Now, I know that this isn't going to do one damn thing to get us out of this mess, but it's sometimes instructive to see how things happened, and maybe we can learn something.
You should read this from Roger Simon on Pajama's Media:
Who caused “the biggest financial crisis since the Great Depression?”
I'll summarize: this crisis was caused by a bursting of the housing bubble, which formed when the Democrats passed the Community Reinvestment Act in 1977, and used rules and legislation to force banks as well as Fannie Mae/Freddie Mac to loan money to folks who couldn't afford to pay the money back.
Here's some interesting points from the story:
"The original Community Reinvestment Act was signed into law in 1977 by Jimmy Carter. Its purpose, in a nutshell, was to require banks to provide credit to “under-served populations,” i.e., those with poor credit."
"In 1995, Bill Clinton’s administration made various changes to the CRA, increasing “access to mortgage credit for inner city and distressed rural communities,” i.e., it provided for the securitization, i.e. public underwriting, of what everyone now calls “sub-prime mortgages.” Bottom line? It forced banks to issue $1 trillion in sub-prime mortgages."
"But wait: how did it force banks to do this? Easy. Introduce a federal requirement that banks make the loans or face penalties...Way back in 1994, for example, Barack Obama sued Citibank on behalf of a client who charged that the bank “systematically denied mortgages to African-American applicants and others from minority neighborhoods.”
"Why didn’t someone try to stop it? Someone did: “The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago,” The New York Times, September 11, 2003."
"But someone intervened to stymie the Bush administration. Who? The New York Times reports: Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. . . . “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Just read it. Essentially, the Democrats penchant for social engineering will cost us trillions of dollars we don't have, and we're ready to give these idiots a chance to fix this? I will also say that a bunch of Republicans went along with this nonsense for way too long.
I have to go back to a great quote from a Tom Clancy novel: "If you broke your leg, wouldn't you go to a doctor to get it fixed? Sure, but I wouldn't go to the doctor who broke it."
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