Oh, it's a just a whole hell of a lot more complicated than that. The really big threats came from big banks anxious to keep their subprime accounting tricks going as long as possible, and to keep up their oh so profitable derivatives game. The government SINCE 1999 has been quite anxious to keep the charade going as well, since housing and bubble equity was the one shell game that made the economy look like it was growing.
This article, from NINE YEARS AGO, is floating around the right wing blogosphere a lot, accompanied by pretty clueless commentary. Do people really think that if what this program became (and it changed significantly from a program that was simply designed to help more people buy a home) wasn't making bushel barrels of money for the people who helped keep a certain political party in power for most of this last decade, that it would have been allowed to remain?
What the hell has been going on the last nine years? Has there been anyone at the helm?
>wasn't making bushel barrels of money for the people who helped keep a certain political party in power for most of this last decade, that it would have been allowed to remain?
Exactly right. Bush did try to push some sort of regulatory scheme back in 2003 which may have prevented some of this, but a certain political party prevented it.
"Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing."
The difficulty in this situation is that the Dems had a lot to gain by opposing regulation, while Republicans would gain very little by pushing it. So why waste political capital? Also, think about the narrative:
Anti-regulation: We want to help low income and minority homeowners.
Pro-regulation: We need to reduce lending to higher risk borrowers because someday in the future, house prices might not go up, and that would be bad because [insert all sorts of technical words here].
"The really big threats came from big banks anxious to keep their subprime accounting tricks going as long as possible, and to keep up their oh so profitable derivatives game."
Would these be same "oh so profitable" banks that are currently going backrupt?
"This article, from NINE YEARS AGO..."
Ummm, that makes the article all the MORE powerful, not less. Points are awarded for predictive power, the further in advance and the less conformist the thinking the better. "Conformist thinking" meaning "everything your professors, the mainstream media, the teacher's unions, and Hollywood shove down our throats.
"wasn't making bushel barrels of money for the people who helped keep a certain political party in power for most of this last decade,"
Finally, we are agreed. See my reply to powellb above. I didn't mention the names or the political affiliation of the top six recipients of donations from Fannie and Freddie. Strangely, you didn't either. Nor did you mention the name of the Congressional Caucus that has pushed this emtire mess on us from day 1. No need to link to it, in any case. It will be showing up in TV ads soon enough.
