'Govt caused the housing crisis and the credit crunch'
An assertion without proof. If you want to have this conversation, you have to prove or at least support that assertion first. It's a GOP talking point, not an axiom.
An assertion without proof. If you want to have this conversation, you have to prove or at least support that assertion first. It's a GOP talking point, not an axiom.
Govt also "encourage" banks to make housing loans that they wouldn't have made otherwise by making such loans a condition of doing other things.
And then there's "encouraging" banks to hold fannie and freddie stock by giving it special treatment for the purposes of capital reserve. That pretty much guaranteed that any problems at fannie and freddie would poison the banking sector.
And let's not forget that fannie and freddie were lying about the loans in their portfolio and in the market in general. Everyone was doing their risk analysis based on fannie and freddie's numbers, which were wrong.
Then there's the small matter that fannie and freddie set a govt guaranteed price level.
The housing market is subject to govt action at so many points that it's absurd to argue that govt action is not responsible.
As far as parties go, I didn't mention Dems or the GOP.
If I had, I'd have pointed out that dems were more active in this, but that repubs were happy to help "encourage" home ownership.
I have been screaming for a long time, that the housing boom and subsequent bust were directly caused by government action.
Thomas Sowell wrote a very interesting and insightful book on the subject ... http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/046...