Thursday, May 19, 2011

Some Politics of Housing

. Thursday, May 19, 2011

At a few points recently I've heard people argue that housing policy is either not politically salient, or has little to do with the sorts of macro outcomes that led to the housing crisis. So I was interested to receive an e-mail from my senator, Kay Hagan, pointing me to this Politico op-ed she co-wrote with Sen. Isakson and Sen. Landrieu:

Families are working hard to rebuild savings while the housing market remains unstable. Recent news from the Commerce Department shows that U.S. home builders continue to struggle despite signs of recovery in other segments of the economy. According to real estate data released this week, home prices in the first quarter of 2011 suffered their worst decline since 2008.

Yet banking regulators are dangerously close to issuing a rule that would put homes out of reach for many Americans and further cripple the fragile housing recovery. ...

But federal banking regulators last month proposed a 20 percent down payment requirement on QRMs. Regulators went for rigidity, rather than a balanced, flexible approach.

In contrast to our express intent — and despite repeated warnings from other members of Congress, consumer groups and bankers — regulators crafted a narrow definition that could unnecessarily slow the housing market recovery, increase costs to otherwise qualified homebuyers and dampen incentives for sound underwriting.

The 20 percent down payment requirement leaves millions of qualified potential homeowners with two grim alternatives: pay higher rates upfront for a mortgage that falls outside the regulators’ proposed QRM standard or delay homeownership for a decade or more to save for an onerous down payment.

Here we have three senators, two Democrats and one Republican, arguing against tougher regulation that would lead to higher lending standards. They obviously think this issue is salient enough to write an op-ed about it, at a time when most political attention is being paid to budget reform and other issues. And this is the first e-mail of this sort that I recall having received from Hagan's office. In fact, I'm not even sure how I got on their mailing list.

This is merely the most recent in a series of policy choices that incentivize home ownership in the U.S. The most notable of these is probably the mortgage interest deduction, which not only encourages home ownership, but also encourages the building and purchasing of larger homes. And the mortgage interest deduction is pretty firmly embedded in the U.S. political economy. In Showdown at Gucci Gulch, journalists Alan Murray and Jeffery Birnbaum describe how the proposal to end the mortgage interest deduction was almost immediately removed from early versions of the 1986 Tax Reform Act, because it was a political non-starter. Indeed, Congress was better able to reduce and eliminate subsidies to some of the interest groups usually considered to be among the most powerful -- finance and energy -- than subsidies for home ownership.

The 1986 Tax Reform Act did eliminate some loopholes in the tax code that incentivized tax sheltering through real estate investment, but these did not affect primary residences. And TRA1986 also eliminated tax deductions from other types of interest, such as on credit cards and other personal loans. But not mortgage interest on primary homes. Nor was TRA1986 able to reduce or eliminate the exemption of capital gains on home investment, so long as it was a primary residence and the capital gains were under $500,000 (for a married couple filing jointly). Some estimations have claimed that these subsidies increase home values by 15%. Considering that roughly 65% of the country are homeowners, and it is not uncommon for a majority of peoples' equity to be in their homes, it's no surprise that this is a politically salient issue.

This despite the fact that there is a broad consensus among economists, environmentalists, and urbanists that this policy skews behavior away from the social optimum. An inflated market incentivizes speculation and over-purchasing. It leads to too much investment. It also leads to suburbanization, and increased energy usage from heating/cooling/commuting. Consider as well that it benefits the middle-class and wealthy at the expense of the poor, particular those poor that live in urban areas. To make up for it, the government extends loans to lower-income (or otherwise less creditworthy) borrowers through Fannie Mae, Freddie Mac, and the Federal Home Loans Banks. These organizations fund or guarantee over $6tn in mortgages, or over 40% of U.S. GDP, representing nearly half of the country's real estate market. The GSEs are well-known to have a lot of political clout, and have resisted repeated calls for reform during every presidential administration since Reagan, at least. And, of course, they were the biggest originators of subprime (and Alt-A and interest-only) loans, the securitization of which was rewarded by the pre-crisis regulatory structure. (Note that current research indicates that the bulk of GSE losses were Alt-A, which are prime loans, if untraditional.) The GSEs held approximately 45-50% of all mortgages in the country throughout the 2000s. Fannie and Freddie were also the largest purchaser of AAA-rated MBS, which created a market for other mortgage lenders to lend subprime and securitize the loan, which fulfilled their requirements to support affordable housing, particularly for low-income borrowers*.

Other aspects of public policy incentivized home ownership (or real estate speculation) in less obvious ways. The large, persistent current account deficit did not lead to a currency crash as many had predicted, but it did lead to an increase in demand for non-tradable goods. Like housing. This current account deficit is not attributable to any single factor, but persistent budget deficits in the private and public sectors certainly played a major role. The large demand for AAA-rated financial instruments in which to invest a "global savings glut" also led to a demand for securitized home loans. Finance was happy to oblige. There were major geopolitical dynamics at play as well.

All to say that housing policy is an important political issue. It's important for citizens in the United States, and therefore for politicians. It's important for numerous interest groups, in the U.S. and abroad. The housing bubble wasn't engineered entirely by Wall Street, although they certainly worked hard to accommodate it. There was demand from many corners.

*I'm not trying to argue here, as many have, that the financial crisis was caused by the GSEs. It wasn't. I'm merely trying to demonstrate that public policy is oriented towards promoting home ownership in many ways that take many forms. The GSEs are part of that. The have a public mandate to extend loans to less-qualified borrowers, but that is not all of their business or even the largest part.


rortybomb said...

"And, of course, they were the biggest originators of subprime (and Alt-A and interest-only) loans."

What's your source on this? You link to me, but that post argues the opposite - that you have to fudge definitions to make any of that work, and they had relatively little holdings in the actual, what people in the market would refer to as, subprime market.

Kindred Winecoff said...

Hey Mike, thanks for stopping by. I think in my haste to finish the post last night I hyperlinked the wrong text. The link back to your place should have been two lines below where it is, embedded in "that the bulk of GSE losses were Alt-A...".

I'll fix it. As to your question,

"Armed with these advantages, GSEs increased their book of business from $13 billion in 1965 to $1 trillion by 1990 and $3.4 trillion in 2003. Once the great real estate bubble had concluded by year-end 2007, Freddie and Fannie combined had purchased $4.9 trillion of mortgages, repackaging 70 percent of these into guaranteed securities for the secondary market.

This (along with Ginnie Mae) gave the GSEs roughly half of the $11 trillion mortgage market, but their share of new originations has become near dominant.

Many sources peg this at 70 percent, but an interesting take from TIME magazine business and economics columnist Justin Fox takes into account the impact of refinancings into GSE-backed loans. Juxtaposing GSE total volume ($ 539 billion) against new originations ($313 billion), GSE market share was 172 percent for the first quarter of 2008."

That guy's a bit weird, but there's a Fed summary showing GSEs as the largest players in the secondary market.

As for subprime and Alt-A specifically... I know you reject Pinto's definition on the grounds that the GSEs don't consider all those loans subprime. But the GSEs have an interest in pushing a narrow definition. See this Fed report that breaks things down nicely, so you can see what's going on:

I'm not wedded to Pinto at all, but there's research indicating that lenders (including the GSEs) toed the line between prime and subprime as much as they possible could, and in fact many of these borrowers could have been classified as either prime or sub-prime:

That, combined with the fact that we know that some huge percentage of mortgage applications had false information (I've read estimates of over 50%, although I'm not sure I believe it) indicates to me that drawing a strict line b/t subprime and the dread "other high-risk investments" doesn't make a lot of sense. If the lenders were rigging marginal borrowers to be *just* on the prime side of the fence, then we're talking about a semantic distinction with little real difference.

This Cato report is pretty clear in their breakdown of what Fannie/Freddie had on their books. They've obviously got their normative bias in their conclusion, but the numbers they break down are clear and helpful:

Majorajam said...

Kindred, this is riddled with errors.

The GSE's don't originate loans, they purchase, package and guarantee them.

Fannie and Freddie's mandate is not to lend to lesser quality borrowers (quite the opposite in fact, it is to lend to higher quality borrowers with higher LTVs which was how they justified their eye-watering levels of leverage. Hence their extraordinary losses in the prime space when rre price declines vastly outstripped their worst case assumptions). Rather, their mandate is ostensibly to support broad home ownership by making mortgage interest rates low.

Alt-A are not prime loans.

The market share of Freddie and Fannie plummeted in the middle of the decade during the accounting scandals when their balance sheets were effectively frozen while private label issuance exploded. It was not in any way steady (as dramatically illustrated in the St. Louis Fed paper u cited in comments).

Any paper or blog post citing the GSE's huge market share after May 2007 as evidence of their having their finger prints all over this crisis (and even more superficially, its more notable catch phrases, e.g. 'subprime') is blatant propaganda. Not that this isn't made all the more obvious by 'market share' figures in excess of 100%). Reason being that after the Bear Stearns hedge fund busts sunk the subprime market, the GSEs were explicitly tasked by politicians- which by your framing we could infer also means by the American People- with bailing out the housing market, which meant supporting borrowers across the spectrum.

This they did in spades all throughout the crisis and since and are still doing. Without that support, absolutely critical even now (see the hyperventilation over changing the rules again on jumbos) the Great Recession would have looked like the pinnacle of prosperity. As per our prior exchange, this was very old hat by 2007, (and that is where the action is in terms of actually understanding what precipitated what, and how).

I may be missing more, but that should illustrate the point that more careful research is called for.

All that said, your conclusions are still reasonable, even if I don't entirely concur, not least with the Fed's favorite 'savings glut' excuse, wherein tautology becomes evidence (though I am pleased that you give credence to the mechanism. It was the story. See again the UBS chart I cited in our prior exchange for what is implied by that).

If I have time later I will come back to provide more color on my perspective on these issues.

Majorajam said...

PS I'd be willing to bet that the senators in contrast are much more interested in the political donations of banks/realtors/mortgage brokers/the construction industry, etc. than Joe public. Fact I'd be willing to bet the family silver that the former constituency is important to the coffers of each. All bipartisanship in Washington is forged thusly.

Kindred Winecoff said...

Major -

You're right about originate. Sloppy on my part.

I think you're wrong about the mandate. I'm not sure if you're driving at a de jure v de facto distinction, but the GSEs have been tasked with broadening the real estate market to those that might have difficulty acquiring finance elsewhere. Well-off folks don't have difficulty getting access to credit.

The places I linked specifically drew a distinction b/t GSE behavior pre-2003, 2003-2007, and post-2007. You're right that there are chinks in those curves. The 2003-2007 behavior looks like classic moral hazard to me. (See, eg, this op-ed from Daniel Gross in 2004:

I'm glad at least that you're with my general drift. And I've never quibbled with your UBS pic. I think there's more to this than pure finance, but otherwise I think it's a fine summary.

As for the "savings glut" tautology... I don't think it is. If you can tie EM development strategy to savings (and you can), and you can tie capital flows to nontradables in the US (and you sort of can), then you have a nice causal chain. And, fwiw, the "savings glut" story isn't at all post hoc, unlike almost every crisis story.

I look forward to any other thoughts you've got.

Fred said...

As to your argument in a previous post about the public largely determining policy outcomes, why don't we have higher tax rates when polls show that the public supports higher rates? I'm puzzled by this. Seems to me that elites are not listening to the public on this issue.

Majorajam said...

Of course you're right that broadening home ownership inevitably means extending it further down the income pyramid (one of several implications of making homes more affordable, as is Fannie and Freddie's charter, and effect). However, that doesn't vindicate your description of them as "extend[ing] loans to lower-income (or otherwise less creditworthy) borrowers", at least regarding the right's bête noirs, Fannie Mae and Freddie Mac (it's a somewhat more fitting description of Gennie and much more fitting the far smaller FHA).

Here's the thing- Fannie and Freddie's main function was to subsidize mortgage underwriting, not by assuming credit risk, which was designed to be negligable, but rather by assuming the far more considerable and considerably unattractive to banks interest rate risk of negative convexity/extraordinarily nasty in a rate/liquidity shock mortgages.

This helps to explain why before the financial crisis the perma bears and gold bugs obsessed about the profound effect on markets of the GSE's vaunted and highly destabilizing interest rate hedging activities (think black monday style portfolio insurance). These, btw, nearly sank the bond/asset markets in 94 when their books of business were but a tinnie tiny slice of what they are now... until surprise surprise the Greenspan Fed rode in to the rescue.

The issue I have with your description is that it obscures this salient distinction and in so doing sounds an awful lot like the politically motivated intellectually and morally bankrupt right wing narratives about the financial crisis.

As I said though you are certainly right that the government has and continues to massively subsidize home ownership in a way that has had deeply deleterious unintended consequences. I would argue, as you might expect, that these can only be appreciated in the context of the paramount importance of institutions and the profound effect these policies have had on a great number of them, not least of the private financial variety.

Regarding the 'savings glut' when you monetize the disinflationary consequences of a productivity shock emanating from the emerging markets because your financial system is highly levered and you want to protect it's solvency, you get precisely what we saw with the US at one point absorbing 80% of global excess savings (!!!), EM reserves melting up and a veritable torrential downpour of global liquidity.

The 'savings glut' explanation is an axiom, not a theory. Its main utility lay in pointing the finger at EM for what amounted to profoundly irresponsible policy by our fiscal and monetary authorities. Obviously the policy choices of emerging markets were central to the story- it takes two to tango- but it was the Fed and Treasury that pumped stimulus into the system at every turn, stoking US demand. Not China. And I have seen to many Germans shopping on 5th Avenue and on the beaches of Greece not to know that hoarding does not account for our current account.

Majorajam said...

PS somewhat off topic, we've discussed the subject of financial regulation and its implications for the crisis before and it is relevant here. I always liked this piece for its insight into the economic value created by financial innovation:

Kindred Winecoff said...

Fred, I could be smug, cite Milton Friedman ("to spend is to tax") and say that society has already agreed to higher taxes, the question now is who will pay them, but I won't. The polling I've seen suggests that a majority of Americans think their taxes are "too high", and only support allowing the Bush tax cuts to expire on the top 2%. Obviously the voters elected the anti-tax party in the last Congressional elections.

Time series:

Most recent:

So people don't want higher rates across the board; only on the top 2%. And I expect that will happen. It only didn't happen this past time b/c the GOP minority was able to use procedural rules to block it in the Senate at a time when the GOP had just won an election on a "no new taxes" platform.

You also need to remember that higher-income people are better able to mobilize politically than lower-income people. This is partly about coalition size (logic of collective action) and partly about resources. The median poll respondent isn't necessarily the median voter. The status quo is sticky. Etc.

Anyway, I never said that the public's opinion determined policy perfectly. In fact, I don't think it's even possible to get a majority to agree on the *precise* marginal tax rate for the wealthy, rather than some vaguer "they should pay more" sentiment.

You're trying to push me to a stronger statement than I've ever made. All I've said is that the public influences policy in non-trivial ways. Without that influence, the wealthy wouldn't pay any taxes at all.

Kindred Winecoff said...

Majorajam -

The post isn't about the crisis. It's about the political nature of housing policy. I think that's related to the crisis on the edges, but it isn't the fundamental cause.

I disagree about credit risk. Pre-crisis the GSEs benefited from their implicit guarantee, and that was not just about interest rate risk.

I agree that the "savings glut" is not a theory. It's a consequence. But combined with other factors -- EM development policies plus US fiscal/monetary/financial policies -- it helps to link causes to outcomes. Ie, the savings glut doesn't explain anything on its own, but it is an intermediate step in a longer causal chain that led to the crisis.

I have no firm opinion on CDS. There have obviously been financial crisis before CDS, and now we've had one with CDS. I think, given the same macroeconomic developments, that we would have had a financial crisis in the 2000s with or without CDS. The question then becomes "are CDS responsible for those macroeconomic developments" and I don't think the answer is "yes". Obviously they don't provide all the protection that folks thought they provided, and it's possible that they exacerbated the situation, but if it we weren't blaming CDS we'd just be blaming something else.

I agree with the link you provided that most "innovation" is designed to escape, evade, or arbitrage regulations. That strikes me as more or less inevitable when you have a political economy that rewards financialization but also wants tight regulation. Something's got to give.

Majorajam said...


The notion that it's possible to extricate a discussion of housing policy from the financial crisis while the latter- to channel Mr. Faulkner- isn't even past is fanciful. This goes double when the ostensible dimension is political.

I mean, the political right and their moneyed backers- to say nothing of their mouthpieces in the neoclassical school- all have a real theodicy on their hands, and continue their manic high profile efforts to obscure, revise and bs the whole thing away. Something in me doubts you expected your comments would not be read in that context.

In any case, it's not at all clear to me where my remarks have diverged from the subject of the post, or your response to mine.

Regarding 'credit risk', you've confused the risk of agency loan books with that of agency borrowings. I can assure you the 'implicit' (now of course explicit) guarantee has nothing to do with my prior post.

Regarding CDS, I read a Times article some time back about the passe 'nutrient' paradigm in understanding nutrition. One line from there stood out to me- that you cannot abstract the nutrient from the food, the food from the diet or the diet from the lifestyle. I would argue this is also the case for CDS, which IMO defeats out of hand any elaborate blame apportioning involving its line item.

That doesn't mean I have no opinion. CDS are very much a part of the culture, mindset and institutional approach that characterize the disease that has led to the financial crisis. There are, quite literally, hundreds of examples where they facilitated egregious and irresponsible behavior that ended in tears. Nevertheless, CDS remain just a brick in the wall.

This of course was not my point- attributing blame to a type of contract is not what I would call convincing- but rather the case of CDS in the litany of evidence about what financial innovation is and does.

As to financial innovation, the problem, as Minsky (again) recognized years ago, is that what pays financiers and is good for sound stable financial intermediation are two very different things. CDS are just one in the never-ending litany of examples (a favored recent example involves China's decision to stockpile base metals to get around lending restrictions).

The implication of this, of course, is that the price of sound stable financial intermediation is eternal vigilance. Needless to say, asleep at the switch would be a highly generous interpretation of our performance in that regard.

PS Not entirely apropos of nothing, do you ever wonder why Ben Franklin took such a dim view of our country's ability to maintain the republic the founders had bequeathed it?

Kindred Winecoff said...

"I mean, the political right and their moneyed backers- to say nothing of their mouthpieces in the neoclassical school- all have a real theodicy on their hands, and continue their manic high profile efforts to obscure, revise and bs the whole thing away. Something in me doubts you expected your comments would not be read in that context."

I'm fine with them being read in that context; I'm not fine with people putting words in my mouth. I think it makes perfect sense to examine housing policy following a financial crisis related to housing. I think it makes perfect sense to criticize the policies that contributed to the inefficiencies, fraud, and distortion of the housing market even if those were not the primary causes of the crisis. And just as the right's "theodicy" is annoying, so is the left's insistence that these policies had nothing at all to do with it, and it's really Glass-Steagall's fault. There's room in my head for the belief that a) housing policy, including things the right likes eg interest deductions, is screwy in ways that can exacerbate bubbles; b) that isn't nearly enough, on its own, to explain what's actually happened from 2007-now.

This is the reason I wanted to separate the discussion from the crisis. I was reacting to this from you: "The issue I have with your description is that it obscures this salient distinction and in so doing sounds an awful lot like the politically motivated intellectually and morally bankrupt right wing narratives about the financial crisis." But I specifically said it wasn't, in my post. And it's easy for those (usually on the left) to dismiss policy reform on the grounds that it didn't cause the crisis. That's a false choice.

"CDS remain just a brick in the wall." Agreed.

"Eternal vigilance". The history of finance suggests that there will be crises, regardless of regulatory regime. I'd rather focus on establishing a system that is robust to crisis than one that depends on preventing them.

IIRC from my elementary school lessons, Franklin was talking about the need to protect against the pitfalls of democracy by means of intervening institutions like the Bill of Rights and separation of powers.

Majorajam said...


The comment of mine you've reacted to merely noted the fact that your errors here flatter right wing narratives about the crisis, (very high on their disinformation agenda now since their theories and favored policies were utterly discredited). In particular, your claim that Fannie and Freddie- by reason of government mandate, i.e. their charter- were responsible for pushing the edge of the underwriting standards envelope is patently false and has strong implications for the spin war currently being waged. My pointing all of this out did not put a single word in your mouth- no motives were imputed or accusations made. It simply stated fact.

As for the left, as you've no doubt noticed, I do not concur with their narrative about the crisis, and note the clear agenda embedded therein. I will say this for their story- it's far more accurate than the dangerous foolishness the right is flogging. The crisis evinced a failure of both monetary and fiscal policy including financial regulation. I take a dim view that regulation alone could have prevented it, but given the large extent to which excesses were a function of woeful undercapitalization, at least it stood a chance. 'Getting the government out of the way' or any of the other right wing absurdities here, by contrast, would've only served to make matters worse.

Which brings us nicely to regulatory regimes. Your argument that, "The history of finance suggests that there will be crises, regardless of regulatory regime." is unsupported by mechanism, theory or history. I don't think it's a coincidence that financial crises have gotten larger and more destabilizing the weaker regulation has become. Neither do I think it's a coincidence that there were no crises in the thirty some odd years following the stringent regulation put in place following the Great Depression. And neither do I think it's difficult to find instances during the last crisis where differing regulations had profound effects on outcomes, (e.g. if the Spanish banks had been permitted to luxuriate in off-balance sheet reg arb like the SIVs that sank trillion some ofd dollar balance sheet Citigroup, it's highly unlikely they would never have survived 2008).

These beliefs of mine are informed, not just by empirical observation, but by mechanisms that fit together within a cogent (if not entirely formalized) theoretical framework that accounts for, indeed has anticipated, real world outcomes. That's important, because the historical record can be misread and willfully distorted to no end (paging AEI) when that's all there is to go on.

Speaking of which, even if your reading of history were right, which as I indicated I hardly concede, it would no more justify fatalism than would have, e.g., an eightenth century observation that people have always died of infectious disease. They certainly had, until a few people committed to the scientific enterprise figured out methods of prevention and cure. And that is precisely what is called for here.

As to what history has shown, but convincingly, it's that there is no such thing as "a system that is robust to crisis". The degree to which a system is robust is the inverse of the degree to which it gave in to excesses during the boom. This was but one of the lessons contemporary observers of the Great Depression took from that episode, until Milton Friedman and the Synthesists revised it away. It turns out that, as the record will reflect, the single most critical ingredient in restraining excess is regulation.

Majorajam said...

By the bye, I thought I'd look a little further into the records of the Senators that got this ball rolling, for comic relief, and perhaps a bit of perspective. I'm happy to report that the family silver will remain safe.
Starting with Kay Hagan:
"If the definition mandates a high down payment requirement, it could also harm the mortgage insurance industry, which allows borrowers to take out loans with lower down payments by collecting insurance premiums from borrowers.
Hagan’s state is home to Genworth Financial Inc.’s mortgage insurance division, as well as Old Republic International Corp.’s Republic Mortgage Insurance Co. and American International Group Inc.’s United Guaranty, another mortgage insurer.
Of mortgage insurers, Hagan said: “That’s definitely an industry that needs to continue staying in business.”
Search effort: one page of google results.
Johnny Isakson
Has to be read to be believed:
"It isn’t just the National Association of Realtors, Mortgage Bankers Association of America, the National Association of Home Builders and Sen. Johnny Isakson (R-GA) who want a $15,000 home buyer tax credit. According to Bruce Hahn, president of the American Homeowners Grassroots Alliance, 70 million homeowners want it as well."
The astroturf group those special interests set up wants it as well. Yipee! And in a CBS story no less (!@#@). Sorry, I just find that very funny.
See also:
"In early September, Senator Johnny Isakson, the patron saint of the National Association of Realtors (and a guy who made his fortune selling real estate) teamed up with Senator Christopher Dodd to back a plan that would increase the current $8,000 credit to $15,000, make it available to all homeowners (not just first timers), and double the income-eligibility rules...
...Isakson better hope the White House doesn't carefully read a Brookings Institution smackdown of the home buyer tax Credit cost-benefit. Brookings' Ted Geyer estimates that about 85 percent of people who are expected to use the 2009 homebuyer credit would have bought anyway, and the taxpayer cost to generate additional home sales works out to a hefty government subsidy of $43,000 per sale."
And of course, his name is all over the top contributions list for the home sales, construction and mortgage industries.
Search effort: two pages of google results and perusal of donations records. Not by way of necessity of course, but for pure comic value.

Majorajam said...

Mary Landrieu:
Senator Landrieu had to be the most fun. Even more than patron saint Isakson. She's so nakedly unprincipled, so tainted by influence in every single thing she does that finding links between her and the relevant industry interests here, which I have absolutely zero doubt exist in spades, was actually quite hard (at least in the time I was willing to devote).
Hit after hit was a different scandal- the post Katrina pork barrel extravaganza. The 'Louisiana Purchase' health care reform shakedown. The liberal pickling in oil and gas money, so extreme that she's out there opposing limits on offshore drilling while an environmental cataclysm is taking place off her state's coastline, and more recently in high dudgeon on the floor of the senate over the shock horror of eliminating that multi-trillion dollar industry's welfare check.
I did manage to find that in her reelection campaign in 2008 amongst senators not running for president she received the 6th highest in contributions from both the mortgage broker and construction subindustries respectively, and 8th highest from separate the 'Real Estate' subsector, to include mortgage insurance and banking, all according to open secrets. As for press stories though, it would seem they have a quota on corruption stories per politician and Landrieu's limit was reached and breached some time ago.
That said, simply including her name on a piece of legislation is a red flag, as she's ubiquitously featured on the lists of the most corrupt politicians in the country. No mean feat. For example:
Last but not least, The Dream Team:
"WASHINGTON, D.C. (May 13, 2010) – Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association (MBA) issued the following comment today, reacting to passage in the Senate of the Landrieu/Isakson and Crapo Amendments to S. 3217, the Restoring American Financial Stability Act of 2010. 
The Landrieu/Isakson Amendment requires regulators to establish a category of well‐underwritten single family loans that would be exempt from the bill’s risk retention requirements...
“I want to thank Senators Dodd, Landrieu, Isakson, Hagan, Crapo and others for pushing these bipartisan measures through the Senate, and look forward to working with them and members on both sides of the aisle to ensure these provisions make it through conference.”
Now if you'll excuse me, I'm off to get some scouring powder then straight into the bath.

Majorajam said...

Fyi Kindred, a post of mine (the one before the last) got caught up in the spam filter.

Kindred Winecoff said...

Haha. Well NC obv has lots of sneezy financial firms. But this does get at the broader dynamic I was trying to describe: these kinds of policies are popular with elites because they are popular with both interest groups and the broader public. No downside, politically.

Dunno what's up with the spam filter. Never had problems before. Maybe it doesn't like your multiple posts.

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Some Politics of Housing




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