I’ve been asking in comments on various blogs why the raters of MBS (mortgage backed securities) were not more on the hook than they seemed to be.
If you have an expert, a supposedly unbiased expert telling you that this is a good investment, should you question their motives?
Read An Expert-Induced Bubble.
I still think that while the creation of Fannie Mae was a good idea 70 years ago, it should have been phased out instead of encouraged to grow. In every instance where its growth has been phenominal, it’s been a Democrat controlled Congress that has spurred it on. Note that I am not blaming Democrat or Republican presidents, but Congress.
Note also, that neither party is capable of always getting its way even if it is in the majority. Everything is ultimately bipartisan to some extent.
Finally, this entire fiasco is a good time to review whether government programs can improve the financial well-being of poor people, regardless their color. It is also a time to examine the playing of the “race card” every time regulation, oversight, or cutbacks are called for.