What Really Caused the Great Recession of 2008?
You’ll find plenty of blame to go around on this subject, but a little study shows that there were four or five major factors that caused the last big recession, and neither a single president or a single party can be blamed. First, the expanded mandate of Fannie and Freddie - The housing collapse can be traced back the Clinton administration’s pressuring of Fannie and Freddie to encourage more home buying. The Community Reinvestment Act — in which banks were encouraged to lend to people who normally would not be worthy of obtaining home loans — was especially pernicious. The Act had been around for a long time prior to Clinton, but the Clinton Administration turned a once-obscure and lightly enforced banking regulation law into one of the most powerful mandates shaping American cities. This actually started way back in the Carter administration. Second, The FED kept interest rates too low for too long . Keeping interest rates artificially low led predictably to excessive credit a...