Home / Quotes / Quote by Michael Hudson

Quote by Michael Hudson

“Actually, high housing prices don't help the economy. They raise the cost of living.”

Quote by Michael Hudson

Author

Michael Hudson is a renowned economist, born in 1939. He has conducted extensive research in the field of economics, particularly in finance, real estate, and debt. Professor Hudson has held teaching positions at several prestigious universities and has authored numerous publications on economic theory and policy. more

You May Also Like

“Everybody would be better off if they could buy housing for only, let's say, a carrying charge of one-quarter of their income. That used to be the case 50 years ago. Buyers had to save up and make a higher down payment, giving them more equity - perhaps 25 or 30 percent. But today, banks are creating enough credit to bid up housing prices again.”

Ifs Giving Years Enough Would Be Today Used Cases Higher Creating Percent Years Ago Credit Income Used To Be Quarters Better Off Equity Housing Payment Buyers

Author:Michael Hudson

“The aim of promoting low down payments is to push prices back up so that fewer houses are going to be in negative equity and fewer people are going to walk away from the mortgages. That will save the from taking a loss on their junk mortgage loans.”

People House Loss Walks Lows Negative Aim Fewer Equity Loan Promoting Payment Junk Mortgage

Author:Michael Hudson

“Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.”

Ifs Thinking Mean Moving House Left Walks Pay Negative Equity Loan Mortgage Cheaper Cushions Collateral Homeowners

Author:Michael Hudson

“The real estate interests and banks are in a kind of symbiosis. They're the largest-growing part of the economy. This is the sector that backs the political campaigns of senators, presidents and congressmen, and they use this leverage to make sure that their people dominate the Federal Reserve, Treasury and the federal housing agencies.”

People Kind Real Use Political President Interest Economy Growing Campaigns Agency Reserves Senators Estates Housing Treasury Congressman Federal Reserve Political Campaign Symbiosis

Author:Michael Hudson

“When you say "bank," a bank is a building, a set of computers and chairs and things. The bankers are the people running these banks. They're the chief officers, and they push the loans because they don't care if they go bad. For one thing, they may package these bad loans and sell them off to gullible institutional investors.”

People Ifs May Care Running One Thing Building Computer Sells Don't Care Chiefs Chairs Officers Investors Loan Packages Bankers Gullible

Author:Michael Hudson

“If bankers can push the loans and make more profits for the bank, they get paid higher bonuses. They often also get stock options. If the bank goes under, they get to keep all of these salaries and options - and the government will bail out the bank. These guys will take their money and run, which is pretty much what they're doing now.”

Ifs Government Running Guy Higher Paid Profit Loan Salary Bankers Bonus Bail Stock Options

Author:Michael Hudson

“I think we're in the take-the-money-and-run stage of the economy. So the banks may go under, but the bankers, who make the policy, clean up.”

Thinking May Running Economy Stage Policy Clean Bankers

Author:Michael Hudson

“The fact that you have government-guaranteed student loans has created a whole new sector in the American economy that didn't really exist before - private for-profit universities that sell junk degrees that don't help the students. They promise the students, "We'll help you get a better job. We'll arrange a loan so that you don't have to pay a penny for this education." Their pet bank gets them the government-guaranteed loan, and the student may get the junk degree, but doesn't get a job, so they don't pay the loan.”

May Whole Facts Helping Government Jobs Pay Economy Students Promise Degrees Sells University Profit Pet Loan Pennies Junk Better Jobs Student Loan American Economy

Author:Michael Hudson

“Normally, if someone goes bankrupt, you wipe out the debt and get a fresh start. But that's not permitted with student loans. So the effect is to impoverish many graduates with very high debts.”

Ifs Effects Students Debt Graduates Loan Wipe Fresh Start Student Loan

Author:Michael Hudson

“Just like a house is worth whatever a bank's going to lend against it, an education is worth whatever the bank is going to lend the student to pay the university. So the availability of government-guaranteed student loans has vastly inflated the cost of education, just like it's inflated the cost of housing.”

Government House Pay Students Cost University Housing Loan Availability Student Loan Cost Of Education

Author:Michael Hudson