Dear Republican co-workers in the next cube over, please stop pushing the lie that the current economic collapse was caused by Fannie Mae and Freddie Mac giving out too many loans to “low income” Americans. It’s not true, and as McClatchy points out, both the Federal Reserve Board data and the President’s Working Group on Financial Markets disprove that lie pretty conclusively.
The financial collapse was triggered by lax lending practices by private lending institutions; only one of the top 25 sub-prime lenders was subject to Federal guidelines against discrimination. It’s pretty simple, really. And if I’m using too many big words, when I say “lax lending practices” I mean that the private lenders weren’t being regulated, nor were the regulations being enforced. Hmmm… deregulation… who pushed for that? Oh, right, that was a Republican thing. And who enforced (or didn’t) the regulations? Oh, right, that would be the President.
Since the Federal Reserve Board data shows that the primary timeframe for private sub-prime loans was 2001-2007, when the Republicans ran both houses of Congress, and President Bush sat in the White House.
Fannie Mae and Freddie Mac don’t loan money themselves, either, my fine Republican co-workers. They purchase loans that were pre-qualified by those private lending institutions. You know, the ones that were giving away loans to anyone and everyone, then passing the shitpile on to others. If those private institutions are lying to Fannie Mae and Freddie Mac, and there are no penalties for lying, clearly the moral responsibility lies on those institutions, right? And if poor people who, under normal circumstances, would not qualify for home loans were given those loans anyway, again, the blame lies with the lenders.
But the lenders are still escaping the consequences for their actions in creating the bubble. Must be nice to be rich these days. I mean, the people who were given loans they couldn’t afford are still on the hook for paying those loans off. And taxpayers get another hit by paying for the $700 billion bailout on top of that.
Don’t get me wrong, I have no love for the current Congressional leadership pushing through the bailout. But that’s a whole ‘nother issue.
Oh giggling Republican co-workers, whispering conspiratorially in the next cube over as you watch some YouTube mash-up that, in your mind, implicates Speaker Pelosi and Rep. Barney Frank in causing the current crisis… you are so wrong. So sadly wrong.
So stop trying to blame the current crisis on Democratic Congresscritters who had no power in the last 8 years, stop trying to push the blame back onto President Clinton, and, honestly, seriously, stop trying to blame this on poor people. It just sounds… well, ignorant… when you do that.