(apropos of this) …
The US guv-ment should buy bank-owned properties, thus flooding the banks with some liquid assets that they can then lend out to interested parties in those regions with massive foreclosures. This should make banks happy — not as happy as if they’d been able to flip those properties, but we demonize the individuals that tried to do that, so why should banks be allowed? (I KNOW I KNOW), but happier than if they eventually have to sell those properties in a fire-sale type of circumstance. Or, what the hell, let Goldman Sachs buy the properties, and then sell them to guv-ment in some sort of awesome collateralized bond deal. Isn’t this what creative destruction is supposed to be about?
Then the government should rent those properties to individuals/households, or sell them at lower prices to people trying to move into those places. (I’m spit-balling, here.) There should be something similar going on in regions where people are trying to move out of — the government should buy the houses, then get paid back by those trying to move the hell over to where they could work if they could only find a way to move there (or is this still a problem? They talked about it a lot on NPR three months ago, I’m pretty sure).
What would be good about this? (1) Banks would have more capital to loan out — though holding companies might just force them to hold on to it, so hmm. (2) Businesses might have incentives to move to the places that the gov’t finally intervened in, if the banks were actually lending, and there seemed to be people around. (Although maybe they’ve all moved. Hmm.) (3) People might move back to those locations, if everything is about getting work these days. (But this hinges on (1) and (2) happening.)
The problems with this all seem to stem from highly profitable private sector entities, who were the root of the whole stupid crisis in the beginning. Oh yeah, and the whole ‘no guv-ment spending” everything. FTS.