Who is to blame?

It is well known that the sub-prime mortgage crisis is the cause of the current economic crisis. The question to ask is who is to blame? Are we to blame it 100% on George Bush solely based on the fact that it happened under his watch? Some people blame the greed of Wall Street. Where should the blame go? Here are a few things to think about.

Real estate used to be a sure and safe way for banks and people to make money for decades. Then in 1977, Jimmy Carter and the Democratic congress passed the Community Reinvestment Act which basically sought to address discrimination in loans made to different areas or neighborhoods. If data showed that a neighborhood with minorities were discriminated against, then those banks would find lawsuits and federal regulators at their doorstep. This however had nothing to do with discrimination but whether the applicants were loan worthy.

This was based on the premise that lawmakers sitting in Washington knew better how and who should be approved by loans rather than the banks. When these laws were more strictly enforced in the 90's institutions were compelled to provide loans to applicants that otherwise wouldn't receive the loan in the first place. Would any of you loan $100,000 to someone who has a bad credit history? The answer is no, but banks were forced to do the opposite of normal rational thinking.

Those who have a myopic view of the economy will definitely blame the recession and housing crisis on Bush, but risky loans were being made before Bush took office. Things got all screwed up once the government tried to get involved with the free market.

While Bush should share in some of the blame(as well as Alan Greenspan, Bill Clinton, greedy bankers, consumers who took on more debt that they could handle) , it is important to remember that during George Bush's tenure that the nation experienced great prosperity and wealth. There was a period of approximately 6 years of uninterrupted growth. Ronald Reagan was right who recognized government as the problem.