the Belmont Club already knows the truth. So far I have found out that after the enhanced CRA was passed Janet Reno stated she was going to prosecute banks that discriminate against types of people for loans and that Bwany and Chris and Christine were even more in the tank for Freddy and Fannie than I had thought. Also, President Bush promoted a government funded down payment program.

But relative to jobs, I wonder what the economic trajectory would have been if not for the effects of the CRA and related policies. So much emphasis was placed on building and selling and mortgaging homes that people developed job skills and attitudes that were appropriate to that environment. We not only converted a great deal of real and imagined wealth into bricks and mortar and 2X4’s that were not needed but left many people with the belief that the situation was Normal. The really bad part is that people like Trangbang who were not in on the bubble but just earning a living are hung out there now.

In our county there is now a 10-15 year supply of unoccupied housing built up. Given the downturn in local industry and the snowbirds’ 401K’s it is probably worse than that. There is no way that can get fixed any time soon.

As Dr. Sowell points out, the crash was caused by government policies, local, state, and Federal. I fear an attempt to fix the jobs problem by more policies designed simply to create jobs and not support a robust economy. In one Florida county their economy was so based on building houses that a county commissioner suggested taking the emergency fund and use it to build more stuff so to give work to unemployed citizens. They can’t get it out of their heads that the good times were fake.