The Root Cause of the Financial Crisis

We have had some debate on the financial crisis in the comments on this blog. There is a new book out, Reckless Endangerment. It shows how the root cause of the crisis was in government. I suppose technically you could say Fannie and Freddie weren’t government agencies-but you’d only be technically correct. They had the implicit backing of the government.

I should point out that while Bill Clinton started the programs, George Bush bought into the “ownership society” as well. He brought enough Republicans along to keep it alive.

The “high tech lynching” comments were directed at Republicans and the Wall Street Journal that tried to expose and derail the program in 2004.

No doubt, bankers, ratings agencies acted badly. But they were responding to government incentives. Those incentives were defended primarily by far left wing Democrats.