By Lonely Conservative
It wasn’t bankers who came up with the idea of the Community Reinvestment Act. But of course, once the federal government started backing subprime loans, why wouldn’t they have taken advantage, especially since they weren’t really given much choice? Even still, according to Investors Business Daily, banks and Wall Street (Country Wide in particular) were only responsible for 29% of the subprime “toxic loans.” Washington, DC was directly responsible for the other 71%.
But based on the number of toxic loans in the system in 2008, the government was responsible for not just a simple majority, but more than two-thirds. It’s quantifiable — 71% to be exact (see chart). And the remaining 29% of private-label junk was mostly attributable to Countrywide Financial, which was under the heel of HUD and its “fair-lending” edicts.
To be fair, the blame-Wall Street narrative has cemented in the public consciousness, and is hard to crack. That’s because in the wake of the crisis, the Obama White House and Pelosi-Reid Congress engineered a cover-up of Washington’s role in the mess through the Democrat-led Financial Crisis Inquiry Commission. The national media now defer to it as the final authority on what caused the crisis and ensuing recession.
“The FCIC’s report put the majority of the blame squarely where it belonged: on the shoulders of the Wall Street executives,” Bloomberg News opined.
Read the whole thing.
Say Anything put it into simpler terms.
The politicians decided to make housing an entitlement, so they lowered lending standards and subsidized loans to people who shouldn’t have gotten loans. They built a house of cards, and ultimately it collapsed.
Via Maggie’s Notebook, where you can also find a recent history of the subprime mess and the government’s direct involvement. Here’s a little hint: It wasn’t the Democrats who tried to do something about it.
No comments:
Post a Comment