University of Arizona economist Price Fishback, who has been on this blog before, is one of the leading scholars of the economics of the New Deal. He has a great new set of insights to share on the U.S. mortgage mess. He’s also the co-author of the forthcoming book Well Worth Saving: How the New Deal Safeguarded Home Ownership, with Jonathan Rose and Kenneth Snowden.
The Folly of Eminent Domain Takings of Failing Mortgage Loans
By Price Fishback
Several cities around the country are considering using eminent domain to take control of troubled mortgages in their cities. An Associated Press example of how the proposal will work calls for the city to use eminent domain to force the lender to accept $150,000 for a $300,000 mortgage on a home that has a current market value of $200,000. The city would then refinance the loan while cutting the principal owed by the borrower to $190,000.
Eminent domain requires a public purpose for the taking of an asset. The public purpose claimed here is that property values and property tax revenues can be boosted by preventing a mass of foreclosure sales. Real estate studies do show that increasing numbers of foreclosure sales are associated with lower housing values in nearby neighborhoods. However, the spillover benefits of preventing foreclosures, tend to be focused on houses in nearby neighborhoods. Read More »
We’ve had the good fortune over the last few years here at the blog to bring you occasional nuggets from University of Arizona economist Price Fishback, whose research on the Great Depression often offers powerful insights about our current economic situation.
Price’s latest contribution to the blog, this time joint with Ken Snowden from UNC-Greensboro, discusses the Home Owner’s Loan Corporation, which bought and refinanced 1 million severely delinquent loans between 1933 and 1936. Did things works out well or poorly? You’ll have to read on to find out. And if you like what they’ve written, keep an eye out for their soon to be released book (with Jonathan Rose as a third author).
Learning from the Last Great Mortgage Mess
By Price Fishback and Ken Snowden
For the past four years, the U.S. has faced a housing crisis that shows no signs of ending. The situation was similar in June 1933 when the Home Owners’ Loan Corporation was created to address the nation’s last severe mortgage crisis. Some have suggested that a new HOLC could help resolve the current crisis, but their characterizations of the HOLC have been incomplete. Our goal here is to summarize recent research that provides a fuller picture of the HOLC and its impact on housing markets in the 1930s. Read More »
A guest post from Price Fishback. Read More »
In the third and final installment of articles comparing today’s economic situation to the Great Depression, economic historian Price Fishback implores policy makers to avoid the mistakes that were made in the Great Depression. His two prior posts in
the series are here and here. Read More »
In the first installment of a three-part series, economic historian Price Fishback showed just how different the basic macroeconomic facts are in the current financial situation versus during the Great Depression.
In the second of three blog posts, Fishback turns to a discussion of the recent financial meltdown compared to the one that accompanied the Great Depression. For everyone still scratching their heads about what happened to the financial sector this fall, Fishback offers one of the clearest descriptions I’ve seen yet. He then discusses the similarities and differences of the financial collapse that began in 1929. Read More »
Few people in the world know more about the Great Depression than economic historian Price Fishback, which is why whenever he offers an opinion on the subject, I always listen carefully. Back in the fall, Fishback wrote two outstanding posts here at the Freakonomics blog, one on what the New Deal tells us about the […] Read More »
Price Fishback: What Do the New Deal and World War II Tell Us About the Prospects for a Stimulus Package?
Economic historian Price Fishback, who recently guest blogged about the original Home Owners’ Loan Corporation, is back for an encore. This time, he tackles the issue of whether the New Deal and World War II are good examples of Keynesian stimuli. If you want to see these sorts of issues tackled in greater detail, check […] Read More »
Economist Price Fishback: The Real Facts About the Original Home Owners’ Loan Corporation (and What They Mean for a Modern Incarnation)
More and more people are calling for the government to create a Home Owners’ Loan Corporation (HOLC) modeled after the New Deal version that went by the same name. The first person I heard suggesting this was economist Alan Blinder in a startlingly prescient New York Times Op-Ed piece back in February of this year. […] Read More »