It an article about who is really to blame for the mortgage meltdown, McClatchy newspapers point out that all those big-government programs that the right wing loves to vilify are not part of the problem. It was the unregulated private sector that created the problem. As more and more sub-prime loans were made Fannie and Freddie actually lost market share since so many of the loans did not meet the tougher standards under which they operate. Neither was the source of the problem the Community Reinvestment Act. Only commercial banks and thrifts are required to follow CRA rules. Instead it was an army of non-bank lenders that got into the mortgage business, especially the sub-prime business.
So we can't blame this meltdown on the existing governmental institutions. Rather we should rightly blame the forces in our government that failed to act to close a regulatory gap that these non-bank lenders exploited. Who are these slow-to-regulate forces?
Generally every de-regulation Republican should be excoriated for their part in today's mess.
A question for the Congressional candidate debates might be:
According to an article published by McClatchy newspapers on October 11 by David Goldstein and Kevin G. Hall entitled "Private sector loans, not Fannie or Freddie, triggered crisis" [ http://www.mcclatchydc.com/251/story/53802.html ] the cause of the mortgage meltdown was sub-prime loans made by an army of non-bank lenders who exploited a gap in our banking regulations.
Do you think that the supporters of the constant drumbeat for deregulation should share a major portion of the blame for the current financial crisis? As an incumbent, what have you done or failed to do to foster essential financial regulation? As a challenger, what would you do to close both the current gap with it's catastrophic consequences and potentially unrecognized gaps that may be future time-bombs?
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