The government is to blame for this financial crisis. But wait, wait, wait, wait. Before you put this all on the Republicans, let’s get some history and some facts together.
- 1995 - Community Reinvestment Act - Clinton changed the rules to force loans to inner city and distressed rural communities. The new rules forced the increase of home loans to low and moderate income borrowers, the majority of which were sub-prime. hmmmmmmmm
- 2003 - The Bush Administration sought to create an agency to oversee Fannie Mae and Freddie Mac. The proposal was shot down in congress. hmmmmmmm
‘‘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.”
- 2005 - The Federal Housing Enterprise Regulatory Reform Act of 2005 was introduced by John McCain in the Senate. The bill would have increased government oversight of loans given by Fannie Mae and Freddie Mac. It was shot down in congress. hmmmmmmm
Ok, so this can’t be put on the Republicans, although the liberal press will try, so that leaves who? hmmmmmmm. Yes, Yes, those angry socialist Democrats who think big government is the answer to everything. This is just a glimpse of what will happen if the Democrats end up with control of the White House and Congress.
But don’t think I’m letting off the Republicans, they could have voiced their opposition more vigorously and the chairman of the SEC should have forced the disclosure of these bad loans by the banks.
This meddling by the government can be summed up by two economists.
- Economics professor Stan Liebowitz writes that banks were forced to loan to un-credit worthy consumers with “no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.”
- Economist Yaron Brook concluded succinctly, “The Government Did It:” through the stick of the CRA [and] the carrot of Fannie Mae and Freddie Mac, the fed created the mortgage market debacle.
Where does this leave us? We the tax payers are forced, with the emphasis on forced, to bail out private businesses. This is the result of big government. This is not capitalism.
Think about it.