Saturday, January 31, 2009

Cause and Effect - Part 1


Cause and Effect - Part 1:
"We can learn from them. ..Or can we?

Consider the basic and fundamental reason for the current financial (housing based) crisis. It started many years ago with one of the most incompetent presidents this country has ever seen. See if you can guess from the following multiple choice:
A. Jimmy Carter
B. Jimmy Carter
C. Jimmy Carter
D. All of the above.

I believe the answer is somewhere along the lines of 1977: Jimmy Carter rams the Community Reinvestment Act through Congress.

Note that it has since been reinforced by Democrat (Clinton) and Only slightly rebuffed by a distracted Republican Bush white house, however note that even Bush’s administration Mankiw warned of trouble:

“2001: Bush administration warns of impending doom. In Bush’s first year in office, the White House’s chief economist, N. Gregory Mankiw, warned Fannie and Freddie’s loans to unqualified borrowers and other complications at the two institutions were creating a huge risk for the entire financial system.
Representative Barney Frank (D-MA) denounced Mankiw, accusing him of having no “concern about housing.” ”"

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