In 1999, the New York Times published a piece describing a government policy that forced the market to give out bad mortgages. In this piece, analysts even said that a bailout would be coming. Oh, and the media has tried to ignore it. Read all about it:
“… the Fannie Mae Corporation is easing the credit requirements on loans… The action… will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough…Fannie Mae… has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers whose incomes, credit ratings and savings are not good enough for conventional loans… Fannie Mae is taking on significantly more risk… the government-subsidized corporation may run into trouble… prompting a government rescue… the move is intended in part to increase the number of… home owners who tend to have worse credit ratings…”
The media is ignoring basic journalistic principles and is steamrolling the idea that the market is evil, that freedom caused the crisis and that government is our hero. This simply isn’t true.
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