Housing bust has a trail of blame

I’m sure you’ve all heard this comment: “It’s all George Bush’s fault.” From President Obama as much as anyone. I heard it recently from my son’s sister-in-law and, well, I had to set the record straight. I put together this list of actions and inactions which have more relevance to our economic woes. Put them in your pocket and be ready to slap someone in the face with facts.

1. In 1978, President Carter and a Democratic Congress passed the “anti-red-lining law.” It forced banks to give loans in low-income areas even when they didn’t meet minimal loan criteria.

2. In 1998, President Clinton and a Republican House and Democratic Senate repealed the Glass-Steagall Act, which stood for over 60 years following the Depression to make banks keep separate commercial banking and investment banking. (this may have been the biggest issue leading to the 2008 crash)

3. From 2000-2006, mortgages were being written by banks with customers who in no way could have qualified.

4. In 2004, Paulson (not treasury secretary) began promoting mortgage-backed securities which pooled about 10,000 mortgages together in an unqualified commercial security.

5. Freddie Mac and Fannie May jumped on these securities as can’t-miss investments along with 80 percent of the largest banks.

6. In 2006, President Bush requested hearings in both the Senate led by (D) Chris Dodd and House led by (D) Barney Frank, both heads of the Banking Committees, to review what he had learned were irregularities in investments at Fannie and Freddie. They both refused.

President Bush may be responsible for many things, but the market and housing crash of 2008 has enough fingerprints on it to call it a Disaster of Good Intentions. “The road to hell is paved with good intentions.”

Richard Francke

Bartlett