Posted on 12/08/2012 10:50:16 AM PST by SeekAndFind
You are correct. Funny how Greenspan just happened to reign over the dot com boom and bust and the housing boom. The commodity boom in 2008 was the latest, but it won’t be the last.
You keep ‘telling me’, but the eventual excesses—with banks bundling knowingly bad loans into inaccurately rated securities—developed out of and after banks were forced to lower their lending standards.
And Bush was right in there ignoring and encouraging it as that got worse and worse. You are being willfully or otherwise ignorant here.
The CRA certainly did force banks to make loans that they didn’t want to make. Banks were merging and acquiring like crazy through the whole period and if they didn’t have an exemplary CRA score they wouldn’t get their acquisitions approved. In actuality, banks had to fork out bad loans.
Also, the FDIC was requiring banks to drop traditional lending requirements that had disparate racial impact. That was forcing banks to make bad loans.
government debt/gdp 1945 / 2008
compare private debt / national gdp levels of 1929 and 2008
both 300$
government stepped in a made the banks whole as promised (moral hazzard)
Shoddy subprime lending expanded due in large part to federal housing regulations that institutionalized "flexible" mortgage underwriting standards for loan originators and government-backed mortgage giants Fannie Mae and Freddie Mac. And they, under pressure from Congress and their Housing and Urban Development "mission" regulators, wound up underwriting nearly half the risky subprime and other nonprime mortgages outstanding, fueling the financial market for subprime securities... the historic housing bubble that burst in 2007... began 10 years earlier in 1997 -- under a Democratic administration. The easy-credit orgy that took place over that decade was fed by federal housing policies designed to pump up homeownership rates. It had a name: the National Homeownership Strategy.
All true (read Morgenson and Rosner’s “Reckless Endangerment” for the whole gruesome story) - but I’ve never heard one prominent Republican stand up and assert the falsehood of the blame of Bush, including Romney in the campaign when he was accused of wanting to return to the “failed policies” of the last administration - pathetic......
Agree - he made a number of attempts to get them to rein in Freddy and Fannie, but he never told the People what was going on or what it would cause. he should have said what it was and let them continue with the "Freddy/Fannie are fine" BS like they did until about 6 weeks before it crashed. A little publicity and warning would have gone a long way instead of letting them own the narrative.
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