Alan Brochstein

Forget the Moral Outrage: Just Restore the Mortgage Markets

User 257229, you make an excellent point, but I am afraid that many who read your words won't understand where the greed was. It was all through society. We must ask ourselves how the root cause of this problem, easy money, came to be. Why were standards relaxed? Who was on watch when Fed Funds were kept so low for so long after 9/11 (that would be Alan Greenspan). FNM and FRE executives were culpable as well, as they have to plead stupidity as a defense. Did they honestly think that they could employ as much leverage as they did and always have access to capital? I don't believe that they were any different than the folks at LTCM or any number of other leveraged companies that have blown up - they believed their sheet didn't smell.

The greediest of all, though, were the Democrats and Republicans. The status quo, which is what keeps them in power, was nothing but helped by the easy money policies. The regulators for which they were responsible failed. People who actually knew the GSEs were always aware of the chink in the armor, but it was always a game of confidence in how and when the government would honor its commitment. I believe it is disgraceful to end this charade by trying to accuse FNM and FRE for causing the problem. The government should be honest in assessing its own culpability.