Not in the case of the truth. While it is true that the banks made stupid loan risks by granting mortgages that were based on nothing and without any collateral or good credit ratings by many consumers. It is further true that Fannie Mae and Freddy Mac backed these same mortgages and thus giving the banks the ability to shove them through. It is also true that this finally led to Wall Street, doing what they have done for decades, repackage and sell mortgage derivates, which always were a “good bet” for investors and had never hitherto failed. The further fly in the ointment was when the banks and Wall Street insured these same mortgage packages with AIG, and as the bubble burst because the borrowers could not pay back their loans, they all came due in a rush, threatening to bring down AIG. This then caused the government to bail out AIG to prevent a total collapse of the housing market, with our tax dollars.
This is half the loaf, and thus I am willing to admit that the 1 percent caused this to happen because the profits leading to it were obscene and bank and Wall Street executives were taking bonuses galore for their efforts. You can partially blame Bill Clinton for this for signing into law The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, which allowed banks to become Wall Street investors and thus put at risk the very funds they had held to insure our savings. Without this law, the impact of the bubble bursting would have been far less severe and possible not at all as it would not have allowed the same banks granting mortgages to package them and buy and sell them.
Of course none of this would have happened, if over the last several decades our leaders, commencing with Clinton, did not insist that every citizen had a right to own a home, when they clearly do not. Owning a home is not a right. Owning a home when you can pay for it is a choice. If you can pay for it you then have the right to own it without risking the money of others. Bush continued the push for Americans to become property owners and Congress under bush made an art out of threatening the banks in order to force them to grant mortgages to folks who simply could not afford them. The only right those folks had was to pay rent, as I did most of my life. Mr. Obama, while his street rabble Acorn, were marching on the banks also made the lives of the banks miserable unless they caved to the pressure of Acorn. Barney Frank, who in my opinion resigned due to an upcoming investigation of Countrywide Mortgage, with himself being negatively impacted by it, was the king pin of bank threats along with his “partner in crime”, Chris Dodd. The two were soon joined by Barack Obama, upon his arrival in the Senate in order to vote “present” on any issue that would force him to pick a side. Frank was warned in 2003 and then again in 2006 by both Bush and McCain, that he was gambling with the housing market by trying to force banks to grant mortgages to people who could never in this lifetime repay. Mr. Frank’s “frank reply” was, “I will roll the dice”. He did, we lost.
Now while I am the first to admit that the banks and Wall Street were guilty of “vulture capitalism” to quote Rick Perry’s term, they were encouraged to do so by government. When you put the fox in charge of the henhouse, you get roast chicken!!! If the banks and Wall Street know that the signal is to be greedy with the government turning a blind eye, they will steal. When you encourage corruption, you wind up with corruption. I postulate that if the asses in congress, who never seem to be aware of “unintended consequences” such as granting someone a mortgage who needs a photo of a hamburger on a cash register to ring a sale, or bank rolling a loser like Solyndra, had never put up the “surrender flag” to the banks and Wall Street, this all never would have happened.
The unwashed and uninformed at “Occupy Wall Street” would have best been served occupying Congress for the stupidity of their utter failure to gauge the “unintended consequences” of their moronic actions. One might even say they were acting with the best of intentions, but even that is a stretch witness at least two of these Senators, Obama and Frank, who had benefited during the time from favorable mortgages and land deals.