Burning Down The House: What Caused Our Economic Crisis?

This eleven-minute video gives a proper historical perspective to the current financial crisis. Guess who’s really responsible for this mess… It’s simply not who the media and the left would like you to believe…

Burning Down The House: What Caused Our Economic Crisis?

LiveLeak Video (backup link)

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11 thoughts on “Burning Down The House: What Caused Our Economic Crisis?”

  1. FYI, The censors at YouTube took down the original link. Luckily I found another one to use. Freedom prevails over communist/Stalinist tactics to supress the truth.

  2. This is only partially true: the video makes it sound as if most of the problem arose from deadbeats and the chronically unemployed being given mortgages they shouldn’t have because the Dems mandated it upon the banks.

    The fact is that there are numerous million-dollar foreclosures.

    The problem wasn’t just that low-income people were being given mortgages but that even people with solid incomes and a good credit history were being given mortgages they should not have for over-valued homes.

    I must again go back to the example of California: my brother works as a financial consultant and makes a nice six figure salary (which is far above the median for Los Angeles where he resides). He’s currently living with a friend in a $2,400-month apartment because he can’t afford homes in the Santa Monica area and doesn’t want to commute 2-hours each way. A reasonable home price for someone making around $120K a year is between $250-300K. Unfortunately, it’s not unusual to see a modest 3-bedroom home (with a chain link fence) going for $650K. I’m betting that most of the people in these homes have budgets that are stretched to the breaking point. In fact, one would have to head pretty far into a high crime area to find a home in a reasonable price range. Clearly, something is wrong with this picture.

    Speculation, poor judgment, ignorance and greed on the part of the American consumer played a big role in this. The banks were not innocent, either. I’ve read of countless testimonials of agents who pushed through risky loans to people without even verifying income because they wanted the commission.

    Plenty of blame to go around on this one …

  3. Which only makes it more annoying that the Republicans know that the government caused this crisis, but the Party leadership decided that government was the solution to the problem it had itself caused.

  4. This video is beyond cool. It is sooo cool, it’s freezing. It fact this video alone could start a new Ice Age.

    It’s like -400 Kalvin and that is impossibly cool.

    Good find Banescu.

  5. James K.:

    You think the video is exaggerating? The problem was exactly that people who couldn’t afford mortgages were given mortgages due to government meddling that was meant to help the “little guy.” What do you think made those very high home prices possible? In large part, easy credit, of course. When the government mandated big decreases in lending standards to “help” poor people, and then further loosened standards in the nineties for the same reasons, lending standards were going to fall across the board. And if banks didn’t play, they lost market share. Losing market share is death for a corporation.

    And I expect we’ll never see on the nightly news that much of what little Mr. Obama has done during his adulthood was aimed at defending the root cause of our current economic collapse. He and the Democrats obstructed a few initiatives this decade to clamp down on Fannie Mae because they wanted to help the “little guy.”

    Ultimately, imposing goofy affirmative action programs on the financial sector was one of the big root causes of this mess. Yes, there were crooked mortgage brokers. There were tons of them in California when I left back in 2005, and many of them got very rich and didn’t hold onto any of the liability. Yes, banks played along. Bad and greedy behavior, but symptomatic of government interference, not the cause of the problem.

    But at the root of all of this, it is Americans who think they deserve things like loans that they shouldn’t be given, and use their government to make that happen. They also think they deserve to purchase more than they earn. This nonsense cannot continue forever. There will be a day of reckoning, and it will be very soon if the derivatives market doesn’t stop unravelling. There will be massive liquidation of assets. Or, alternatively, to quote Robert Mugabe, “Don’t worry. I’ll print more money.” Sorry alternative!

  6. Obiwan:

    Factcheck.org doesn’t even address the CRA and who supported the CRA (hint: Democrats), which is the root cause of the housing bubble. It also fails to mention the Bush Administration’s 2003 initiative to increase oversight of Fannie Mae. Obama was certainly aware of and involved with the efforts to bring reform of Fannie Mae to the floor in 2005 and 2007, given he was the biggest recipient of campaign money from Fannie Mae and has contacts with former CEOs of that organization.

    Furthermore, Factcheck.org is operated by the Annenburg Foundation, with which Barack Obama and his unrepentant terrorist/anarchist buddy William Ayers have been involved.

  7. D. George –

    The Fed keeping the money spigots open after 9/11 with interest rates way below market value also contributed.

    The fact that a Republican Congress could not reign in spending which helped drive up public sector debt did not help.

    The Dems took over and the problem of spending just got worse. Which means earmarks are bipartisan effort, to be sure.

    Which Republican has put forward a measure to repeal the CRA? Which Republican has put forward a bill to completely privatize Fannie Mae and Freddie Mac? Which Republican is leading the charge to balance the budget by slashing spending to the bone and killing earmarks?

    Not John McCain. Maybe Ron Paul, but besides him – who?

    The problem in America isn’t the Dems. If they were the party of socialism, and the Republicans the party of free markets, then our job would be easy. Convince voters to ditch the socialists for the free market.

    But that isn’t the case. The Dems are socialists, and the Repubs are socialist-lite. That makes the job of a Right-winger much harder. If you really believe in the free market and limited government, rather than crony capitalism, you first have to take back the Republican party, then worry about the Dems.

    That is the fatal flaw with conservatives. They act like the Repub Party is somehow on their side, and then they go on the attack against Dems. Not the case at all. Arguing over which side (McCain or Obama) in the bailout is laughable. They’re on the same side. As they are on almost any other major issue outside of some social issues.

  8. Nicholas:

    I stand by my previous remarks, but I agree with your comments also. And due to the facts you point out, the Republicans will almost certainly lose this election despite Obama’s numerous links to communists, anti-American radicals, corrupt Fannie Mae executives, and terrorists.

    Barring some unforseen event, the Republicans will be taking a huge beating, and whatever emerges from the ashes will probably be different. Will it be a return to fiscal discipline? Or will it be capitulation to the reigning socialist agenda with some representation of various conservative social concerns? Time will tell.

  9. D. George –

    I think that is up to us as Republican voters. We must have a zero tolerance for fiscal irresponsibility. I can’t tell you the number of times I’ve heard, “I know he’s into earmarks, but he is such a good Christian!”

    Well, blast it all, lots of Christian Democrats in Europe paved the way for socialism that then got out of their control.

    I don’t care how Christian, how nice, or how folksy a Republican is. He can love his mother, adopt babies from the Third World, and have great relationships with puppies.

    Lack of fiscal discipline means no vote from me.

    Period. Economics is not just some ‘thing’ that we can ignore. The economic foundations of the economy are integral to our freedom and our way of life. If we don’t protect economic freedom, then no other freedom matters.

    Control how a man feeds his family, and you control everything.

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