Posted on 08/24/2026 6:48:44 AM PDT by Pete Dovgan
The commentary in a recent Wall Street Journal by Senator Phil Gramm and Representative Jeb Hensarling did the nation an immense service by dismantling the persistent myth that private market greed and financial deregulation caused the 2008 financial crisis. As they rightly pointed out, inflation-adjusted mortgage rates during the bubble era were historically high, and financial institutions were suffocating under increasingly strict federal mandates, not running wild in a deregulated vacuum.
Yet, for nearly two decades, the public has been fed a completely fabricated baseline narrative. Having served as the Chief Economist at the Department of Housing and Urban Development (HUD) and later as the Chief Economist at Freddie Mac during critical regulatory shifts, and as an expert in securitization—having structured the first CMO with Larry Fink at First Boston, the first CBO with Mike Milken at Drexel, the first unique MBB with Lou Ranieri at Salomon, and later the first CLO—I watched the true mechanics of this disaster play out from the inside. The reality is uncomfortable for the political class: the real crime of 2008 was not a failure of capitalism, but a catastrophic failure of central planning.......
(Excerpt) Read more at mises.org ...
This is why Socialism always leads to Authoritarian Government. With that power, it becomes obvious who is to blame when you 'Run out of other peoples money' and the entire populace suffers. The Socialists don't want to give up power and don't want to be accountable. They use the power to take away the public's ability to fight back, and then they take out dissent.
This is why Socialism, expanding Government, Communism, or whatever you want to call it always ends up with people like Hitler, Stalin, and Mao.
For all John McCain’s faults as a swamp rat he rightly called out the bureaucrats about the risks and of course lispy Barney Frank and his media whores screamed, “muh raycism.” A few years later, exactly what he said happened.
We knew this at the time. The federal mandates were the cause. Giving mortgages to people you know cannot repay is not a good business plan. Government should stay out of the business of business............. ...
First, it's impossible to discount the effects of the Fed's ultra-low interest rates on both mortgages and excessive borrowing at all levels of government.
Second, whatever high-risk mortgages that were encouraged or required by government policy formed only a small part of the vast real-estate boom. No one forced banks to implement policies allowing "liar loans" to any great extent: the lenders did that all by themselves because they could quickly resell the mortgages at a profit into the bond market. In addition, when it would have become plain that mortgage-backed securities had a much higher risk of default than previously believed, the banks hid this information and sold off as much of their portfolios as possible to pension funds, etc., to shove the losses onto someone else.
It was, arguably, the greatest act economic fraud in history, aided and abetted by the Federal Reserve and the US Treasury.
As I recall President George W. Bush also warned about it.
To whose benefit?
So Clinton and crew forced small banks to play this game. Many went bust. And then government bailed the big institutions that buy the government's debt. And this insider is selling the idea that this disaster was driven by the government? Looks to me like Goldman et al made out like bandits.
“No one forced banks to implement policies allowing “liar loans” to any great extent:”
Look up Frank Raines and Fannie and Freddie (government), and the incentive programs.
“As I recall President George W. Bush also warned about it.”
16 times during his Presidency he tried to address it. Frank and Dodd, who sat on Fannie and Freddie blocked it.
McCain was also right about big outside money corrupting elections. Time has show his concerns were true. I’m not sure McCain Feingold was the right solution but the concern is real.
Good job. There goes my post.
Bake the cake , lend to those who can’t repay .
Priorities they tell us.
Feels like war.
Rush was on top of this scandal every day. He was 100% correct, but few outside conservative talk radio heard the truth.
How can you discuss the financial crisis of 2008 and not include the Community Reinvestment Act (CRA)? Perhaps because even google’s AI engine denies the role of CRA in the market bubble. Lies upon lies upon lies.
Back at the time a banker said in the morning one Federal agency would come in pressuring them to make more sub-prime loans, then in the afternoon another agency would show up and tell them their lending policy was unsafe.
I remember the left insisted it was “greedy banks”.
Yes! The CRA was the act that authorized Government to meddle in the Mortgage industry. “Every American deserves a home!” 😏
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