Government to blame for Wall Street collapse
Sunday, October 5, 2008 at 09:15AM For the past two weeks, the running joke has been something to the effect of "capitalism for profits and socialism for debt".
Nothing could be further from the truth, as evidenced by this devastating piece in the Sunday New York Times about Fannie Mae and Freddie Mac.
The Times lays out what others have been saying for a long time: It was Fannie and Freddie, at the insistence of Congress, who enabled (some would say mandated) these insanely risky mortgage loans. There is no way -- no way -- that these ludicrous loans could have been made were it not for Fannie and Freddie, and some were raising alarms about this as early as 1999.
Every time a red flag was raised, however, the Democrats in the Congress -- led by Senator Chris Dodd -- would have the criticism snuffed out, until finally Fannie and Freddie collapsed under its own weight of bad loans two months ago.
When the history of the bailout is finally written, it will show Fannie and Freddie (along with artificially low interest rates -- thank you Alan Greenspan) as the primary culprits.
Reader Comments (3)
You can try to overplay the 90's to a point. Don't forget Phil Gramm pushing through a 200 page rider on an 11,000 page bill on the last day of the lame duck session, 1999. That's where the loopholes that limited transparency for subprime loans began.
Fannie and Freddie deserve some blame, but they were playing catchup with Wall Street. Under the Bush administration FF became one of top, if not the top sources of lobbyist money in Washington. Seems weird that a GSA would be spending that kind of money on lobbying. But if you wave money in their faces, they can't see what you're doing.
Lack of transparency and regulation are the killers in this crime story. Where was the SEC when Moodys and the other rating firms started shirking their responsibilities and gave these toxic instruments superior bond ratings? That's another bad guy, and there are others. But it's late and I'm tired.
Very cool article! Your article is very professional. I can’t agree you any more. The article fills my mind with knowledge and gives it a compass so that that knowledge doesn’t go to waste. I admire your work! Discount Louis Vuitton Handbags Thanks for your work and have a nice day!
<h1>replica designer bags</h1> Affordable bags
<h1>replica designer handbags</h1> Come ah
<h1>air max 2012</h1> Favorites
<h1>nike shox turbo</h1> Discounts and more
<h1>men puma shoes</h1> Online Sales
<h1>air max 90</h1> Wholesale sales
<h1>wholesale puma shoes</h1> Wholesale sales
<h1>puma shoes sale</h1> Look comfortable
<h1>timberland mens boots</h1> Buy comfortable
<h1>gucci women shoes</h1> You are wrong?
<h1>louis vuitton outlet</h1> There must you like