What Caused the Financial Crisis? John Hinderaker of Powerline Explains

Powerline has an excellent article (by John Hinderaker) that should be bookmarked for future reference.  He is saying what I have said, many times in this blog:  the financial crisis was caused by Congress, forcing banks to make bad loans.  Liberals and Democrats, of course, like to blame the banks for the financial crisis, but banks were largely the victims of governmental interference in the housing market.  Hundreds of banks failed following the bursting real estate bubble, which in turn was caused by the easy mortgage credit.

Hinderaker writes:

The financial crash from which America is still struggling to recover was, of course, reasonably complex. But the basics are not hard to understand: the federal government wanted to increase “access” to home ownership by encouraging banks to make loans to underqualified buyers–what would traditionally have been called bad loans. The government used a carrot-and-stick approach. The stick was constant pressure on banks to show that they were not “red-lining” but rather were taking their share of risk with respect to home loans. The carrot was Fannie Mae and Freddy Mac, who reassured banks that they could make bad loans without fear of the usual consequences, since those government-sponsored entities would take them off the banks’ books.

Liberals have tried to revise this history, but, as Conn Carroll writes in the Examiner, the facts are the facts...

Read it all here.

Yes, the economy tanked as the plunging real estate market spread financial disaster throughout the economy like a tidal wave.  People who lost their jobs and homes as a result have the government to blame, or more specifically, the Democratic Party, who continually seeks new ways to "spread the wealth," often with disastrous results.  The bad news is that Obama is still pushing banks to continue making these bad loans.

 Young college grads who see bleak prospects ahead should not protest the banks, they should protest the federal government, and vote to turn the social engineers out of Congress.  In other words, vote Republican.  The Republican Party is far from perfect, but it is a step in the right direction for all those who desire economic opportunity, economic growth and prosperity.