the riskiest investments banks made were mortgages to people making 8-10 bucks an hour interest only with the HOPE they could roll out of it in a year or 2 before the balloon payment popped. And gee isnt it coincidental 7 out of 10 jobs created this year are PART time to stay under the obamacare radar. I'd almost swear I read a quote by Hoffa saying Obamacare would be the direct cause of the downfall of the 40 hour work week.
Wrong. These were people across ALL income levels being sold mortgages that they didn't understand or were assured that they could re-finance easily. It's a misnomer that "everybody" was sold more home than they could afford. In was the type of mortgage, the excessive amount of the loan in regards to their income, ensuing job losses & a combination of those factors. For example, a UPS driver may have taken a $250,000 mortgage on a $280,000 home. He could easily afford to pay a conventional 30-year loan on the home, but the banker sold him on the idea of a 10-year loan with a $200,000 balloon payment at the end of the loan. After all, the housing market's never crashed, has always risen above inflation, and due to low mortgage interest rates it's a good idea to mortgage the entire amount of a home & invest the principle in the stock market. Well, the market crashed and now that $280,000 home is worth $180,000. The UPS driver does not have access to $200,000 ... but he does have $50,000 to pay the difference -- but opps, the lenders -- who just received federal bailouts -- are now keeping their checkbooks closed, so well, Mr. UPS man is friend.
Bottom line: historically a home loan was perceived as difficult to obtain; when banks were forced to hold onto their loans (or sell them to other banks), they were very conservative with their lending. People actually trusted the banks to act in their best interests, when that wasn't occurring. Instead, the banks were writing ridiculous mortgages, deceiving borrowers, fraudulently inflating the borrower's credentials to investors ... and persons were pocketing BILLIONS off these practices. And yet you primarily blame the borrowers? "I'm sorry, honey, but you MADE me hit you!!"
And as far as job creation... can you establish a link to ObamaCare? Most of the jobs created this year were in the retail/restaurant sector -- essentially PT jobs replacing ... PT jobs lost during the recession. Long before Obama was elected, companies -- including UPS -- were transitioning toward PT workers. Teachers, police, accountants, lawyers, you name it, have all seen soaring numbers of PT jobs as companies seek to lower labor costs (for some reason, we think it's OK to pay a PT accountant $20K annually but his FT counterpart $60K, plus benefits ... same with teachers). UPS even tried to convert their FT driver supervisors into PTers circa 2007 (pre-Obama). Didn't work out, obviously.
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Once upon a time I could walk into my bank and speak with a financial consultant who would provide me with excellent advice regarding my finances. Since the shattering of Glass-Steagall, that's no longer the case. Banks are more interested in selling me high-commission ("load") investments than they are steering me in the right direction. Unfortunately, to the population that grew up with the trusting relationship, they cannot comprehend this.
