Tuesday, June 8, 2010
Michael Pattinson of Barratt American whines about the banks
In an op-ed in the Salem News, the president of bankrupt developer Barratt American (builder of Leucadia's Rancho Tyvek Estates -- "Come for the tiny lots, stay for the low-income housing next door") complains that it's not fair that some people on Wall Street recognized the housing bubble and bet that it would burst, or that some banks stopped lending to overleveraged developers as the housing market cratered.
The developer industry spent millions of dollars lobbying Congress to keep the housing bubble going with tax incentives, lax lending standards, and easy credit from an alphabet soup of government and quasi-government agencies including FHA, Fannie Mae, Freddie Mac, and the Federal Reserve. I didn't hear Mr. Pattinson complaining as he was getting rich from the funny-money-fueled bubble. In fact, Pattinson was a frequent contributor to the industry's lobbying PAC.
The housing crash was the inevitable result of the greatest asset bubble in the history of the world. Any builders who were overleveraged at the peak of the biggest bubble in history have only themselves to blame for their demise.
Pattinson's argument is equivalent to saying that Bernie Madoff's Ponzi scheme was a good thing, and the only problem was that investors stopped giving Madoff money to keep the Ponzi going.
Pattinson should stop trying to shift the blame to those who recognized the bubble, and apologize for the wreckage that his industry has caused the entire economy.