To occupiers blaming Wall Street: The major cause of the 2008 collapse is…
The complete and total break down of the mortgage industry. It’s the primary reason you may have lost your home, are underwater with your mortgage, or can’t find a job. It was not Wall Street greed, it was the federal government who tinkered with the rules and screwed it up for everyone.
“Everyone should have the opportunity to own a home.” Hogwash. Even George W. Bush said it.
In short, too many high risk loans were approved, and that process was supported and encouraged by the government. Approval standards were lowered. When not enough high risk, subprime mortgages were being approved by private institutions, the government threatened lawsuits. When that still wasn’t enough, Freddie Mac, Fannie Mae and the Federal Housing Authority (federal government institutions) were lined up to provide subprime loans and buy high risk mortgages from the banks.
My summary above is short, and no doubt it skips a few things, but don’t ignore those issues. Even Peter Wallison’s opinion piece in the Wall Street Journal today doesn’t cover every single reason for our financial crisis, but why are federal government policies routinely ignored or dismissed by the left and the <em>occupiers</em>?
There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.
About the mortgages outstanding…
Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.
Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution.
Please, as you wake up this morning in your tent at your local Occupy-wherever event, fire up your iPad or iPhone and click here to read Wallison’s piece.
The “Community Reinvestment Act” should have been name the “Community Ruination Act”.
Isn’t it funny how Democrats are all “regulate this or that” except when it comes to giving favors (buying votes) from preferred groups.? They destroyed the normal, economically sound rules for mortgages and now we are reaping the results.
The Dodd-Frank Act is the direct result of other Dodd- Frank actions.?
Did their actions?strongarm banks into the sub-prime business?? Yes.?
Was it the right thinig to do?? No.
Did the banks push back on DC?? No.
Did the homeowners do their math?? No.
Time to take responsibility for ourselves.?
Time to consider how our actions effect our communities, state and nation.?
It is painfully obvious that just watching others do wrong, or trusting them to do the right thing,?does not work and is no longer acceptable.?
It is also important to find out why DC is doing what they are doing.
I love how the dem. politicians deflect attention away from themselves by pointing fingers at the very people who pay for their campaigns.? In any other world, this would come back to bite them in their pork-filled butts, but let’s face it…WS and the democrat party have a symbiotic relationship.? Doesn’t matter which democrat broke the law to get a sweet deal from his/her WS buddy, said democrat will continue to get more money to write the legislation to protect their WS contributors (Dodd, anyone?…yeah, he’s gone now, but not after leaving nothing but destruction in his wake).
Ironically enough though, the one thing the whole mess has done is balloon the need for independent contractors and landscapers as the banks are passing down the cleanouts and maintenance of these homes to these folks, many of whom are either self-employed or run small to medium size businesses that employ dozens or even hundreds of employees. It sound cruel, but these folks are now able to make good money on the end result of this crisis, and being an indirect part of that industry, so am I. But I still agree with those who believe if it wasn’t for the government, we would not be in this mess. Seems like no one wants to take responsibility anymore for anything, and that’s sad.
Winnie, Dodd is gone maybe yes but who sits in that seat now? Is there a difference? He may as well have stayed though it did give the chance to actually make a change in this richblue state.
I guess the prominent role of Democrats in the housing crash was left out of the “protester’s” education, much like the address of Soros for their “get the rich guy” demonstrations.
When the wholly owned subsidiary of the US government,Fanny & Freddy guarantee? that a bank will be repaid why shouldn’t it lend to anyone?? Fanny & Freddy must be sold off.
Dave Ramsey for president!!!?