So while initial down payments may not have done much to predict default in individual cases, we could argue that requiring 20 percent down would still have done a lot to prevent so many people in the market from going into default. The down payment is the biggest obstacle most people face to getting into a house. Closing the door to anyone who couldn’t get that much cash together would have kept houses much more closely tied to incomes, meaning that the bubble simply could not have inflated as large as it did — and therefore, would not have had the same catastrophic effects coming down.
Of course, it’s easy to say this in hindsight. It was a lot harder to develop insight at the time. When prices had been in a long, gentle rise for decades, high down payments looked like expensive and unnecessary insurance against something that rarely happened. They looked like a barrier keeping historically disadvantaged groups, like minorities and immigrants, from accumulating wealth the way that prosperous native white families had. They looked like something that regulators and bankers had needed to require before they got so darn smart about managing credit risks, and credit markets.
However, the down payment requirements historically existed for a reason; we didn’t need to wait around to “develop insight,” all we needed to do was remember why. After all, we were allowed to notice that down payments had a disparate impact on “historically disadvantaged groups,” so why couldn’t we remember why down payments were required? After all, there were people at the time when George W. Bush was telling us ZOMG THE RACISM OF DOWN PAYMENTS LOL~!!!!!1 that were warning us that eliminating down payments would disassociate housing prices from people’s incomes and their ability to save money, and would therefore create a bubble in housing prices that eventually would have popped, defeating the financial assumptions of those who said that we didn’t need down payment requirements anymore.
The agency attributed the St. Louis downgrade to the “city’s weak socioeconomic profile; reliance on earnings taxes which are due for voter reauthorization in 2016; a relatively narrow financial position; and a high debt burden.”
The reason why the city earnings tax is up for voter reauthorization next year is because of 2010’s Proposition A. I think Moody’s is worried for nothing if they think city voters will vote to do away with the earnings tax. It’s just that I think that there was an ulterior motive behind Prop A. (And while you’re there, you’ll find what turned out to be a spot on prediction about someone who used to be in Congress from CD-2).
Albany, New York
I happen to think the left’s real silent goal with higher urban-specific minimum wages is to drive NAMs out of cities, because NAMs tend to low wage jobs whose wages are less than the proposed or implemented urban minimum wages.
A better way of saying that is that if the urban minimum wage is higher than the wage equilibrium for fast feeders, then the fast feeders can’t operate in the urban area. If the fast feeders aren’t there, the NAMs that work there and the NAMs that eat there suddenly don’t think the urban area is such a dope place to beez, fo’ real, mo shizzle. So they leave the cities, suing their Affirmatively Furthering Fair Housing Section 8 voucher, plant themselves in a suburban apartment complex close to their 365BellCurve salt licks. They’re lovin’ it.
With that having been said, we have this blogmeister vindicating news out of New York State today.
Notice it applies only to the fast food industry, and will apply to New York City (think: gentrification, hipsters, SWPLs) three years before it applies to the rest of the state.
It’s the next best thing to Andrew Cuomo actually using the NYS National Guard to round up ghetto blacks from New York City and physically dumping them somewhere else.
Chocolate City St. Louis
While the crux of subprime mortgage lending and the subsequent collapse was centered on “sand state” Hispanics, locally, because St. Louis hardly has any Hispanics, subprime was a synonym for black, and it is in the black zip codes where the effects of the collapse still linger. It’s also why the P-D only cites the national subprime statistics for blacks and non-Hispanic whites, and not for Hispanics.
If you can ignore the liberal histrionics, (you say “predatory lending,” I say “affirmative action mortgages”), then it makes for a decent article.
Except for rich, Americans’ incomes fell last year
But broken down into quintiles, those in the top 20 percent of incomes saw their money stream grow by 0.9 percent to $166,048 on average.
Every other group lost ground, with the bottom 20 percent losing the most: their average income dropped 3.5 percent to $9,818.
Thank goodness our elected officials have a solution: Import more people and give them work permits.
The top 20% really isn’t that rich, $101,000 is the household income threshold for that the highest quintile. $101,000 really doesn’t go that far in expensive metro areas. However, I bet that if you narrowed the top percentile metric to smaller and smaller percentiles, the higher percentages their incomes grew.