As someone who has worked on the front lines of the housing debacle, and has seen - close up and personal - how too many people's lives have been sorely harmed by it - I still remain convinced that its creation had many sources.
Nevertheless, too many people pin all or most of the blame on banks. They played a role, but assuredly, the role of Congress was much deeper and critical to what happened. Ed Morrissey of HotAir expounds.
By this time, everyone should be aware of the federal policies that precipitated the housing bubble and its collapse — the push by Congress and two administrations to push higher-risk lending in order to expand home ownership, as well as the effort by Congress to get Fannie Mae and Freddie Mac to spread that risk through mortgage-backed securities. While Wall Street made the situation worse by developing risky derivatives on those securities and failed to recognize the risk inherent in the securities themselves, the collapse wouldn’t have occurred at all had the federal government not intervened to distort lending for their own social-engineering goals.
“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t gave gotten them without that.
“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.”
Bloomberg went on to say it’s “cathartic” and “entertaining” to blame people, but the important thing now is to fix the problem.
Some of this may well have been due to "good intentions." Still - those "good intentions" created a nightmare for millions.
And, as Bloomberg states - now we have to focus on the best resolution. Camping out on Wall Street and around America, making more of a mess for cities to clean up and harming small local businesses is not exactly helping anything.....