A Republican Congress in both cases. Note that a bubble and a crisis never happened during the time those Carter and Clinton were in charge, nor for Reagan or Bush I either. The CRA banks had to operate within standard lending practices because of regulations. Then the Republican Congress and Executive oversaw the 21st century deregulation including removing most of the regulations of the CRA in 2005. That was when the mortgage crisis began to get out of control.
"It's telling that, amid all the recent recriminations, even lenders have not fingered CRA. That's because CRA didn't bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA -- or any federal regulator. Law didn't make them lend. The profit motive did." That's a nice blogging quote. Honestly, i do not know all the tiny financial details, exotic derivative vehicles, etc.., have not read all the regulations, deregs. Just highlights and summaries in passing. I have just a bit more than cursory knowledge on this whole fiasco. But as always, i have, an opinion: 1) As a Libertarian/Objectivist, i believe in laissez faire capitalism, to a large degree. Usually, when Big Gov gets involved, especially with social engineering, its a bad thing. However, sometimes Gov. Regulation is needed. But Big Gov's overstepping their bounds is becoming more frequent. 2) Both Democrats and Republicans share responsibility, I no longer consider myself a Republican. To me they are the other Big Government Party. Maybe 5mph slower to hell, but hell just the same. 3) It's an illogical assumption to blame Bush because it happened during his presidency. It was a long standing social engineering program coupled with greedy, reckless businesses that should pay and suffer the entire consequences for their mistakes. We'll all be better off in the end. When Obama or you claim that we need more regulation to effectively protect businesses from themselves and most Americans believe it, we're walking on a very slippery rock. The Big 3 should go under. AIG should have sunk. Future investors and shareholders can solve many problems.
