Ray at Commonsensepoiltics.blogspot.com writes in a thread about economic policy:
....I agree about the whole credit card deal, but you can't tell me that gov. policy had nothing to do with that. When the federal government dictates to lenders that they have to extend credit to some who have not earned it, you get massive credit defaults. Thats what happened in the housing market, it happened in the credit crisis, and it will not change unless the regulations mandating poor credit practices stop. I also believe that the individual took advantage of these poor policies and therefore once again proved that when the government intervenes in the free market it will most likely be disasterous.
Come on, dude. This flies in the face of reality. Fannie and Freddie made loans targeted to low-moderate income people but those were NOT the subprime, easy credit loans. The overwhelming problem was regular housing loans that turned into a credit free for all. Those loans, many of them subprime, were then packaged, sold and borrowed against on Wall Street and beyond. It was basically a get rich quick ponzi scheme. Is THAT the government's fault? Makes sense that tighter controls and regulations might have prevented that. Conservatives have to take SOME responsibility that an unregulated, or deregulated lending and financing system create this mess. Even some conservative economists are readjusting their views in light of what happened. This New Yorker article is a fascinating take on the shake-up in conservative economic intellectual thought in light of this recession.
Fox News and Republican talking points point to Fannie and Freddie mortgage companies as causing the problems. Here's a good article that says they might have played a small role but that far greater role was the bad lending practice, and the securitization of those loans, that caused the problems.
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And why do you think these guys were able to take advantage of all of these bad lending practices? Because the government made it easier for them. I agree that some of the lenders were lending with bad intentions, but to wipe the slate for the gov. is to turn a blind eye.
C'mon dude, Freddie and Fannie were/are the largest holders of the sub-prime loans! Who do you think they sold those packaged loans to! Besides the rest of the world!
Clinton was the one who relaxed the regulation regarding credit ratings.
AND
The low interest rates drove prices through the roof! Along with creative financing!
Then
The party was on and the Speculators/builders, Bankers, Realtors, buyers and Wall Street just inflated it till it burst!
C'mon man where's the Love!
Btw: They didn't want it to end to soon so they started refinancing those loans at the newly inflated/ appreciated values and taking the cash out of the equity value. (Used their homes as ATM's)
But the best part is it wasn't the creators of the mess that took the hit - it was the homeowners and the taxpayers.
Those "Buzzards" at the top are still circling!
David,
Do you even remember the S&L bailout?
When speculators, realtors and lenders ran wild on Commercial Property Developement?
They built buildings that had no tenants and drove land prices Sky High!
The savings accounts of the S&L's had to be rescued by the FDIC!
(Taxpayers to the rescue)
But, it was nothing compared to this Housing Bubble!
Once again Junior lives on the Planet of Denial.
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