The free market ideologues wants to pretend this crisis is completely the cause of CRA and congress.
It’s simply not true, the CRA contributed to this, but there is no question the greed in the financial sector cause them to run wild with reckless investments.
“but there is no question the greed in the financial sector cause them to run wild with reckless investments.”
Foolishness! Everyone in the private and public sector is always greedy. That’s axiomatic. The difference between financial collapse and a growing economy is that greed is channeled into profitable (i.e. productive) enterprises in the latter. What makes credit expansion—and government intervention in the market in general—so destructive is that greedy people have no signals to tell them “Stop! Your greed will not be satisfied by proceeding.”
The mafia is greedy, and it can steal your money with a gun. That’s why we have laws against violent coercion. Bankers can steal your money by expanding the supply of money. That’s why we’re supposed to have laws drawing the line past which banks cannot lend.
“there is no question the greed in the financial sector cause them to run wild with reckless investments”
To put my response to this issue less pithily, the reason greedy investors ran wild was because the market was flashing the signal to them that they were earning profits. Bu they weren’t profiting, were they? How could they be so mistaken? Easy credit fooled them. There’s no other explanation. There’s no other reason so many people would make the same mistake in so short a time.