For those of us who have studied the natural law application in economics that has been developed by the Austrian school of economics knows what Bob Ellis has concluded (see what I underlined below) is nothing more than common sense:
The lies passed off in the past year have been truly astounding in their brazenness. Oh, there’s a grain of truth here, as there usually is in order to make a lie more believable. There was indeed a shortage of government oversight…but it was in the oversight of government lending agencies, not in the private market.
As I and others have pointed out time after time after time after time after time after time since the meltdown, Democrats repeatedly refused to provide greater oversight and control of the government lending institutions of Fannie Mae and Freddie Mac. This lack of oversight led to incredible recklessness from these major players in the lending industry which destabilized the entire market. The politically correct requirements the government placed on the private market, forcing them to make risky loans to politically correct groups, only added to the problem.
Now we have an official government report which issues findings that back up what we already knew.
The Heritage Foundation has posted a report from the U.S. House Committee on Oversight and Government Reform entitled "The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008."
The introduction to the report encapsulates quite well the monumental government incompetence that led to the meltdown:
The Role of Government Affordable Housing Policy in
Creating the Global Financial Crisis of 2008
The housing bubble that burst in 2007 and led to a financial crisis can be traced back to federal government intervention in the U.S. housing market intended to help provide homeownership opportunities for more Americans. This intervention began with two government-backed corporations, Fannie Mae and Freddie Mac, which
privatized their profits but socialized their risks
, creating powerful incentives for them to act recklessly
and exposing taxpayers to tremendous losses. Government intervention also created "affordable" but dangerous lending policies
which encouraged lower down payments, looser underwriting standards and higher leverage. Finally, government intervention created a nexus of vested interests
– politicians, lenders and lobbyists – who profited from the "affordable" housing market and acted to kill reforms