When it comes to setting public policy fires, Democrats get away with serial arson. A maladroit opposition party and a complaisant media ensure that the public will never pin the tail of blame on the donkey. Nowhere is this more evident than with interventionist housing policy.
Decade’s worth of government intervention in the housing market almost single-handedly took down the economy. Bill Clinton’s National Homeownership Strategy did to the housing sector what Obamacare will do for the healthcare sector. His administration created entire offices and programs dedicated to forcing banks to underwrite risky mortgages under the dubious goal of universal home ownership. Concurrently, Fannie Mae and Freddie Mac bought up the lion’s share of the subprime mortgage securities and fueled the toxic asset bubble. The bubble popped, bringing down the entire economy with it.
Instead of learning from the deleterious effects of “fair lending” and universal homeownership programs, Obama has juiced up the goals of the Community Reinvestment Act that underwrote risky loans. (emphasis added) …To Read More…..
Editor’s Note - You may wish to read my commentary entitled; Sub-Prime Pest Control, which deals with this issue later in the article. The patterns are the same even though the headline is different.