The mob is agitated, but hardly blameless. While the punch bowl -- Alan Greenspan's extremely low post-9/11 interest rates -- was being held out, few complained about cheap loans and doubling home values. Now all of the sudden everything is the fault of Wall Street malfeasance.
I have little doubt that some, if not many, cases of malfeasance will emerge. But what we conveniently neglect is the fact that much of this crisis was brought upon us by the good intentions of good people.
For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac -- who in turn pressured banks and other lenders -- to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity.
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2 comments:
THIS GOV. BAILOUT WILL NOT HELP US THAT ARE STRUGGLING WE NEED JOBS, AND LESS UNEMPLOYMENT, USE THAT 750 BILLION TO CREATE JOBS AND PUT THE PEOPLE BACK TO WORK. THAT IS THE ONLY THING THAT WILL BOOST THE ECONOMY. NOT GIVING THE TOP DOGS AND POLITICIANS MORE MONEY SO THEY CAN CONTINUE LINING THE POCKETS OF THE CEOS' ETC. GET WITH THE NOW AND FORGET WHAT YOU DID BACK IN THE 40'S. THOSE DAYS ARE OVER, THANK YOU, BH , FROM VICTORVILLE, CALIFORNIA
I can't agree that the genesis of the problem had anything to do with "good intentions."
There's nothing well-intended about robbing Peter to pay Paul, especially if Paul happens to be your buddies in Congress, on Wall Street, or anywhere else that will redound to your political benefit.
There's nothing noble about helping even someone fully innocent by jigging the rules and arm-twisting private businessmen to follow them.
Krauthammer and IBD both are being too generous when they declare that Carter's (and, later, Clinton's) intentions were good. That is exactly the type of "idealism" that invariably leads to such, by now, easily predictable fiascos as the present one.
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