EDITORIAL: Congress responsible for financial collapse
April 12th, 2010 | Published in News
Tuesday, April 13, 2010
Greenspan points a finger at irresponsible lawmakers
For years, the Federal Reserve, Freddie Mac and Fannie Mae caused banks to make high-risk mortgages to borrowers who couldn’t afford them. On Wednesday, in testimony before the Financial Crisis Inquiry Commission, former longtime Federal Reserve Chairman Alan Greenspan finally pinpointed who instigated this risky behavior: Congress.
While Mr. Greenspan’s statements shouldn’t surprise anyone who was paying attention, given the biases in the liberal media, the facts need to be repeated over and over again. Take Rep. Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee. In 2003, Mr. Frank berated a Bush administration official because he was “worried about the tiny little matter of safety and soundness rather than ‘concern about housing.’”
“While the roots of the crisis were global, it was securitized U.S. subprime mortgages that served as the crisis’ immediate trigger,” Mr. Greenspan explained. “The surge in demand for mortgage-backed securities was heavily driven by Fannie Mae and Freddie Mac, which were pressed by the Department of Housing and Urban Development and the Congress to expand affordable housing commitments.” Unfortunately, Fannie Mae and Freddie Mac weren’t the only government agencies to feel the pressure. Mr. Greenspan also noted, “I sat through meeting after meeting in which the pressures on the Federal Reserve – and on, I might add, all of the other regulatory agencies – to enhance lending were remarkable.”