Jimmy Lathrop

Human Consequences of the Housing Bust

"Construction workers, realtors, mortgage brokers and loan officers are losing their jobs."

Actually, all the job growth from 2001 to 2006 were in these areas. With the exception of construction workers - many of whom are hardworking, undocumented workers - their impact on the economy was negligble as they acted as mere middlemen. In many cases, mortgage brokers contributed to the breakdown by steering risky borrowers to underwriters and even forging and fabricating documents creating income and assets for borrowers who did not exist. No one likes to see someone lose their job but for a realtor who earned a 6 percent commission by sitting in an empty house on a weekend and then repeatedly calling the real estate attorney and asking "when is this deal going to close" - their contribution to society is debateable. Yes, there is a contraction to GDP from the loss of these "jobs" as mortgage brokers cannot afford the lease payments of their Mercedes. But that is a discussion as to whether GDP is relevant to the social, economic and moral health of the nation.

On the street, all of these salesmen are now peddling "loan modifications" continuing the co-dependent fiction that Americans can continue to live beyond their needs.

Developers undertook risky projects to earn high returns. They have Chapter 11 to hide behind. The salesmen will slip into the insurance industry to peddle annuities for "guaranteed returns in these tough economic times" that they helped create.

Once the ghost towns are bulldozed, and the folly is forgotten, the cycle will start again, boom and bust, until our foreign masters herd us onto reservations towards our gradual extinction. Hey, they're handing out free blankets! (sneezing)