So You Want To Know Why We Are In This Mess?

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If you are wondering why the housing credit crisis happened, and the implicit role the government, media, and press played in it, please read this editorial by Paul Gigot at the Wall Street Journal.

He and his staff have been on this story since 2001. That is right, 2001. While the rest of the media and government kept it bottled up, he has been trying to expose the corruption and waste that has been coming out of Fannie Mae and Freddie Mac.

The abiding lesson here is what happens when you combine private profit with government power. You create political monsters that are protected both by journalists on the left and pseudo-capitalists on Wall Street, by liberal Democrats and country-club Republicans. Even now, after all of their dishonesty and failure, Fannie and Freddie could emerge from this taxpayer rescue more powerful than ever. Campaigning to spare taxpayers from that result would represent genuine “change,” not that either presidential candidate seems interested.

Read the whole editorial at WSJ.com

Related posts:
  1. Will Fannie Mae and Freddie Mac Need Federal Intervention?
  2. Criminal Probe of Fannie Mae and Freddie Mac???
  3. For Those Who Forget, How We Got Into This Mortgage Mess
  4. Feds Seizes Control Of Fannie Mae and Freddie Mac
  5. Fannie Mae and Freddie Mac Face Market Turmoil

There Are 5 Responses So Far. »

  1. That is quite a lengthy investigation and story to be following since 2001. Thank you for all of the good information.

  2. Great article. From what I have seen here in Miami, if lenders simply required 20% down and verified income and assets, we would not have too many problems. The lenders approved of everything.
    http://www.southptc.com/

  3. is this the present day scenario? thanks for the info.

  4. Inflation remains an extremely challenging problem for the world’s central banks. In addition, the financial shocks to the world’s banking systems resulting from house price falls remain to be worked through (historically, most banking system collapses around the world have been caused by falling house prices).
    Until these financial systems feel more confident that their problems are behind them, loan volumes are likely to fall. Therefore, it seems likely that the world’s house price momentum will continue to go down.

  5. This is a very good and helpful information.

    Thanks!

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