8 years later, nobody understands what went wrong…

I recently watched The Big Short, which was a phenomenal movie that explained the toxic result of decades-worth of bad policies designed to increase economic growth while skirting personal responsibility.  Can we at least agree on this?  This is endemic to economics in general, as people are always looking for ways to easily hop into the engineered “middle class” that Democrats like to drone about so often.  But what amazes me is the sheer volume of so-called “professional” opinions on the internet that STILL cannot comprehend what caused this financial meltdown.  Isn’t it funny how the voices that were being silenced prior to the recession are the same ones being silenced after the recession as our Keynesian government attempts to bludgeon the economy once again?  Think about that for a minute…  In fact, a number of journalists scoffed at Michael Burry for voicing his views on the post-2008 economy!

After the financial meltdown, economists from CATO Institute and AEI came out with comprehensive research regarding the overwhelming role of government policy, Fannie Mae, and Freddie Mac in creating this disaster.  70% of the mortgages that defaulted in the crisis were backed by one of these two institutions, while banks were blackmailed, through government policies, to take on these high-risk loans.

Left-wing logic and outrage ensues: “well… the percentage of homeowners classified as ‘poor’ stayed stable at 6% through the lead up to the financial crisis.”  Since when does that mean anything?  The idea is that prospective home buyers regardless of their socio-economic status were taking on mortgages they couldn’t pay off.  If someone made the 2007 standard per capita GDP in America of $48,000 per year but took on a mortgage for a the average house priced at approximately $325,000 in early 2007, they’re still classified as “middle class” even though they’re going to default on their mortgage with almost absolute certainty…

I gathered a snippet from a nerdwallet calculator using 2007 GDP per capita figures.  According to this calculator, a homeowner who can put forth a $10,000 down payment on $48,000 year can afford a home worth $183,000 in Cleveland, Ohio (a city with a mid-priced housing market).

Average Mortgage 2007.PNG

The safe and easy alternative is to NEVER buy a home unless you have so much money lying around that you can safely afford to do anything you want.

The more I learn, the more cynical I become about the general state of society where NOBODY learns to take responsibility for his/her actions.  As Julius Evola stated, the only solution for the critical, rational, and analytical thinker is to “Ride the Tiger” of insanity, pursuing paths independently against the chaotic tides of society.  I guess improvement comes at a very slow pace.  Just be grateful for the privileges we all have in society today. However bleak future events may seem, somehow our incredibly dysfunctional society manages to progress forward.  At the same time, those who refuse to be complacent and constantly seek the truth must speak up and let their voices be heard.

 

 

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