Today’s Washington Examiner posted an editorial on how we got to the subprime mortgage mess.  This subject is also explored in a YouTube video called “Burning Down The House”, which I have linked to in previous posts.

The Washington Examiner points out that the mismanagement of Fannie Mae and Freddie Mac combined with the obstruction of Congressional regulators played a major role in creating and bursting the housing bubble in the early 2000’s. 

The article points out:

“Rather than offer a serious discussion of how to reform the two government-sanctioned enterprises (GSEs), however, President Obama and the Democratic leadership in Congress are only offering legislation to punish bank CEOs and stiffen regulations for private sector banks.”

The problem had more to do with the government interference with borrowing standards of the banks than it did with the banks.  When community organizers began showing up at meetings of bank stockholders to protest that not enough money was being lent to people who could not pay it back, the problems began. 

The article concludes:

“So now the question is whether the FCIC (Financial Crisis Inquiry Commission) will name names in its forthcoming report of those in Congress and the executive branch who protected and advanced Fannie and Freddie, at grievous expense to American taxpayers.”

 

Every American was affected in some way by the misbehavior of Fannie Mae, Freddie Mac, and its Congressional overseers.  It would be nice to see the truth come out!