Ed State

An Open Letter to Congress on the $700B Paulson Bailout Plan

@CM: 1000% agreed... my point was not to let Bush off the hook, but to point out how and where this big bad ball got rolling: Clinton, his HUD, his Freddie and Fannie, and mortgage quotas that went AGAINST free market common sense.

Although, to be fair, the only half-assed attempts at "addressing" parts of this problem in the last 10 years were by Reps.

An Open Letter to Congress on the $700B Paulson Bailout Plan

Guys, the *root* cause was Clinton's insanely aggressive "minority home ownership" quotas of the early 90's, essentially forcing banks to abandon age-old SELF-IMPOSED credit risk limits. Freddie & Fannie were then quickly rejiggered to "back" the resulting subprime loans. The Glass-Steagall repeal was passed by congress 90-8-1 in '98, which allowed the securitization of the bad paper, finally getting it off the banks' books. But what you call the "root cause", Greenspan overly ducking the fed rates (whetting the world's appetite for mortgage CDOs, in lieu of decent US Bond returns), was merely the final, high-level agitator.