Here is a link to an article in the Huffington Post that that attempts to explain why the crash happened and who was responsible. It seems to be fair-minded and logical.

I am no financial expert , so I am posting this to get the opinions of people who are well versed in such things.

http://www.huffingtonpost.com/robert-scheer/the-great-american-sticku_1_b_715952.html

An unsustainable path, fueled by:

1) easy credit and the idea that debt is good

2) an ever-growing public sector that consumes resources that the tax base can't manage

3) a growing part of the citizenry that relies on the resources (see 2 above) yet doesn't pay its own weight

Yeah I don't think i even need to read the article MB hit the nail on the head.

Don't forget John Kasich. He's evil. I saw it on the TV.

Is the article accurate?? If not, where does it go wrong.

A remarkably accurate and fair piece by HuffPo.

Prescott;485980 wrote:Is the article accurate?? If not, where does it go wrong.

The writer announces his like of Clinton and hatred for Reagan early on, so at least he's honest about his bias. Therefore, you have to read the article knowing how he sees things.

I agree with the article in that so called, "easy money" and "free money", used for little to no downpayments on mortgages are a root cause of the housing bubble. There are certain rules of economics, that no matter who is in charge or how wealth is re-distributed, that you just cannot change. In this story, the idea of a free lunch (no down payment, mortgage rates below market value, etc.) is shot down...again. Unfortunately, Americans will always be schnookered into thinking that we can somehow violate this basic tenet by those that see an opportunity to make riches they don't deserve. The road to financial health includes such time-honored values as saving, investing, and not living beyond your means. When these are pre-empted or ignored, the penalties are huge...as we are all discovering.

The repeal of Glass Steagal was one of the single worst decisions ever made by the U.S Congress. It is not coincidence that for the 65 years it was in place we saw the greatest, most stable economic expansion in the history of the world. It is also not coincidence that he economy went to hell in a hand basket within a decade of its repeal.

The lesson learned after the crash of the late 20's was that speculative financial activity and the safer traditional banking functions shouldn't be mixed. That was why the wall was erected between investment banking and traditional banking in the first place.

Byron Dorgan was one of 10 senators I think it was to vote against the repeal, and the speech he gave about the way we would look back with regret and rue the day we ever decided to do it was one of the most prescient, forward looking addresses I have ever seen given on the Senate floor as it described to a T how the economy would ultimately crumble because of it.

Beyond the CRA, and Frank and Dodd, and Fannie and Freddie, and the Clinton appointees who ran them and cooked the books for big bonuses, you have Robert Herz, FASB chairman, and his 2007 ruling concerning mark-to-market accounting for banks and insurance companies, which unnecessarily destroyed $500 billion in regulatory capital of these institutions in '08-'09, triggering the panic. He just resigned by the way, which is good. Now if we could only get Frank, Dodd, Pelosi,Reid,obama & Co to resign .................

and his 2007 ruling concerning mark-to-market accounting for banks and insurance companies

Mark to myth (or "make it up") accounting is equally as bad if not worse than mark to market.

IggyPride00;486130 wrote:Mark to myth (or "make it up") accounting is equally as bad if not worse than mark to market.

Marking a long-lived asset/security to a value that may only be good for one moment in time is not an adequate solution, and it incited the downward valuation spiral that, once begun, can hardly be reversed, and for which no amount of capital can support. We can do better.

Probably the only thing I found in error or left out was the that the role of Dodd, Frank and the failure of Freddie and Fannie was not mentioned at all.

HitsRus;486645 wrote:Probably the only thing I found in error or left out was the that the role of Dodd, Frank and the failure of Freddie and Fannie was not mentioned at all.

I noticed that as well. While there is plenty of blame to go around for the cause of the meltdown, you simply cannot not include these clowns and Fannie & Freddie in the meltdown equation.