The “Crisis Strategy” That Crashed Our Housing Market

In order to build something beautiful, sometimes you must completely tear down what stands in its way. If the football team isn’t taking you to the Super bowl, you trade them all in and bring in some fresh talent. If the house is old and decrepit you bring in wrecking ball, you tear it down, and build something beautiful. There are definitely times [that] a wrecking ball encourages a fresh start. There’s no doubt about that.

But do you buy into the case that we must tear down capitalism, the free market, and savings accounts of our friends and neighbors in order to create a more perfect America in the future? Many politicians do, and they got the idea from Cloward & Piven, a couple of Columbia University professors in 1966.

My name’s Molly Vogt, I’m an Americhick and I’d like to just take a quick moment to talk to you about how the followers of a Cloward & Piven strategy, also known as the “crisis strategy,” lead to the 2008 housing crash, and ask you to consider what it will affect next.

Cloward & Piven activist’s said that we should work to sabotage and destroy the welfare system so that a political and a financial crisis can rock the nation, and rock it they did. How do you make more people dependent on the government? You take away their ability to financially take care of themselves. You make their homes unaffordable, take away their savings account by encouraging them to invest in something they can’t afford and then crashing the market.

For this example let’s look at the housing bubble. Consider the decades of government incentives for low-income families to tie up their savings in a house they can’t afford. Remember the New Deal, Fair Housing Act, and many more after that.

In the 90’s, President Clinton required banks to hold at least 50% of their home loans in subprime loans. That means they needed to lend money to families who were never going to be able to pay the money back at rates that were not sustainable and would certainly increase in the future.

Did you ever stop to think perhaps there’s a reason private lenders and investors are more successful than the government? Because they’re investing their own money, so they actually measure the risk of an investment before making it. Sounds logical to me. When a bank is forced to lend their money to a great risk, how do they cover their shareholders? Well, I’ll tell you what they did. They packaged the subprime loans, rated them much safer than they actually were, and they sold them to every mom and pop 401k plan in the U.S. and across the globe. What was the end result? A 6 trillion dollar real estate value loss from 2007 to 2009.

Then the housing crash lead to the Great Recession. Retail spending collapsed 8%. So, a family with a $30,000 net worth in 2007 equaled almost nothing only three short years later.

What’s the point? The point is, I just want to ask you all to dig into the true intentions behind what seems like good intentions. Read Cloward & Piven’s strategy and see where else you see a crisis strategy being built. Tune in Sundays as the Americhicks get to the heart of the matter on issues affecting your family every day.

Leave a Reply

Your email address will not be published. Required fields are marked *