Posted by
On the Right on Monday, September 15, 2008 10:08:23 PM
Barack Obama and Democrats blame the historic financial turmoil on
the market. But if it's dysfunctional, Democrats during the Clinton
years are a prime reason for it.
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Obama in a statement yesterday blamed the shocking new round of
subprime-related bankruptcies on the free-market system, and
specifically the "trickle-down" economics of the Bush administration,
which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with
multiculturalism, that dictated where mortgage lenders could lend, and
originally helped create the market for the high-risk subprime loans
now infecting like a retrovirus the balance sheets of many of Wall
Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they
had no choice but to lower lending standards to make the loans that
sound business practices had previously guarded against making. It was
either that or face stiff government penalties.
Obama and Democrats on the Hill think even more regulation and more
interference in the market will solve the problem their policies helped
cause. For now, unarmed by the historic record, conventional wisdom is
buying into their blame-business-first rhetoric and bigger-government
solutions.
While government arguably has a role in helping low-income folks buy
a home, Clinton went overboard by strong-arming lenders with tougher
and tougher regulations, which only led to lenders taking on hundreds
of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.