Vail Daily letter: Facts wrong
July 20, 2014
I appreciate Paul Rondeau trying to challenge our society to learn from mistakes. Unfortunately I don't believe he did his homework and without facts how do we learn. In my mind, he then becomes part of the problem that he thinks that he is fixing. The financial meltdown started in the Carter administration when good intentions were behind the Community Reinvestment Act. It opened up the housing market to those who were previously considered not eligible. The government forced banks to drop their standards and play by their new rules. I believe these efforts were double downed in the Clinton administration. In early 2002, I believe the Bush administration went to Congress to warn them that the GSEs needed over sight and regulations. I believe they went six times but their warnings and requests were shot down by people like Barney Frank and Chuck Schumer who insisted that Fannie and Freddie were solvent. Wall Street will always find a way to be creative in making money. They were greedy, no doubt, but they took their lead from the government GSEs.
I believe if we are to learn from the past, you must stick to the facts. Many of our problems today start with good intentions and backfire into unintended consequences (housing, college loans, health care, etc.). I believe government intervention often gets in the way of the free market and competition and problems only get worse.