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The Year in Quotations By: Bill Steigerwald
FrontPageMagazine.com | Thursday, January 01, 2009

The crash of the economy and the rise of Barack Obama were the big stories of the last year, and both led me to discuss a series of topics in interviews with pundits, authors, think tank experts and newsmakers. Here are some of the interesting, smart, and worrisome quotations from 2008:

The housing meltdown

"What we have to recognize is that in 1995, the home ownership rate was a little bit below 65 percent. That's essentially where it had been in the 30 years up to that point. In 2004, thanks to the subprime market, it reached 69 percent, and that was a home ownership rate that was sustainable only through fraud and risk and irresponsible lending activities. Now that we've returned to normal credit standards ... we're going to be drifting back to the 64 percent or 65 percent home ownership rate. That means that over the next couple of years, somewhere between four and five million people who are now homeowners are going to be 'un-homeowners.'"

-- Ron Utt, Heritage Foundation's expert on housing policy (April 26)

"The broader issue -- the long-term change in lending standards, where it might be harder to borrow, where you might have to put more money down, etc. -- is probably going to last a long time. I don't know how long, but I can tell you that the guidance I get from CEOs in the housing industry and the banking industry is that it is likely at least to the end of next year and probably well into 2010."

-- Erin Burnett, CNBC business reporter and anchor of "Street Signs" (Sept. 20)

How Fannie & Freddie failed

"They are invested almost entirely in mortgages. They never had very much capital because, as I said, they have been very powerful and they are able to influence Congress. So that what little regulation they had did not require them to hold much in the way of capital. So, if you have a very small amount of capital, and you suffer some major losses, which is happening because, as you know, the housing market is not doing particularly well and people are defaulting on their mortgages, Fannie Mae and Freddie Mac are suffering losses."

-- Peter Wallison, American Enterprise Institute fellow and Fannie & Freddie expert (July 12)

Our biggest economic worries?

"One is the free fall of the dollar; that's got to be stopped; that cannot go on. Two is stopping the panic by telling banks and lenders and the accounting industry and the regulatory authorities don't take write-downs on subprimes and some of these other exotic instruments until you actually know what the losses are. In other words, if somebody defaults on a mortgage, you write the mortgage down. But you don't try to guess how much you are going to write off because you don't know."

-- Steve Forbes, Forbes magazine editor (March 15)

Who will pay the tab?

"Your children and mine. Not in the form of debt, which is the standard answer, although they'll pay for that too. But the real cost is, to me, that we will lose the goose that lays the golden eggs -- which is our unbelievably flexible and powerful financial system. We have -- until recently -- had the best capital market in the world. We look across both the stock market down to venture capital to angel investing -- the opportunity to find financing for great ideas was really unparalleled in the United States. That right now is at a standstill. If it does not come back, we will all be poorer for it."

-- Russell Roberts, George Mason University economics professor, pundit, author (Oct. 18)

Will health reform come?

"No. If the Democrats get elected, absolutely not. And what I now see, they are all about more government -- more government funding, more government control. I teach at the Harvard Business School. In a class of 100 students, I have 20 fully trained doctors. I say, 'What the heck are you doing here? Why aren't you practicing medicine?' They say, 'I cannot practice medicine anymore.' That's a tragedy and that tragedy will become much worse under a Democratic administration."

-- Regina Herzlinger, the "godmother" of consumer-driven health care

District of Columbia v. Heller

"The court -- for the first time in 70 years -- has given some meaning to the Second Amendment, a provision that was ratified in 1791, and which meant pretty much what the Framers intended it to mean until U.S. v. Miller, the case in 1939, which was misinterpreted by courts across the country to suggest that you could only use guns in the context of militia service. The Supreme Court finally put that to rest."

-- Bob Levy, Cato Institute constitutional scholar

'Public' Transit

"For most transit agencies in the United States, if they were to write a mission statement that is reflective of what they do, they would indicate that they exist for the purpose of serving their employees and vendors."

-- Wendell Cox, international transportation guru (May 31)

School choice will come

"The United States is the outlier -- it's the place that is strange. All of the Western European countries and Canada have school choice. They don't always call it vouchers, but they have it. If you lived in Winnipeg you could go to any private, public or parochial school and the province pays. They have choice. They have choice in Sweden -- socialist Sweden has choice: vouchers for going to religious schools, private schools, public schools. Only the United States has this system where all the money just goes to the government-owned schools. It's unusual. It's weird. It's not sustainable in the long run. Eventually choice will catch on."

-- John O. Norquist, former mayor of Milwaukee (Jan. 12)

Bill Steigerwald is the Pittsburgh Tribune-Review's associate editor. Call him at (412) 320-7983. E-mail him at: bsteigerwald@tribweb.com.

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