The root of the financial crisis
The truth everyone's ignoring
David Limbaugh's column today hits the nail on the head re: what's really at the root of the current financial crisis. (and note I said "financial" and not "economic", but that's another rant) He points the finger of blame exactly where it belongs...government.
More to the point, governmental meddling in the mortgage markets which was in reality just good old-fashioned social engineering.
Free market conservatives understand that many problems have been caused by government's officious intermeddling in the private sector. The subprime mortgage crisis is no exception.
History has shown that liberal prescriptions don't work, but when they fail, liberals invariably not only deny responsibility for their do-gooder manipulation but also insist on even more government intrusion. Think of it as "the hair of the dog" remedy on steroids. ...
Which brings us back to the current subprime mortgage crisis. When we strip away all the complexity, we discover that social planning largely led to this debacle.
Government politicians and bureaucrats forced lending institutions to make un-creditworthy loans and helped create unnatural demand in the housing market by priming the pump on bad loans. This created an unnatural price bubble in real estate, which was securing these ill-advised loans.
When the bubble inevitably burst, the mortgages secured by the artificially inflated real estate plummeted in value, which left us with an epidemic of grossly under-secured loans.
Facts are stuborn things. But the fact that government policy - instigated by Bill Clinton and the Democrats - helped start this crisis is one fact that isn't getting a lot of attention.