Article about the cause of this mess ... or at least part of the cause.

Economic Crisis

The U.S. currently faces on of its largest economic crises in its history. While there is some Big Media exaggeration, no doubt times are dire. It demonstrates at least the very worse in human nature and our political system. It shows what happens when political meddling trumps sound economic policy and greed permeates all.

This is a cruel world. Believe it or not, economic reality dictates many things in our lives, such as the availability of credit. If you have substantial assets and a good payment record, you are more likely to get a loan than someone who has neither. This may shock many people, but lenders like to lend money to those who they think can pay it back. Simply shocking.

It just so happened that throughout the pages of history, there are haves and have nots, the rich and the poor, the credit worthy and un-credit worthy. Some people - the rich, the middle class, the upper-class poor, could get loans while the poor could not. Like my parents and grandparents did, people saved up 20% down payment and sought a home loan. If approved, they got a mortgage and life in a home began.

During the 1970s, Washington politicians decided that since some people could not get loans, that was unfair. So Congress passed the Community Reinvestment Act to mandate banks give loans to those who otherwise would not be able to get them using conventional standards. In 1995, the Clinton Administration loosened standards further and demanded banks, if they were going to qualify for federal banking programs, make loans to those who otherwise would not qualify. Since many of those denied were black, the all-powerful race card was introduced into the discussion, and we developed sort of a subprime affirmative action. Now banks were told to make loans to certain groups in order to meet racial quotas. This is probably a lot of what Barack Obama was doing when he was organizing because is group ACORN was largely the benefactor of the government's largesse.

So now we have Washington politicans, particular Democrat Barney Frank, dictating to banks to whom they must lend. Politicans buying votes and trumping sound economics. Add to that the Republican-led banking deregulation and the all-powerful greed, Wall Street's favorite elixir, and one has an entire new ponzy scheme. More mortgates, more fees, more money.

What Obama, Frank and others never considered was what if these poor borrowers cannot pay back their loans? Shockingly, many could not. Shockingly, Wall Street's greed moved up the food chain and started offering similarly products to middle- and upper-class folks now buying half-a-million-dollar homes they could no more afford that the poor man in the $50K house. Worse yet, the wizards of Wall Street, bundled, sliced and resold these mortgages as CDOs ... more fees, more money. And 15 years later we have the biggest economic crises in 70 years.

I keep saying I want to start posting again, but like much I have resolutions in my head that never make it out to daily practice. Here is to hoping the election provides needed inspiration.