The bank mess 156
Who is to blame for the sub-prime disaster?
People who promised to pay more for their houses than they could possibly afford.
And the government.
Thomas Sowell goes to the heart of the matter in an Investors Business Daily article today.
Here’s an extract to whet your interest:
It was government intervention in the financial markets, which is now supposed to save the situation, that created the problem in the first place.
Laws and regulations pressured lending institutions to lend to people that they were not lending to, given the economic realities.
The Community Reinvestment Act forced them to lend in places where they didn’t want to send money, and where neither they nor politicians wanted to walk.
Now that this whole situation has blown up in everybody’s face, the government intervention that brought on this disaster is supposed to save the day.
Politics is largely the process of taking credit and putting the blame on others — regardless of what the facts may be. Politicians get away with this to the extent that we gullibly accept their words and look to them as political messiahs.
