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The first mortgage-backed securities crisis -- 1928

April 28, 2012 - Harry Eagar
Professor Louis Hyman, a specialist on the history of debt, has an excellent piece at Bloomberg about the first mortgage-backed securities crisis, back in the Roaring Twenties.

I particularly like that he mentions that the Great Depression for farmers began in 1921. All economic historians know this, but so far as I can determine, all rightwingers pretend it never happened.

My only quibble about this fine piece is that Hyman claims that mortgage financing, not job losses, were primarily responsible for the housing crisis of the Great Depression. This is not incorrect but it is misleading.

Job losses in the Republican Great Depression were concentrated among wage workers, and wage workers were renters, not owners/.

It was the New Deal that made the idea of owning your own home part of the "American dream." It was never -- and still is not; read the rightwing blogs if you doubt me -- part of the rightwing Republican idea of a well-functioning society.

They want the rich to own everything, and the workers to be beholden to the rich even for a place to sleep at night.

In the '20 and '30s, one of the main ways bosses controlled strikes was to evict families of strikers from their homes.

That kept wages down -- although Ben Bernanke appears not to have noticed this. The war on workers is nothing new.

 
 

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