"Anatomy of a Crisis:2008"

Milton Friedman once wrote:

"The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy."

Let's sort our current economic crisis out one point at a time.

First question: Who started this mess in the first place? Answer: The Government.

While blame does fall on both sides of the coin, the ball started rolling during the presidency of Jimmy Carter. Carter created something called the Community Reinvestment Act (CRA), which was intended to increase minority home ownership. The CRA bill was later revitalized by Bill Clinton, who forced Fannie Mae and Freddie Mac to make bogus loans. This is explained, in part, by Terry Jones, writing for Yahoo! News: .

“One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market?
The answer is: President Clinton wanted it that way.
Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be.
In 1977, while President Carter signed the Community Reinvestment Act (which pushed Fannie and Freddie to aggressively lend to minority communities), it was Clinton who supercharged the process. After entering office in 1993, Clinton extensively rewrote Fannie's and Freddie's rules.
In doing so, Clinton turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocks and handed favors, jobs and money to political allies. This potent mix inevitably led to corruption and the Fannie-Freddie collapse.”

Jones continues:

With incentives in place, banks poured billions of dollars of loans into poor communities, often "no doc" and "no income" loans that required no money down and no verification of income.
By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market -- a staggering exposure.
Worse still was the cronyism. .
Fannie and Freddie became home to out-of-work politicians, mostly Clinton Democrats. An informal survey of their top officials shows a roughly 2-to-1 dominance of Democrats over Republicans.
Then there were the campaign donations. From 1989 to 2008, some 384 politicians got their tip jars filled by Fannie and Freddie.

If you are looking for further proof of Clinton’s direct involvement, look at the following article, written in 1999, about Clinton’s (then) new housing plan. The smoking gun reads as follows:

“Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”

Clinton’s objective: Loan Affirmative Action.

This is what Clinton’s Secretary of Housing and Urban Development, Andrew Cuomo, described the bill as being in no uncertain terms.
Our nation’s lenders were forced into “loan affirmative action” by the Clinton administration, which is the initial cause of the current economic crisis.

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