The economic crises of 2008. How did we really get here.

The economic crises of 2008. How did we really get here. This is just one zooming point in many that are similar in nature. All combined over many years they are the major reason for the 2008 recession. In the 1970′s, a new political idea started taking shape. Banks must lend in the areas where they have branches. A set percentage of the money the bank lent out, should, goes the argument, go to borrowers in the local area. It was done by people on the left. It was their argument and doing. That idea became a set of laws. Over time the banks were forced to lend money to people that beforehand didn’t qualify for loans. The banks did’nt chose to lend them. They were forced to do so. It was not racism. Although I’m sure that there was some of that. However the dominant policy driver was the banks deciding that these people were too much of a risk. It was not all black and white. Lowering the standers in order to comply with the new redlining laws forced the banks to provide risky loans to people of all colors. People that didn’t qualify and were considered to high a risk before the laws were passed. Banks are in the business of moving as much money as possible at the most profitable point between safe loans and somewhat more risky loans. If the banks thought that these new classes of people were a worth while risk, they would have provided them the loans prior to the passing of these laws. These loand were a loser from the get go. And these loans stared to lose a lot of money. It became abundantly clear over time. So in the early 1990′s a new set of laws were passed. And they opened up the road that allowed the bundling selling and insuring of the packaged loans. They already knew that they had a loser, but they pushed out the explosion date farther into the future. Hoping for miracle, or at least that the explosion would be too far into the future for them to be held responsible. By doing that they created a far larger explosion when the bomb went off in 2008. Rather then defusing the bomb, the politicians facilitated and paved the road into an inevitably far greater explosion when it finally came.
It was a set of laws pushed by people of mixed agendas. Some true believers. Intellectually honest people who see the world from that prospective. Some had other reasons. Personal gain, money, political power, fame, and all the other motivations that drive human beings. It sounded good. It attracted opportunists and it became law. Now we are paying the price. It is just one example of many. There are Fannie-Mae and Freddie-Mac. Another bomb set up to explode some time in the future. And there are many other presents created and then continually fueled by the left over the years. Each and every one of them will explode in due time. It must be added that some parts of these laws were wise and served the nation well. But within that package of laws was also this time bomb.

There are other supporting reasons for the crash. There always are. But the redlining laws and the cowardness and selfishness of the politicians some years later are the main reason for the reality we faced in 2008. Reality we still deal with now.