Las Vegas Sun

March 28, 2024

Letter to the editor:

Politicians key culprits in crisis

In the Sun’s Oct. 17 edition, J. Patrick Coolican’s column included a frank and concise description of the real financial trauma imposed upon our state and community by the Great Recession. Causes include a lack of industry diversification, a very poor educational system and an unbelievably disingenuous mortgage financing policy, but there is still an unindicted culprit languishing in the shadows.

With such monumental damage to our citizens, it is crucial to accurately identify the causes, so as to avoid another such disaster. The article states one cause, “Unregulated thrifts handing out shoddy mortgage loans that were then securitized by the banksters ...” But actually, this recession was precipitated by government regulation, rather than the lack thereof. With utopian euphoria adopted by both political parties, we had regressed to the promises of “two chickens in every pot” and “two cars in every garage” heard just before the Great Depression.

The administrations of Clinton and G.W. Bush reveled in reciting the phenomenal percentages of homeownership their policies had produced. With a willing Congress also pushing an absurd agenda of almost total homeownership, government regulation efforts changed from wisely insisting on only prudent mortgage loans to inducing the politically inspired “toxic” loans that caused the meltdown. Regulatory threats against the thrifts and “banksters” as well as guarantees from the government-sponsored enterprises, Freddie and Fannie, fueled the insane lending practices mandated by our politicians.

You can be assured few of the politicians are eager to discuss their part in this calamity; it’s easier to beat up on thrifts and banks.

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