Lenders were accused of being racists for not wanting to loan money in areas the lenders thought was risky. The answer of course was more federal power.

Liberals always look for a reason to blame corporate greed without looking at how the government screwed things up. Politicians wanted the People to own homes, so they started passing federal laws that forced lenders to offer bad loans.

This is by a black Libertarian Economist.

In most cases, government is the problem, not the solution.

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Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk "no doc" and "liar loans," in order to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers but housing prices began to fall, leaving some people with negative home equity and banks in trouble.

The credit crunch and foreclosure problems are failures of government policy. In fact, what we see now is a market correction to foolhardy government policy. Congress' move to bailout lenders and borrowers who made poor decisions will simply create incentives for people to make unwise decisions in the future. English philosopher Herbert Spencer said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools."

However, I can not support Bob Barr becaue he was GOP and not a Libertarian. He made a HUGE mistake dissing Ron Paul Unity Principles...lost 100K votes 09-12.

The housing bubble was more than you let on. There are the ultra greedy brokers, agents, home sellers, investor pools, flippers, investment banking that bought the crap mortgages and pooled them for issue, unregulated greed created this mess and just interest rates, to say lenders were intimidated is ludicrous.

NO banker is intimidated by some stupid law from 1977. It's over, it's done, and that era has nothing to do with now. Except with the minds of the prejudiced who find fault with anything another race does.

The problem is greed. All around greed. Not just those who tried to get the loans, but those who PUSHED those loans. Those money pushers didn't have an ounce of moral fortitude to ask whether the loan would be right for the client. It was to just slam dunk the loan and get the pay check. NOTHING else motivates a sale more than the greed of a broker. Those brokers manipulated the clients, the loans via ill prepared qualifications and over stated values of property already in possession of a buyer. It's this kind of greed, coupled with the already overwhelming slack attitude to credit from Investment banks and the banking system that caused a major meltdown. NOT some innocuous law of 1977.

The govt created freedie mac and fannie mae to guarantee bad loans. They are quasi govt agencies. They were a horrible idea and they got out of control decades ago.

Mr. Bush and the republicans passed the Aemrican dream act which enabled poor people to buy homes they could not afford with the feds paying downpayments and closing costs.

Without govt interference, most of the bad loans would have never been made. The banks would never take such risks. But with the fed laws, they banks made bad loans, bundled them and sold them.

Greed certainly played a role, but govt interference is the primary cause of the problem. Liberals in both parties think that the government is the answer. There should have been no bail out. Freddy and Fannie need to be dissolved and most of the fed laws encouraging bad loans repealed.

what's really funny is you believe its was that simple.

and you still believe in free markets.

they should have let the depression hit just so fools like you could have witnessed and particicpated in it.

The Community Reinvestment Act put NO pressure on banks to make bad loans, and Williams can't show otherwise. There's a reason not one single bank blames the CRA for this mess.

Somebody needs to get a list of all the fed programs designed to increase home ownership. The banks

Most republicans and democrats in DC think that is part of their job.