Posted by Leonard Steinberg on November 7th, 2011

Mayor Bloomberg recently passed most of the blame for the Housing crisis on Congress. Occupy Wall Street is blaming Wall Street. I grew up in South Africa in the 60’s and 70’s, a time when the country was plagued by a host of sins. was a court-like restorative justice body assembled after the abolition of apartheid. Witnesses who were identified as victims of gross human rights violations were invited to give statements about their experiences, and some were selected for public hearings. Perpetrators of violence could also give testimony and request amnesty from both civil and criminal prosecution. Maybe its time for us in the USA to come together for a TRUTH AND RECONCILLIATION COMMISSION addressing the numerous sins around the Housing crisis and subsequent financial meltdown that has kept the country stuck in miserable recovery after the GREAT RECESSION.

With everyone blaming everyone, I think this process could re-direct our attention away from blame and start to focus on how to fix the problem and prevent it from happening in the future…..honestly. Let’s face it, there is a lot of blame to go around. If you recall, Congress passed laws that encouraged and often required banks to provide mortgages to less than stellar lower income buyers. Many buyers bought homes they knew they could not afford. Many homeowners re-financed their homes to take out large chunks of cash to spend at the Mall as if their home was an ATM…..banks, book writers, brokers, financial planners and friends encouraged it. Banks and brokers encouraged buyers to buy homes that were well outside of their affordability zone. (The conomy was booming and surely, your income would rise forever?) The Fed kept interest rates low. Presidents Bush and Clinton both pushed the concept of homeownership for all. The banks took these new laws as an opportunity to manipulate the system, buying and selling mortgages, then re-packaging them as swaps and selling them, but bet against them without full disclosure of just how bad they were….probably the most fraudulent of all the activities, although the appraisers who over-appraised the true value of many homes are probably as guilty of criminal activity. Then there were the real estate investors who bought and sold for quick profits, artificially causing housing shortages that caused pricing to spike…..artificially. Then there is the whole financial system that is based mostly on excessive consumption and easy credit….a system that encourages people to spend more than they can afford, at all levels. What about the entire political system that has not provided sufficient education to the country in the most practical of areas: managing your personal finances. Does anyone teach this subject at school? Then throw in the self help book writers that said if you imagine it, it will come true….buy now and get rich quick! What about religious institutions that did not address the subject of greed often enough?

The HOUSING TRUTH AND RECONCILLIATION COMMISSION may finally reveal that we were all responsible for the meltdown in some way, whether directly or indirectly (by not voicing our objections loudly?). So maybe one HUGE confession session could resolve all of this and turn our attention to where it should be: SOLUTIONS.