Posted on 03/29/2011 5:31:52 PM PDT by Kaslin
“RINOcrats were overjoyed with the idea that home-ownership would elevate the working class into a more responsible lifestyle because of their stake in the investment. Republicans dreamed that once they start paying property taxes, they might even become Republicans!”
Well Dubya certainly did. You ought to see if you can find his ‘American Dream Downpayment Initiative” speech that he gave to HUD. Every folly known to man is in that speech.
“the bankers were perfectly happy to play because Uncle Sugar owned the risk. That allowed them to build a huge market of securities with which their banker friends got to play, effectively risk free. When it all blew up, they came running with their claim tickets whining about the government forcing them to make bad loans. “
That’s certainly true for the depository institutions backstopped by FDIC. Unfortunately the taxpayer got stuck with a related bill that wasn’t the legal obligation of government, and reveals just how strong the influence of the Goldman Sachs alumni has been in the last three administrations. Some of the mammoth players in the recent bubble were non-depository, the “shadow banking system” of investment banks and hedge funds, not covered by CRA, or any other similar regulation. They were in the subprime game for the high yield paper. Their role dwarfed that of the banks when you add in the derivatives market they constructed atop their mortgage paper. When the bubble popped and Lehman went under, Paulson told Bush that the economy would collapse if we didn’t bail out the big investment houses. And that’s what we did, even though there was zero legal obligation for us to save any of them, including Fanny and Freddie.
Wow!!
This article was great, well worth the full read.
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