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Free market foreclosures.

Publication: Arena Magazine
Publication Date: 01-AUG-08 		Format: Online
Delivery: Immediate Online Access
Full Article Title: Free market foreclosures.(AGAINST THE CURRENT)

Article Excerpt
The current US housing crisis grew out of politicised government policy and a shared commitment among business elites to support a laissez-fair, free market, anti-tax economy unhindered by regulations. As David M. Abromowitz, Senior Fellow for the Center for American Progress, has said:



The foreclosure crisis is a manmade phenomena ... It's not just the side effect of a normal market cycle. There was a push to boost home ownership and a pattern of under regulating financial services and support from all kinds of businesses to allow the free market to take over.

The crisis originated in Allen Greenspan's decision to lower federal interest rates to protect the economy from recession after the internet stock bubble and 9/11 imperilled the economy. While the Fed kept interest rates low, investors sought higher returns and real estate appeared undervalued. With a plentiful flow of funds and exotic new unregulated investment instruments created by financial institutions, the real estate market took off.

Although housing costs had risen at a yearly rate of 1.8 per cent over inflation since the...

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