Just saying, ask ANY economist you know.

in a one sided article like this?

First Alyssa Kats gives generous praise to Gail Cincotta for her warnings about the Community Reivestment Act, and in the very next question refers critically to the right wingers who blame it all on the the same Community Reinvestment Act.

I support the CRA, and so I noticed the really glaring lack of any questions on the part of Schone asking Prof. Katz to clarify the impact of the CRA on the crisis. Her own vague and effectively contradictory remarks on the subject cry out for this clarification. But Schone failed to follow up. Was Schone even listening to her ?

Superficial and uninformative interview not so much because of Professor Katz, but due to Schone's lack of skill and seeming lack of interest.

One of the few articles I've read that have inspired me to get a book! I'm gonna be ordering it off Amazon.

Frankly, its refreshing to hear an impartial voice who's willing to call a spade a spade. Everybody had a hand in this disaster - well intentioned activists, Democrats, Republicans, Main Street, Wall Street, YOU ...

I'm no defender of Wall Street's excesses (see my other letters), but its clear now that Wall Street's foray into sub-prime mortgages and CDOs was only the straw that broke the camel's back. Blaming Wall Street exclusively (which seems to be the knee jerk reaction) ignores the decades where everybody had a hand in inflating the bubble. Wall Street merely accelerated the inevitable. America needs to learn that stable increased prosperity must come from increased production, not asset inflation or debt-fueld hyper-consumption.

I'm glad someone has mentioned renters, at least briefly. One reason people tried so hard to buy homes is because renters are treated so badly. In most places, they have almost no rights at all. When your landlord can basically throw you out any time, for any reason at all, it's no wonder people are desperate to buy. (I had one landlord who tried to evict me because the heat was broken and it was "too inconvenient" to fix it. That may be illegal, but good luck getting anyone to enforce the law.)

I don't really want to buy a house - I've moved frequently for my job, and buying would be inconvenient. But it's hard to continue renting when there is so little security, even if you have a lease. And the animosity toward renters is shocking - I went to a town meeting to hear about a new housing plan (they want to build luxury rental condos), and I heard the most nasty things directed toward renters (even ones that can afford trendy condos).

Not everyone wants to be a homeowner, and not everyone should be. The housing bubble showed that. But there needs to be stronger protection for renters, so people will have a viable alternative.

You sell a 300,000 dollar mortgage to someone who can't afford that on a house that may be really worth 200,000. After you get enough of the principle back you jack up the rates and foreclose on the poor saps, take back the house and resell it for even more money and keep all the money the first sap paid you.

SWEET DEAL, EH?

Repeat as needed.

How long can this go on until something gives?

DUH!

Adjustable rate mortgages were a criminal enterprise. A very profitable one.

The amount of vague criticisms from the ruling, moneyed class reveals that Ms. Katz is onto something tangible and accurate. And equal credit is due to the above commenter who points out the general failure to recognize true wealth as distinguished from inflated, speculative value. A house is an asset until its carrying costs become a liability.

I do have a question as to whether this article was meant to cover 2 or 3 pages. I see a dead link for a page three when I read this piece.

We bought in 2001 partly because, for LESS than our rent (which was going up outrageously), we could buy a house with twice the square footage... AND we'd get a tax deduction. Great idea, right?

But we had to replace the air conditioner. Twice. We had a lawn to care for, and no interest in doing so. The water heater flooded us and had to be replaced. The roof gets older and eventually must be replaced. We were tied to 30 years of payments. Who knows, 30 years in advance, if you can keep making the payments? Nobody, that's who. So homeownership is risky and inconvenient.

But it's a big house, we could replace the carpet with tile on one floor, hardwood on the other, improve things to our heart's content! But when the wife had knee problems last year and a two-story no longer made sense, we bought a one-story, and sold the old one at a loss. More than 7 years after buying, we lost all the money we'd spent on improvements/maintenance AND most of our down payment. AND have you noticed all those fees at closing??? Ridiculous. All in all, we lost at LEAST 25% of the purchase price. Probably 40%.

But renting? Is that better? Principle and interest on a fixed-rate loan will never go up, whereas rent goes up and up and up. Over 30 years, there's no telling what rent would get to on the apartment we were in! Five times the mortgage, I'm guessing? On half the square feet, and no right to keep pets... or any OTHER rights, BTW?

But if renting gets too expensive or incomes drop, you can move to a cheaper apartment. You're not tied down to that mountainous debt. And who's going to stay in the same house for 30 years anyway? Won't you sell every few years, buy again, get a larger mortgage and/or a higher interest rate, and how is that different from rising rents? I don't know.

I have a friend who has made LOTS of money buying, living in, and selling houses. But he's an idiot savant, when it comes to money. He could buy and sell dog turds, and I guarantee he'd make money.

But the rest of us? It's all a crap shoot!