A friend recommended this book because she felt it had a unique perspective on the housing crisis. In that I have to agree. The author has removed most of the accountability for the the housing crisis from the banking industry and placed it on the politicians and their agendas spanning back for more than 20 years. Although I don't agree with this overall conclusion I do think that he did an excellent job at gathering statistics and building his case. He also sited specific times that warnings of the pending crisis went unheeded and were even covered up. For this reason I felt it was a valuable read to fill in some of the blanks. The contents include:
- The Economics of the Housing Boom
- The Politics of the Housing Boom
- The Housing Bust
- Housing Mystiques and Housing Mistakes
- The Past and the Future
His second point was that the government intervention in demanding "affordable" housing was what resulted in the high risk and variable interest rate loans and he believes that this government action was forced upon the banks to their own demise. Though I found his argument interesting and his finger pointing intriguing I just don't buy it because bankers as the financial experts were the ones in a better position to provide reasonable options for meeting the stated goals. There is too much evidence that shows that the grab and greed was going on and therefore cannot be ignored. What I did come away with was the idea that maybe it was time for mandatory term limits for all political offices and to vote out ALL incumbent politicians who were in power during the development of the housing crisis and subsequent economic crisis.
Thomas Sowell has taught economics at Cornell, UCLA, Amherst and other academic institutions....He is currently a scholar in residence at the Hoover Institution, Stanford University. He has published in both academic journals and in such popular media as the Wall Street Journal, Forbes magazine and Fortune, and writes a syndicated column that appears in newspapers across the country. (from the back cover)
Needless to say, he has great credentials and his perspectives were very interesting to consider.
Dr. Sowell also addresses the question of racial discrimination in lending practices, and the influence of the federal reserve bank. His discussion of Fanny Mae and Freddie Mac was extremely interesting as a major player in the crisis.
Overall I think The Housing Boom and Bust provides good supplementary reading to those interested in the hows and whys of the housing crisis. The discussions of land restrictions, government policy, and the secondary markets and their influence are important to understand at the local and national levels. This I think brings the greatest value to the book especially to those interested or involved in local politics and how they effect our daily lives.
Throughout the book the author made statements that I felt were profound and insightful and showed his mastery of communicating ideas for consideration. I would like to close with a quote from page 119 "Government actions cannot be discussed as if government is simply the public interest personified. Government actions are political actions, and nowhere more so than in a democracy. The time horizon of elected officials is all too often bounded by the next election. Quick fixes are one result. Nor is this something new or peculiar to American politics. Writing in Britain back in 1776, Adam Smith referred to "that insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs." Many of the "problems" which politicians set out to "solve," are bad consequences of previous quick-fix "solutions"created by the same politicians ...."