Sunday, October 05, 2008
We Finally Made Thomas Sowell Cynical
WHen you disgust the usually level-headed Thomas Sowell, you've really accomplished something. It seems that the combination of the financial crisis being blamed on the Republicans and the free market when it was in fact caused by the Democrats, threats from them to sue mortgage companies, and regulations on the books which caused the problems we're seeing, combined with the American public's apparent willingness to ignore facts and be fooled by a smooth-talking snake oil salesman was the last straw for him.
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http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html
A lot of good points there. The creation of Fannie Mae and Freddie Mac in and of itself helped to create this problem insofar as it helped to separate those making the mortgages from those who owned the mortgages, which is a terrible idea. What incentive do you have to make a safe mortgage if your company isn't going to keep it? And if the ones buying your mortgages ask you to make more mortgages, even if it's to people who couldn't possibly pay it back, why wouldn't you? You get to make money on the mortgages, and you don't have any real risk.
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