In a piece entitled “Would the Last Honest Reporter Please Turn On the Lights?” columnist and novelist Orson Scott Card chastises members of the liberal media for failing to report on the sources of the financial crisis we’re suffering through right now…
This housing crisis didn’t come out of nowhere. It was not a vague emanation of the evil Bush administration.
It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.
What is a risky loan? It’s a loan that the recipient is likely not to be able to repay.
The goal of this rule change was to help the poor – which especially would help members of minority groups. But how does it help these people to give them a loan that they can’t repay? They get into a house, yes, but when they can’t make the payments, they lose the house – along with their credit rating.
They end up worse off than before.
This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.
This article should be publicized wide and far! Very well said.