There they go again

Anybody who enjoyed the financial panic of ’08-’09, and the Great Recession that followed it, will love the repeat performance now being readied.

This farce (with tragic consequences) is now being cast by the same joint production company that brought the country all that economic wreckage a decade ago, and for the same mix of reasons. All the way from initial good intentions (yes, that’s still what the road to Hell is paved with) to sheer greed.

First the politicians warm up the crowd by saying the country needs to assure that more people can get a federally insured mortgage to buy a house— whether they can afford the payments or not. Then real-estate appraisers, yielding to pressure, inflate the value of the houses being bought in order to assure that these dubious mortgages will go through. Bankers do their part by turning a blind eye to what’s going on, followed by hedge-fund operators who find ways to bundle all these sub-prime mortgages into negotiable securities.

Not till the poor suckers who can’t make their house payments begin to default does the whole house of cards, or rather of worthless mortgages, come falling down. Recommended reading: Thomas Sowell’s authoritative history of the whole debacle, The Housing Boom and Bust. Professor Sowell might as well get started on a sequel to his book because it’s all happening again. (“Dodgy Home Appraisals are Making a Comeback,” Wall Street Journal, Page 1, December 2, 2014, or just the day before yesterday.)

To quote another noted economist, Bette Davis in one of her stellar performances, “Fasten your seatbelts, it’s going to be a bumpy night!”