How the Democrats Created the Financial Crisis: Kevin Hassett - Bloomberg

I found this article very interesting. The democrats have been pointing fingers at Republicans, but it wasn't until I read this article that I saw that they are also quite responsible for our financial turmoil. I also blame the past 4 administrations dating all the way back to Reagan for our current situation, but it would appear this would have been avoided, at least robbed of its power to bring down our banking system. In all fairness to the Democrats (which I am a Libertarian) this article was written by a McCain economic advisor, but he does raise some interesting points, and points out some things that I don't think the MSM has really shed much light on. Once the article gets near its end, I think it gets a bit too partisan...but never the less it raises good points that show us just how stupid our government really is, just how destructive the idea of partisanship really is.

www.bloomberg.com...

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.