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Tuesday, September 27, 2016

Did Fannie And Freddie Really Cause The Financial Crisis?

Jonathan Weil disputes the notion that Fannie Mae and Freddie Mac were the sole actors responsible for the 2008 financial crisis in his column, Financial Crisis Narrative Flunks Reality Check:”

If you and I were in a bar together, and you suffered a nasty bump on your head when I accidentally whacked you with a pool cue, there probably would be no disputing that my action caused your harm. But for my careless swing of the stick, the injury wouldn’t have happened.

  • rustacus21

    … but they sure didn’t help it! Whatever proponents of smaller government really meant by their support of the previous (2001-2009) administration, they seem befuddled as to the consequences! W/the results being a total absence of regulation & corporations, government agencies & contracting individuals making up rules as they went along (see tale of Bernie Madhoff & book “No One Would Listen”, by Stephen Markopolos) & in the results replicating Reagan administration economic catastrophe’s, what else could be expected? It was a scam from start to finish, offering mortgages, which had a rate change provision which jacked up the premium, to bundling huge packages of mortgages & selling them as derivatives “investments” to the unlucky suckers here in the states & overseas, who only saw $$$ – not “danger” signs, when they were sold a financial product that only a phD calculus professional could understand or explain! Unconscious regulators, meanwhile, weren’t too out of to profit from payoffs, which guaranteed, as long as they (regulators) looked the other way, the gravy train would continue bring their “payoff” cash!!! Only a Conservative doesn’t get the “Occupy” initiative, in lite of this history. & yet, of the billions that “walked away” from the economy (via the Fannie/Freddy disaster), a 164.4 billion that more than likely won’t be repaid, none of the criminals responsible or those who profited, have been charged. This still pales in comparison, to the theft of investment savings, from institutional accounts, which, likewise, has evaporated w/out a trace! B4 any movement is made on whether or not these institutions are able to resume business as usual, strict & non-negotiable oversite regulations MUST be in place, which will not be subject to political whims or pressures. This means Liberal/Progressive legislators will need to shore up the courage to tell bratty Conservatives “NO WAY” to any future changes in these laws. Weak, vacillating & compromised Democrats were responsible, as much as Republicans, in turning back Depression-era oversite, which kept multiples of industries free from corruption, theft & graft for over a half century. But it was an illiterate, uneducated, vacant Conservative American public that slept thru the the 2nd worst economic crisis in American history. They too, share blame for the fundamental causes of the 2001-2008 spiraling toward disaster. A public that must be overwhelmed at the polls from now on…