Many conservatives correctly identify
Barney Frank and
Chris Dodd for their part in the mortgage crisis. Unfortunately, many conservatives also erroneously place the majority of blame for the crisis on the
Community Reinvestment Act. I feel that it's my duty to set the record straight.
While Frank and Dodd's tinkering with the CRA forced lending institutions to make a quota of bad loans that certainly
contributed to the mortgage crisis, the
primary cause of crisis was Frank and Dodd's push to reduce mortgage buying standards at
Fannie Mae and
Freddie Mac, who provide liquidity to mortgagees by buying the loans they (the mortgagees) make to the public. Before Frank and Dodd were able to pass legislation weakening Fannie and Freddie's buying standards, all mortgages purchased off the primary market by these two
Government Sponsored Enterprises adhered to
Federal Housing Administration standards, i.e. they were "prime" loans. But Frank, Dodd, and their cohorts "
rolled the dice" in regards to subprime lending, and, in effect, drowned Fannie and Freddie with junk mortgage paper. This began a series of cataclysmic events that eventually crashed the financial system and led to this unfortunate period of chronic unemployment and reduced standard of living.
What makes me so angry is that Frank and Dodd, who are directly responsible for much of the economic misery we've been experiencing in this country over the past four years, are
still unscathed by the disaster they caused. They're not even bothered by Occupy Wall Street, which is especially ironic in Dodd's case, given that he is now the CEO of the
Motion Picture Association of America. 28 million displaced workers, many for years. And these guys just walked. Sickening.
