I just don't understand how 2008 was obviously because of deregulation. Not only is that a contestable claim, but you're simplifying the entire crash to a convenient cause that clearly confirms your biases.
Just take a walk over to Wikipedia[1], and you can clearly see that ascribing the crash in 2008 to only deregulation is complete and utter nonsense:
The Housing and Community Development Act of 1992 established an affordable housing loan purchase mandate for Fannie Mae and Freddie Mac, and that mandate was to be regulated by HUD. Initially, the 1992 legislation required that 30 percent or more of Fannie’s and Freddie’s loan purchases be related to affordable housing. However, HUD was given the power to set future requirements. In 1995 HUD mandated that 40 percent of Fannie and Freddie’s loan purchases would have to support affordable housing. In 1996, HUD directed Freddie and Fannie to provide at least 42% of their mortgage financing to borrowers with income below the median in their area. This target was increased to 50% in 2000 and 52% in 2005. Under the Bush Administration HUD continued to pressure Fannie and Freddie to increase affordable housing purchases – to as high as 56 percent by the year 2008.[22] To satisfy these mandates, Fannie and Freddie eventually announced low-income and minority loan commitments totaling $5 trillion.[23] Critics argue that, to meet these commitments, Fannie and Freddie promoted a loosening of lending standards - industry-wide.[24]
And if you can't ascribe 2008 to deregulation, then your point starts to become watered down: maybe deregulation isn't the "unquestionable failure" you claim it to be.
You can read on to see about other things that government had their hands in, such as the CRA and lower interest rates. (Among other things, such as the institutions of Fannie and Freddie themselves!)
Thanks, many people keep repeating the "2008 crisis was caused by deregulation" myth when in fact it was quite the opposite and when I try to tell them so they look at me like if I was a mad man. Can't believe how ignorant people are on the issue even some of my highest educated friends. Goes to show that people tend to believe anything without questioning as long as their beliefs match their worldview.
My understanding was that Freddie (and later Margaret Thatcher's imitation with selling council houses in the UK) were policy decisions made on advice from the then nascent neoliberal movement.
Just take a walk over to Wikipedia[1], and you can clearly see that ascribing the crash in 2008 to only deregulation is complete and utter nonsense:
The Housing and Community Development Act of 1992 established an affordable housing loan purchase mandate for Fannie Mae and Freddie Mac, and that mandate was to be regulated by HUD. Initially, the 1992 legislation required that 30 percent or more of Fannie’s and Freddie’s loan purchases be related to affordable housing. However, HUD was given the power to set future requirements. In 1995 HUD mandated that 40 percent of Fannie and Freddie’s loan purchases would have to support affordable housing. In 1996, HUD directed Freddie and Fannie to provide at least 42% of their mortgage financing to borrowers with income below the median in their area. This target was increased to 50% in 2000 and 52% in 2005. Under the Bush Administration HUD continued to pressure Fannie and Freddie to increase affordable housing purchases – to as high as 56 percent by the year 2008.[22] To satisfy these mandates, Fannie and Freddie eventually announced low-income and minority loan commitments totaling $5 trillion.[23] Critics argue that, to meet these commitments, Fannie and Freddie promoted a loosening of lending standards - industry-wide.[24]
And if you can't ascribe 2008 to deregulation, then your point starts to become watered down: maybe deregulation isn't the "unquestionable failure" you claim it to be.
You can read on to see about other things that government had their hands in, such as the CRA and lower interest rates. (Among other things, such as the institutions of Fannie and Freddie themselves!)
[1] - http://en.wikipedia.org/wiki/Causes_of_the_United_States_hou...