Jan 30, 2009

The housing crisis in 2007 was the first major event signalling the current economic crisis. Every crisis has multiple causes, of course, but the main problem was that too many unqualified people were able to buy houses. Much of this was the result of Rep. Barney Frank's push to make Freddie Mac and Fannie Mae make loans to low-income people in order to allow them to buy houses, whether they were qualified or not.

The Bush administration warned about a potential crisis as early as 2001, then again in 2003. He was concerned about Freddie and Fannie, but the Democractic Party, led by Schumer and Frank, opposed adding regulations that might have prevented the crisis.

Then during the election, they blamed the Bush administration for the economic problems. That's politics, as they say. Here is a 5-minute news video from CNN reporting this story.

http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1