What Caused Our Recession?

On Dennis Prager’s radio show today, economist Tom Sowell said: “What got us into this was that mortgages started to default and there was a whole domino effect going through the whole financial system because people had bought these mortgage-backed securities and money wasn’t coming.

“The question is — why did so many people start defaulting on mortgages when that had never been the case before on this scale?

“The answer is that the mortgage lending standards were forced down by the federal government.

“Barney Frank and Chris Dodd were the leaders in this kind of thing. President Bush got into it only to the extent that he wanted to reduce the down payment that people would have to make for FHA loans. A bad idea, but he argued that Fannie Mae and Freddie Mac should be looked into and restrained because they were getting in way over their heads and Democrats in Congress wouldn’t hear of it.

“President Obama says the buck stops here but the minute he gets criticized, he says, the buck stops with George W. Bush.”

A caller complains that Jews constitute a disproportionate percentage of American billionaires.

Tom Sowell: “One hundred percent of billionaires in Indonesia and Thailand are Chinese (a tiny minority there).

“There’s nothing strange about groups not being demographically represented at various incomes — that is the rule around the world.

“It is fundamentally values and habits. I often hear the black – white comparison made. I often think that if blacks and whites in America were the same they would be the only two groups on this planet who are the same.

“If you look at rates of alcoholism and crime and infant mortality, you name it, groups all around the world are all different from each other. The idea that if any time you find a statistical imbalance it must be from racism is ridiculous.”

About Luke Ford

I've written five books (see Amazon.com). My work has been covered in the New York Times, the Los Angeles Times, and on 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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