Barney Frank: The Poor Should Rent, Not Own (Liberal admits disastrous mistake)
Barney Frank: The Poor Should Rent, Not Own
In its final installment of the Big Think’s “Went Went Wrong” Series on the financial crisis, they interviewed Financial Services Committee Chairman Barney Frank (D-MA). Much of the interview was predictable: Frank mostly explained what anyone closely following the financial regulation push in Congress already knew. But there was one fascinating gem in discussing where Fannie and Freddie went wrong. Frank views ushering the poor to own homes as a mistake and believes they should rent instead.
Frank was responding to the question about how Fannie and Freddie could be structured to avoid moral hazard and a too cozy relationship with the regulators. After stating that we should separate the liquidity creation function from the subsidy objective (which we already knew he supported), he said:
I think the answer is you separate out the function of providing the equity in general for the mortgage market and doing some subsidy and in my judgment, the subsidy again, as I said before, should be focused on affordable rental housing, not in pushing low income people into owning homes that they can’t afford.
Can I get an “Amen!”? If someone cannot afford a house, they should not be encouraged to purchase a house. The logic couldn’t be simpler. And yet, over the past decade it was utterly ignored. I’ve never understood why renting is viewed as so shameful or low class. I’ve rented my entire adult life. I once had a supervisor pushing 50-years-old with a wife and two kids that probably made over a million-dollars-per-year, and he still rented.
(Excerpt) Read more at business.theatlantic.com …
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