Here is a handy timeline of why the housing bubble burst (from a recent FR thread).
» 1977: Democrat Jimmy Carter signs the Community Reinvestment Act, guaranteeing home loans to low-income families.
» 1999: Democrat Bill Clinton puts the CRA on steroids by pushing Fannie Mae and Freddie Mac to increase the number of subprime loans.
» September 1999: The New York Times publishes an article headlined "Fannie Mae Eases Credit to Aid Mortgage Lending," which warned of the coming crisis due to lax lending policies of the Clinton administration.
» 2003: The White House calls Fannie and Freddie a "systemic risk" and the Republican Bush administration pushes Congress to enact new regulations.
» 2003: Rep. Barney Frank, D-Mass., says Fannie and Freddie are "not in a crisis," bashes Republicans for crying wolf and calls F&F "financially sound." Democrats block Republican-sponsored regulation legislation.
» 2005: Federal Reserve Chairman Alan Greenspan voices warning over F&F accounting, saying, "We are placing the total financial system of the future at a substantial risk."
» 2005: Sen. Charles Schumer, D-N.Y., says he thinks F&F "over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world."
» 2006: Sen. John McCain, R-Ariz., again calls for reform of the regulatory structure that governs F&F.
» 2006: Democrats again block reform legislation.
» 2008: The housing market collapses; Democrats blame the Republicans.
THOSE are the people I want to put in jail.