[Peace-discuss] Michael Hudson excerpt

[David Green]

I don’t think people realize the radical damage that Obama did to the
economy by bailing out the banks and not rolling back the terms of bank
credit to keep housing affordable. Obama basically said, “Make housing
unaffordable. Make as many junk loans as you want. Don’t worry, because
I’ll stand between you and the mob with the pitchforks.” He didn’t jail any
bankers. He didn’t regulate them. He created the situation that Trump
inherited. Trump has just pushed it to a further degree, with full
Democratic support. The Democratic donor class loves Trump. They want him
to be reelected because he’s cutting their taxes, he’s deregulating their
banks, and he’s essentially deregulated fraud!

This leaves the millennials with a problem. How can they cope with a
situation where they don’t have anyone representing their interests either
in Congress where it’s really the same party now, or with an opportunity to
earn enough to get a home mortgage? It’s very hard  to earn the money that
you need to buy a house anymore. There has to be a god in a machine – *Deus
Ex Machina* – meaning rich parents or a rich uncle.

*Paul Sliker: So maybe a better investment for millennials would be to
organize outside the banks.*
Michael Hudson: Well, here’s the other problem: Congress last week
deregulated community banks. I’ve worked as a consultant for community
banks in Chicago. Their strategy is to make more reckless loans than the
commercial banks. So deregulating them enables them to lend at even higher
debt to equity ratios. They can set lower down payments, and help bid up
the price of real estate even more. So the congressional rewriting of bank
regulations last week makes it much harder for millennials to get an
apartment, because it will inflate the price of housing with yet more bank
credit.
https://www.counterpunch.org/2018/06/01/us-vs-china-housing-and-those-millennials/print/
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