The Cause of the Financial Crisis Was Government Interference
I notice that some people continue to blame "greedy" businessmen and underregulation of the market for the crisis. The idea is that it was they and not the CRA that caused the crisis. One fact adduced in favor of this theory is that most of the bad loans did not go to poor people. That's as deep as the theory goes. It's very shallow, but it gets you to where you want to go: to support for your leftist welfare state and your hatred of free markets.
So, let's rehearse this again. (Prior posts here and here.)
CRA. Must make bad loans. Artificially low interest rates? Why not.
Need to pool risk. FNMA FMAC MBS. Plus CDS/CDO.
Hey. I can dump all sorts of crappy loans into these MBS's! FNMA and FMAC are happy to cover for me. I'll make bad loans to middle class and even richer folk.
I'm making a killing. Flipping houses. Making crappy loans.
All of a sudden: POP! Oh, well.
Now let's go back in time and do this without government interference: without CRA/low interest rates/MBS/FNAC/FNMA.
Ready? Here we go:
Did you miss it? No, you didn't miss anything. Nothing happened. No bubble. No pop.
Let's even stipulate that the government allowed financial institutions to diversify in banking and investment and to get overleveraged. So, what? Nothing happened. It would have been a great world.
But alas, we live in this world, in which government interference is considered normal and in which the bad effects of stupid and immoral businessmen are amplified beyond belief, rather than squelched by market forces. Oh, well, at least it gives the leftists a chance to claim the crisis as a reason for even more government interference.
There will always be stupid and immoral businessmen. It's almost as unavoidable as stupid and immoral politicians. The free market and prudent laws are normally able to crush these people. But government over-interference in the market is not unavoidable. It is purely optional.
Government over-interference in the market kills and ruins lives by the million, yet you continue to support it because you hate the rich, you find in your pseudo-support for the poor (you give nothing to charity) a satisfactory facsimile of moral depth, and because you believe that this time, after all the failures of the last 100 years, a welfare state will finally work. You still believe that Keynesian stimulus will work someday because you hate the alternative: the free market. You still hate the fact that tax cuts for investors stops recessions. In fact, you are so far gone that all you need to dismiss these concerns is to wave your hand at the notion that moneyed forces have raised them. You are so far gone that you are all but satisfied by "that's just health insurance company propaganda" as a retort to every argument against socialized health care. Etc. You really are in quite a state of befuddlement. And you're proud of it.
You should re-examine your beliefs. Start by considering whether they are based upon hatred, rather than fact. Part of the problem is that much of your university education taught you that critical analysis means inventing moneyed interest behind every argument against your leftist ideology. This has crippled your intellect by allowing the muscle that dissects actual arguments to atrophy. You also have lost hold of the notions of the rights to life, liberty, property, free association and contract, and so forth. You have a lot to reflect upon.