Housing Market

Where In Mayor Bloomberg Says Stupid Things

I'm still trying to wrap my head around how a man, who is clearly not a dummy, could say something this, well, dumb.

“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not so sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have had them without that.

“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

It's true that the Bush Administration encouraged the big banks to put more people in homes as part of the Bush "Ownership Society," but to go as far as to say congress forced them to give mortgages to people who were almost certainly going to default is a bit of a stretch.

It's not as if the government put a gun to the head of Wall Street and told them to defraud their employees, their customers, and some of their biggest investors. Some of those investers got rich during the financial crisis of 2008, but many of them lost a lot of money too. In total, some 20 percent of the nation's wealth vanished into thin air.

Congress and the Bush Administration made it easier for the big banks to do what they did, and they certainly looked the other direction while it happened, but they did not force Wall Street to commit one of the biggest frauds in history.

Why make excuses for them? What happened to business taking responsibility for its own actions and failures? Is blaming the government the new get out of jail free card?