I’ve studied the collapse at length and found that the government and the Fed set up conditions for the low life of finance to come out of the woodwork. If capitolism had been left alone, banks would never have started making loans they didn’t want to make. Progressive thought said that the poor should be able to buy homes. The problem was that banks would not lend them money because they wouldn’t be able to make the payments so Clinton told the banks they are violating discrimination laws and had better start making those loans or face severe penalties. At the same time, Fannie announced it wanted to buy sub prime….also because of congress which required Fannie and Freddie to have 30% of its portfolio in sub prime and another 30% in inner city loans. That is what started got the decline in lending standards and the rising of predator lenders. Yes, finance does need regulation, but not the kind we’ve seen.
May 31, 2017