Influx of illegals big reason for housing market collapse
June 22, 2011 12:00 AM | 1862 views | 27 27 comments | 8 8 recommendations | email to a friend | print
DEAR EDITOR:

The key ingredient in the collapse of the housing market is illegal immigration. After nearly three years, no mainstream media outlet will mention it in passing, nor report it in depth, but we all know their reputation for veracity anyway. The simple fact is that many millions of skilled and semi-skilled men were allowed, encouraged, enabled, to come here to (over) build houses, malls, and every other kind of building. The "perfect storm" was the combination of cheap money and an unlimited work force; two commodities that had never before co-existed.

The greed of bankers, politicians, developers and builders is not new. It is, sadly, human nature. There is a fine line anyway between self-interest and greed. Self-interest is what causes men to invent, develop, and improve things. Greed is a notion that even too much is not enough. That certainly seems to fit the description of the housing mania that at long last came to a screeching halt about three years ago, leaving in its wake vast forests of green PVC sewer taps, unfinished strip malls, and an inventory of houses that won't be exhausted for who knows how many years. It was as if all vestiges of common sense and basic intelligence suddenly vanished. Ostensibly grown men with college degrees seemed to be totally unaware of the simplest market boundaries and strictures. The zeal to build was nothing less than orgiastic. It appears in hindsight even uglier than it was as it was happening.

The simple, basic, fact is that the more there is of a thing, the less that thing is worth. And the first, and last, overarching, inexorable, and undisputable fact is that without the presence of millions and millions of undocumented, illegal, quasi-slave labor (15 men living in one room) at the ready, the whole grotesque specter of the rampaging over-building could not and would not have occurred. A resident, tax-paying, native, mortgage-owing, authentic American work force could not possibly have even come close to the amount of superfluous binge-building.

Big Media won't mention this fact, simply because so many entities were involved in allowing the vast illegal hordes into America; chambers of commerce, left-wing politicians, right-wing politicians, builders, contractors and so many more. The entire balance of the written-in-stone laws of supply and demand were upended and perverted.

Not to beat a dead horse, but in all the recapitulations of the event by the lamestream media, the lies of omission are glaring and odious.

Harry Hagan
West Cobb
Comments
(27)
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West Cobb Resident
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June 24, 2011
I'm a conservative and a complete supporter of HB 87, but even I know Mr. Hagan's arguments make no sense.

And for the housing collapse? I blame the individuals who signed on the dotted line much more than the investment bankers.
imeanwhatever
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June 23, 2011
@frogbreath,

I am a conservative, just not racist. Sorry. I guess I belong to a different breed of conservatism than you.

Again, this article, like those that argue man is causing global warming, confuse correlation with causation.

I would explain the difference between the two to you, but your type are not really worth my time.
anonymous
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June 23, 2011
did someone say unicorn magic?! I will always believe!
frogbreath
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June 23, 2011
There are no innocent parties , GOP or DEM in this debacle.So if anyone knows why both parties worked to wreak this havoc on America-- let's hear it.

I cannot believe that out politicians did this through sheer stupidity, it had to be sheer cupidity and, possibly, part of the plan to establish a global economy at the expense of the American economy.

And, darned if that doesn't sound like the redistribution of wealth.
el paso
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June 23, 2011
Clinton did sign on to abolish the Glass-Steagall Act, which was a mistake that contributed to a near depression. However, doing away with Glass-Steagall had been a continuing Republican goal since at least 1980. The Republicans had gained control of the House and Senate and were pushing the legislation to ban Glass-Steagall along with Alan Greenspan. So the subprime debacle is basically a Republican caused event as I stated. Remember it was under George H Bush that the savings and loan industry was destroyed.
frogbreath
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June 23, 2011
GoodScout--

"Mr. Hagan's arguments are foolish, and we're all a little stupider for having to read them."

Come on now, you already had a jump on that before you read the article. I don't think it helped you or hurt you.

Dear lad--who gave those loans and have either you, El Paso, imeanwhatever or Hagans Bull gone into the study to find out who got the loans?? Do you know how many illegal immigrants got loans?? Do you know how many unqualified Americans got loans?? If so, put them in your unthinking responses.

From the Wash Post:

'Last week, the Washington Post published a rosy front-page tale headlined, "Illegal Immigrants Buy Into Homeowning Dream." The article detailed how illegal aliens in the Washington DC area are successfully hooking up with cunning mortgage brokers and complicit lenders to secure home loans. Despite federal laws making it illegal to violate the borders, overstay visas, and recruit, harbor, and encourage illegal aliens, the Post notes that the illegal alien home loan schemes are "legal."

From Diggers Realm:

"If you thought the sub-prime mortgage collapse was a disaster just wait until there's the full shakeout of the consequences of giving loans to illegal aliens. Those same companies that thought it was a good idea to give unknown persons who are illegally in the country loans are the same type of companies that gave them credit cards. These companies now find it simply shocking that someone who could be caught and deported may not pay back the money they took and used."

So you are right in the sens e that the illegals did not finance themselves. So whgo9 gave them the financing and why??

None of you, obviously have been tracking.

Clue , start in DC. It dosen't matter which admin you start at.

Si, se puede!!!--with Washington's help..
frogbreath
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June 23, 2011
Imeanwhatever-

You are, as all of us are, entitled to your opinion. What does bother me is that you claim to be a conservative. This is hard to accept because conservatives usually understand the problem as Harry Hagan has explained it.

This is far from the first time you have come down on the side of the liberals. Please do not insult our intelligence by claiming conservative roots. At least we all know where El Paso comes from, ideologically that is. I also imagine he comes from south of the border or is a La Raza employee.

Why oh, great logician did the bust happen while illegals still here?? Did you expect them to disappear overnight?? Silly assumption. Did you think they would walk away from the likes of people like you who give them food, shelter, free medical care and a free education at our expense?

Proof of your lack of any logical thought--

"now, lets say I move 3000 illegal immigrants into marietta square. is marietta square magically going to have a housing boom? is there some unicorn magic that will cause the banks, seeing the massive amounts of illegal immigrants, to give out no doc loans to cause another housing boom?"

Sweet heaven man, you need a brain enema>

GoodScout
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June 23, 2011
How dare those illegal immigrants come here and force those investment bankers (just freed from the Glass-Stegal Act repeal) to pump money into the hands of housing developers, create no-money-down loans, repackage the bad debt into credit default swaps and then hedge their bets against the very investments they were recommending. The nerve of illegal immigrants to put a gun to the head of homebuilders and developers to sell houses to people who couldn't qualify for them, creating no-doc loans and sales. Mr. Hagan's arguments are foolish, and we're all a little stupider for having to read them.
el paso moron
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June 23, 2011
If you studied history you'd find that the sub-prime loan fiasco began under the Clinton Administration and that CONGRESS (Dem and GOP) are equal in blame for encouraging and funding it!
el paso
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June 23, 2011
What nonsense to submit for publication. A usual cycle of a housing slump came near a depression, because of banks granting loans they should not have made, because they were able to bundle numerous loans together and sell them to investors who were buying a percentage interest in the bundled loans. It was no accident this occurred under a Republican Pres. who discouraged government oversight of banking.
Hagan's Bull
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June 23, 2011
Imagine, the lamestream media didn't tell us that the real cause of the housing bubble and subsequent collapse was - get this - CONSTRUCTION WORKERS! (Well not all construction workers, just Mexican ones of course.) If we just didn't have so many illegal construction workers willing to work cheap then there would have been no rampant housing market speculation, no overbuilding, no ninja loans, no predatory lending, no Americans willing to refinance their houses every 2 years to borrow more money for new cars or buy houses they couldn't afford with 0% down and interest only loans. As it turns out, the Mexicans made them do it! Thanks Harry for setting the record straight. And to think that the lamestream media wants us to believe that it was all Bush's fault. I feel much more educated now.
imeanwhatever
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June 23, 2011
And Harry, if your "theory" is true, then why did the housing boom stop? i mean, the illegal aliens were still here. the trucks and equipment were still here. banks were still giving out no doc loans. regulations had not come into effect yet.

the simple fact of the matter is that when people stopped paying their mortgages that they could not afford, the securities created out of the mortgages become toxic assets that corporations could not absorb.

you see, if you want to post a theory and consider it to be true, you have to analyze the negative, and if it is still true, then your theory is junk.

here, for the slow readers, i will show one facet of the analysis.

2005-2008 - lots of illegal aliens, housing boom

2008-2010 - lots of illegal aliens, housing bust

hmmm, something does not work in your genius theory.

lets try another one, shall we:

2005-2008 - interest only loan kicker payments had not come into effect yet (3 year interest only), housing boom

2008-2010 - interest only loan kicker payments go into effect, housing bust

gee, i would say that a more likely cause than your well thought out cause was the fact that a lot of people that got onto the housing bandwagon using interest only loans couldnt afford to pay the interest plus principle phase of their loans and defaulted.

but hey, your theory works better for some people, right?
imeanwhatever
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June 23, 2011
@CobbRes,

a response to this letter didnt deserve any more thought than that quote.

this writer obviously does not understand anything about supply and demand. What if the banks were not prodded to provide no doc loans? what if investment banks and deposit banks were kept separate? what if interest rates were not dropped? what if more americans exercised personal responsibility and didnt enter into loans they could never afford to pay back?

it took all that and more to create the boom in housing.

now, lets say I move 3000 illegal immigrants into marietta square. is marietta square magically going to have a housing boom? is there some unicorn magic that will cause the banks, seeing the massive amounts of illegal immigrants, to give out no doc loans to cause another housing boom?

in three of our prior, largest housing booms (late 60s, early 70s and early 80s), illegal labor wasnt even talked about because it was either such a small component, americans were not as aware of it, or it didnt exist.

but, Harry, in his genius, somehow figured out that THIS boom was certainly attributed to illegal aliens.

for those of us not living in la la land and not smoking the ganja, we know where Harry's rant stems from. for the rest, it was nice fodder to blame people.

signed,

a conservative with a heart and a brain
j balfour
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June 23, 2011
Half right - a big part of the problem was the unregulated financial markets that allows the banks to push the risk of the loan defaulting on to unsuspecting investors. We need to return to the "old" way of making loans where the bank that makes the loan takes the loss if the loan goes bad - that old "personal" responsibility the right wing touts but does not follow.
maylib
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June 22, 2011
makes perfect sense! this is why home prices soared and interest rates plummeted and banks rolled up a lot of crappy debt into products that were leveraged against 30 to 1. Of course! The key to the global financial meltdown was illegal immigration in america.

I have to ask, did you hurt yourself twisting this one up so hard to meet your agenda?
CobbRes
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June 22, 2011
Great letter, Harry. And more of the same lame rebuttals from the usual gang of idiots.

By the way, "i mean whatever", if you're just going to throw movie quotes around (yes, I saw it too) don't bother.
misterbill
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June 22, 2011
Russ Wood--

While you challenge Harry Hagan's article, you confirm his points.Of course value can increase as demand increases. Harry Hagan pointed out that if not for greedy bankers and illegal immigration, the demand would not have been there.

Secondly, in your causation versus correlation argument, I detect a lover of the fine art of the debate and not the issues.Sort of a reverse Alinsky. Courteous, polite, but seeking a point which may not have been elucidated because it is rather self evident.

You are incorrect about the global housing boom. In England, for example, the immigration of Muslims to that country, many of them monied, cause a large surge in building. If you look into it, you will find interesting items, such as the placing of toilets in homes to meet Islamic requirements. Malmo Sweden is overrun with immigration,. Denmark, France. I could go on, why bother? Your mind is made up to accept your opinion and ignore Harry Hagan's facts.
MAY-RETTA SURVIVOR
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June 22, 2011
I simply can't wait for all of the Mother Earth Kumbya Response my thoughts will elicit. So, here goes:

The fact is, in addition to their filth, litering, crime, welfare mentality and illegitimate children, illegals bring/add nothing to this country.

Personally, when dining in a Mexican Restaurant - or anywhere else for that matter - I would rather fill my own water glass...than permit (yet) another undocumented worker do it for me!
top cat
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June 22, 2011
He got it right: GREED. "nuff said.
Russ Wood
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June 22, 2011
Harry,

I usually enjoy your letters, but this one was a miss, for two reasons.

First, you have your economics wrong when you write "The simple, basic, fact is that the more there is of a thing, the less that thing is worth." This is half true. You are addressing the rule of supply, but it is irrelevant without addressing demand as well. Value can actually increase while supply is rising up as long as demand increases at a faster rate.

Second, you are confusing correlation with causation. Housing did expand dramatically at the same time as the supply of labor. There is a correlation, but you provide no evidence of a causation. Consider this, there was a global housing boom, yet the illegal immigration problem you cite is almost uniquely a U.S. phenomena.

Sincerely,

Russ
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