BindleSnitch — How the Real Estate Meltdown of 2008 Really Went Down

In a recent New York Times opinion piece, Times staffer Christopher Caldwell attempts to set the record straight about claims that Michael Bloomberg blamed the 2007 real estate meltdown on Congressional legislation that pressured banks “to make loans to everyone” but that’s not the whole story.

Michael Bloomberg was quite correct when he made that assertion in a 2008 interview, but he never specifically said that the intent was to broaden home ownership. He didn’t say that because Bloomberg probably knows better.

Caldwell, however, incorrectly claims that the real estate meltdown that triggered the Great Recession of 2008 was “result of a flawed attempt to use credit markets to broaden access to housing.”

Three presidents and their congresses did, in fact, modify lending policies to increase access to real estate loans for people who had been frozen out of the real estate game, but that’s not what caused the 2008 crash, which was brought about by a refinancing boom that began in 2000 in the wake of the bursting of the dot.com bubble.

Broadening access to housing isn’t the same thing as increasing access to home ownership, which is the objective that Caldwell attributes to the ill-conceived weakening of lending safeguards.