Thomas Sowell’s column today refutes the politically facile contention that the housing mess was due to greed. Instead, government policy made by politicians who were eager to appear generous and kind was at fault for the demolition of careful bank lending standards.
This is a point that’s been made again and again over the last few years, but since scurrilous politicians keep saying, “Don’t blame me — blame greed! I’m against greed!” we need to keep reiterating the truth.
A point I’d add to Sowell’s column. Greedy people want money, but they want to avoid losing the money they’ve got just as much. Greedy people are careful with their money. What wiped away the usual care? Government. If anything other than a government sponsored enterprise (Fannie and Freddie) had tried peddling the dubious mortgage paper, lots of caution flags would have been raised. Because it was assumed that the feds stood behind all that paper, financial institutions were put off their guard.
