Let’s see.
First, the government forced the banks to issue loans they should not have made.
Second, they removed the risk.
Third, they manipulated interest rates to enable reckless purchasing.
Without government coercion and government guarantees and government interest rate manipulation, this never could have happened. Nothing would have induced the bankers to create such risky financial instruments had not the government with the aid of the Fed forced them, and protected them from the risks capitalism requires – and without those instruments, the scheme to provide homes to people who had no business taking out a loan would have failed.
Too little regulation? Give me a break. The whole affair was regulated from the get-go, using the banking system which itself is one of the most regulated industries in the country. Even now, after the meltdown, evil legislators are still trying to revive the housing giveaway. And will someone explain to me please how is this all the fault of the evil bankers?
2 comments:
It's their fault only to provide cover for the politicians. The politicians create the problems and then they have to fix the problems. It's a never ending cycle. It's somewhat like upper management in a large company.
RKL
Upper management - I hear ya bro- In England these guys management dudes are called "the bright sparks upstairs"
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