To discover the truth, it is necessary to walk it backward - to find a starting point you need to follow the trail back.
Everyone agrees on a couple of points - the meltdown was triggered (not caused by) the selling of "derivatives" and the foolishness and mismanagement of Fannie Mae and Freddie Mac, which in turn caused the housing industry to fold up like a cheap suit. This resulted in foreclosures, bankruptcies and further resulted in products not being purchased, as people are not furnishing or remodeling homes, or they simply do not have the money, as their recent home equity loans put them under water. Like the ripples when you toss a stone into a pond, the devastation spread outward, touching even the furthest shore.
So, why did this happen? The answer is complex, but I will attempt to simplify it a bit.
The infamous derivatives, the main trigger, are nothing more than a bunch of risky mortgages bundled together, then shares of that bundle are sold off to investors - because of the risk, most were purchased by Fannie Mae and Freddie Mac. So the question now is, "Why were there so many risky mortgages? It sounds like the banks are responsible, just as the Democrats say. Those nasty banks made bad loans, which were bundled by that greedy Wall Street bunch, and sold off to the mismanaged Fannie & Freddie. Right?"
Not quite. It LOOKS that way, and that is what Democrats want you to believe - they need to have voters hate all the right "straw men". And, since the trigger was pulled while Bush was in office, they claim it is therefore "Bush's fault."
But things are rarely as they appear. Let's dig a bit deeper.
Barney Frank (D) and Chris Dodd (D) were the guys who were supposed to be overseeing Fannie Mae. When George Bush and John McCain saw problems arising in 2003-04, they attempted to push through a bill that would regulate them better. Frank & Dodd killed the bill, convincing Congress that "Fannie Mae is fine - there are no problems."
So, in the final stages, it was Democrats who not only fell asleep at the wheel, but convinced Congress not to take action. Now we go deeper.
Why were derivatives even necessary? Why were those risky mortgages being created? And this is where it begins to get meaty. It actually starts back in the '70's, under Jimmy Carter (D). Democrats believed that every American - even the poor - should be able to own their own home. But banks did not want to make such risky loans in areas known as "redline districts" - areas that were in decline and/or populated by the poor. In other words, since banks are in the business of making money, not losing it, they were reluctant to loan money to people who could not repay.
In come the Democrats, led by "community organizing" groups like ACORN. Together they pass a law in Congress known as CRA - the Community Reinvestment Act. This bill REQUIRED banks to make the risky loans. Banks were no longer permitted to use "redlining" to refuse mortgage applications. This was the beginning for what would later force the creation of derivatives.
Banks could still refuse mortgages to those who could not qualify based on income and credit history, however, so the problem at this point was relatively minor. But then along comes ACORN again. ACORN sued the banks through their attorney, community organizer Barack Obama (D). The lawsuit forced stronger changes to the CRA. Under Bill Clinton (D), the Bliley bill was passed which strengthened the CRA of the '70's and literally forced banks to make even riskier loans. And the bubble of risky notes grows out of control.
Now, as I said, banks have to make, not lose, money. Otherwise they would not survive. So it became necessary for them to "spread the risk" by bundling the risky notes - if a few defaulted, the rest would cover the losses. This bundling was the creation of derivatives. Banks were forced into this by the CRA and the Bliley bill, both signed into law by Democrats.
So now we have Fannie Mae under Frank (D) and Dodd (D) buying up risky notes that the Bliley Bill and CRA required banks to make, under Carter (D) and Clinton (D), and forced by Obama (D).
As you can see, Bush had nothing to do with all this - in fact, this mess is what HE "inherited" from Clinton. But it actually goes back further.
In the 1930's, FDR (D) created Fannie Mae. And in the '60's, Lyndon Johnson (D) privatized Fannie Mae, giving it the ability to grow out of control, nearly unrestricted.
Everyone involved in the creation of the meltdown was a liberal Democrat - FDR, Johnson, ACORN, Carter, Obama, Clinton, Frank, Dodd.
One more thing to consider - the meltdown began in July 2007. Democrats controlled Congress since January 2007. Since it is Congress that makes law, they bear some responsibility.
I have been posting this true history for almost 5 years. Still, the Democrats who created this mess are still blaming Bush, and Republicans are just too stupid to dispute them, using the facts taken from government agencies and the Congressional Record.
If more people were less ignorant and willing to at least check out the facts, Obama would not get a single vote come November. It is he and his cronies who are responsible for bringing America to its knees.