The concentrated wealth that influenced the housing bubble came from a variety of places:
- the building trade (obvious)
- the defense industry (less obvious... in order to "sell" an expensive war, the masses have to feel rich, thus there was pressure on the Fed to let the housing market heat up, and on the SEC to ignore Fannie and Freddie so that Joe Homeowner felt rich enough not to worry too much about extremely high gas prices. There was virtually no talk about the actual cost of the war (short or long term) other than deliberately misleading statements by the leaders trying to sell the war.
- financial services industry (heat in the housing market improves consumer credit ratings and ends up giving free money to banks (b/c the homeowner whose house appreciated now has A+ credit and lots of collateral... and the boom created lots of such homeowners)... all the while the losses are socialized b/c the government will try to prevent large scale housing market price declines.)
- the building trade (obvious)
- the defense industry (less obvious... in order to "sell" an expensive war, the masses have to feel rich, thus there was pressure on the Fed to let the housing market heat up, and on the SEC to ignore Fannie and Freddie so that Joe Homeowner felt rich enough not to worry too much about extremely high gas prices. There was virtually no talk about the actual cost of the war (short or long term) other than deliberately misleading statements by the leaders trying to sell the war.
- financial services industry (heat in the housing market improves consumer credit ratings and ends up giving free money to banks (b/c the homeowner whose house appreciated now has A+ credit and lots of collateral... and the boom created lots of such homeowners)... all the while the losses are socialized b/c the government will try to prevent large scale housing market price declines.)