Posted on 01/25/2009 8:47:56 AM PST by wartman
Weve all heard it. In the last couple months, the refrain of deregulation and lack of government intervention caused the financial crisis were currently working through. However, a quick look back shows that this wasnt the case. In fact, its pretty clear that the real cause is the exact opposite: the crisis was caused by too much government intervention.
The fairy tale usually goes like this: greedy financial companies gave unfair subprime loans to borrowers who couldnt qualify for standard mortgages and hid in the fine print the real terms of the mortgage in an attempt to fraudulently enrich themselves.
There are so many logical fallacies and outright laughable stupidity in that above fairy tale its almost hard to take seriously anyone who actually believes that. But, Ill try.
1) The first fallacy that needs to get out of the way is that the mortgage companies handed out the subprime loans because they didnt care whether the person would be able to stay in the home or not. That idea shows a strong ignorance of the way credit institutions work. No one wanted the borrowers to stay in their homes more than the lending companies. If the mortgage goes into default, the lending company stands to lose a lot of money. Foreclosure is a losing proposition for the lending company.
2) The subprime loans were given out in the first place because the Democrats demanded it. This is a historical fact. It shouldnt be hard to follow the logic:
* Democrats demand that poor borrowers be given access to mortgages. * Because they have poor credit, these borrowers cannot qualify for standard mortgages. Hence subprime interest rates. * The banks then bundle these mortgages into securities which are purchased by a government sponsored entities nicknamed Fannie Mae and...
(Excerpt) Read more at jeffwartman.com ...
I wasn’t sure you got this link of Bush pushing these crap liar loans to millions of unqualified minorities.
http://www.youtube.com/watch?v=eW9viaJatpo
Arguing the fine points about how all this happened is a bit like re-arranging the deck chairs on the Titanic just after the she hit the iceberg.
Argue about how to fix...and how fast!
People are hurting out here; it doesn't help them/us a damn bit to know why it happened....
It sure as heck would help if you would argue the immediate fix to the problem.
> What Caused the Financial Crisis?
The Politically Correct Culture caused the Financial Crisis!
Loaning to people who have no business getting a loan just because they are a bad risk.
I blame the Feds 30% and that means Franklin Raines, Fanny and Freddy, Chris Dodd, Barney Frank. I also blame GW and his administration for not regulating CMOs and derivatives. Alan Geenspan can be blamed for an insane easy money policy
70% of the blame goes to Wall Street and bankers. They did the most damage with their exotic new derivatives. Some of them should be stripped of their riches and sent to prison
Some of them should be stripped of their riches and sent to prison.
Morally, I agree 100% Constitutionally ain't gonna happen. That unfortunate clause about "ex post facto laws". It appears most of these guys broke no laws at the time, and we can't pass laws now to make what they did then ilegal.
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