How did conservative economics cause the worst housing market since World War 2?
It didn’t. Leftist economics caused the housing bubble by: (1) subsidizing directly and indirectly the purchase of homes, especially for those who were bad risks, (2) offering many inducements for lenders to make housing loans to those who weren’t credit worthy, while simultaneously threatening many penalties if they did not, (3) wildly decreasing interest rates (a neo-Keynesian, anti-conservative policy) to “stimulate the economy” after the .com bubble burst, and (4) Johnson GREAT SOCIETY and New Left policies of the 60s that suppressed birth rates 1964-1981, making it so that there were not enough 25-45 year-olds to buy up the Baby-Boomers’ houses when they started retiring and downsizing. Also Globalist economics (which has much common ground with Socialism and Corporatism (Fascist economics) – but not much with classical/conservative economics or its current Austrian and Australian School versions) spread the cancer from the primary lenders and guarrantors throughout the whole glob
“The boom in home prices — fueled by heavily leveraged loans built on low or even no down payments — made it easy to forget that housing values had been remarkably stable for a half-century after World War II, rising at roughly the same pace as income and inflation. Prices soared in most of the country — especially in Arizona, California, Florida and Nevada and metro areas of Washington, D.C., and New York — during a brief period of easy lending, especially from 2002 to 2006. That era’s over. So far, home values nationally have tumbled an average of 19% from their peak. As bad as that is, prices would need to fall as least 17% more to reach their traditional relationship to household income, according to a USA TODAY analysis of home prices since 1950. In that scenario, a $300,000 house in 2006 could be worth about $200,000 when real estate prices hit bottom. The price plunge has wiped out trillions of dollars in home equity and caused the worst financial crisis since the Great Depressi
