The housing bubble was created by reducing prudent lending to a joke, so risky borrowers could buy houses that eventually they were unable to pay for. This was Democratic Party legislation that can be blamed on every legislator that voted for it, because they voted for it not to help the poor, but to get votes from the poor. POR should also include F&D (Franks and Dodd, both of whom have made such valuable contributions to the destruction of the economy.
This is only partly true. The CRA and the behavior of Franny definitely had significant impact on the bubble. However, they were not the only cause. The securitization of mortgages led to a severe agency problem because the people selling the mortgages to borrowers no longer had a stake in the likelihood of the borrower paying it off. Furthermore, changing the rules to override state anti-gambling laws enabled the totally bogus Credit Default Swap industry, which is the most significant enabler of the whole thing. That law was passed under a Republican congress (sponsored by Graham) and signed by Clinton.
There is plenty of blame to go around, but laying it all on the Democrats, when Republicans controlled the congress the whole time, and the executive for a critical 8 years of the time is simply wrong.
For the record, I’m a conservative republican.
I just don’t like stupid spin – even for my side.
