Everybody knows that we got into this recession because banks began lending money to people who had terrible credit ratings, right? People who didn’t have to prove they even had a job. I mean, how long are you going to stay in business when you keep handing out dough to people you never hear from again?
But is that all there is to it? And was it really just the fault of congress because they told Freddie Mac and Fannie May (the organizations that purchased loans) that they had to start purchasing these highly risky things? Or was it all those greedy Wall Streeters?
In this must-read article, “How it All Came Crashing Down,” BYU econ professors explain how we got into this mess—and what we can learn from it.
But that’s not the end of the story. Ira Glass and the folks at This American Life uncover deeper causes of the problem in their must-listen show “The Watchmen” (no, not the movie). I mean, come on, we were told these high-risk loans were as dangerous as milkshakes. Shouldn’t SOMEBODY have seen it?
President Obama keeps saying that the root of the problem was that there wasn’t enough government oversight. Sounds good, doesn’t it? We’ll get disinterested Uncle Sam to protect us from all these investment bullies. But if we dig a bit deeper, it appears that Uncle Sam was one of the major players at the root of the mess.
Read. Listen. They are two fabulous pieces.