Thomas Sowell in IBD: Don’t Blame Deregulation For Housing Mess

Investor’s Business Daily:

After virtually every disaster created by Beltway politicians you can hear the sound of feet scurrying for cover, see fingers pointing in every direction away from Washington, and watch all sorts of scapegoats hauled up before congressional committees to be denounced on television for the disasters created by members of the committee who are lecturing them.

The word repeated endlessly in these political charades is “deregulation.” The idea is that it was a lack of government supervision which allowed “greed” in the private sector to lead the nation into crises that only our Beltway saviors can solve.

What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards.

It was members of Congress (of both parties) who pushed the regulators, the banks and the mortgage-buying giants Fannie Mae and Freddie Mac into accepting risky mortgages, in the name of “affordable housing” and more homeownership. Presidents of both parties also jumped on the bandwagon.

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