Boston Fed's Rosengren Says Throwing Money at the Poor Should Solve Foreclosure Problems
Yes because Lord knows we haven't thrown enough money into that black hole yet.
Via the Boston Globe:
Federal and state policy makers should take a broader approach to the foreclosure crisis, not only adopting measures to prevent foreclosures and stabilize housing, but also providing aid to help the hardest hit communities address underlying social and economic issues, said Eric Rosengren, president of the Federal Reserve Bank of Boston.
In these communities, high foreclosure rates appear symptomatic of deeper problems such as poverty, crime, and failing schools, said Rosengren, speaking today at a Federal Reserve conference in Washington. As a result, Rosengren said, a solution to the foreclosure crisis might be to send more money to local governments and nonprofits to tackle these broader challenges.
"Too little focus has been on community problems because the focus has been targeted to housing and foreclosures,'' Rosengren said. "Rather than treating the symptom -- the high [foreclosure] problem -- we need to better understand how to resolve the more general problems in communities that lead to higher concentrations of [foreclosed properties] and exacerbate the effects."
He's wrong, of course, because foreclosures are certainly not limited to low income areas, no matter what his little Boston Fed survey says. See also: Las Vegas, the San Francisco Bay Area, any lame town in Florida, etc etc. We aren't talking about rows of trap houses in Detroit, we are talking about a fundamental shift in America's standard of living here, stupid. Welcome to the third world, leave your malaria at the door please.
It takes an economic rocket scientist to figure this shit out?
The next figure highlights that high concentrations of REO are not the only problem afflicting those communities. Zip codes with four or more REOs per square mile also have higher property crime rates, higher rates of low birth-weight babies, higher unemployment rates, and weaker small business activity. Note that all these charts are for the time period that generally precedes the foreclosure crisis, so these communities were already challenged.
Wow, thank goodness these asshats are totally on the problem. Fire up the press, we have non-profits to bail out!