Amen!

I’m not a Harvard economist and I’ve been saying the same thing:

CAMBRIDGE, Massachusetts (CNN) — Congress has balked at the Bush administration’s proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the “troubled assets” of financial institutions in an attempt to avoid economic meltdown.
This bailout was a terrible idea. Here’s why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.
This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Update (Val):Here’s a YouTube video that confirms the above. Watch and share.

4 thoughts on “Amen!”

  1. Great video – short + to the point. Just finished fowarding it to friends when my extreme leftist liberal boss walked up and chatted that “this is not the government’s fault.”
    “Each time the govt. gets its hands in something it goes to hell, especially finances,” I commented. The boss smirked – she’s got pictures of herself with Billary above her desk. There goes my bonus, but who gives a rip? She has lost tons of $$$$ in her govt. 401K as a result of tis debacle and still defends these bums.
    There’s got to be something else in that drink besides simple kool-aid mix.

Comments are closed.