The Root Cause

Bad mortgages caused the banking failure.
The housing bubble was created from bad mortgages.
What caused the housing bubble?

This was the start. Carter signed the Community Reinvestment Act, Clinton enlarged the program, and Bush has had his hand in the mess to.

Then we have Fanni Mae getting mortgages and selling them to banks. They made money off each mortgage they sold, so to make more money, they moved down the income ladder and started pursuing subprime loans.

In 2003 the housing bubble was identified and President Bush did attempt to address it, but the Democrats stopped it.

Then in 2005, John McCain created The Housing Enterprise Regulatory Act of 2005. This bill was going to regulate Freddie Mac and Fannie Mae. The Democrats stopped this one too.

Now the crazy thing is everyone wanted to get poor people into housing they could afford. What the housing bubble did was drive prices up much faster than inflation. All this did was move affordable housing further away from the poor.

Then again in 2007 the bill came back, but Chris Dodd (D) blocked it. Barack Obama also held the bill back. Seems they both, and others, got some sweet mortgages out of it. Probably better deals than the work that has Ted Stevens in Federal Court today.

All the above is a summary of the first half of this. It's packed with information, all of which will probably have no bearing on anyone since I figure about now, everyone has made up their minds.

I was surprised to see that the Republicans tried putting some controls in the mechanism that created the housing bubble as early as 2003. I was pleased and surprised.

Now I'm going to go and watch the rest of the video.