[Cin]

Congress passed the Community Reinvestment Act in 1977 that set the same standards for all borrowers. The Bush administration weakened the enforcement of CRA. The CRA was at its strongest in the 1990s, under the Clinton administration, when subprime loans performed quite well. It was after the Bush administration cut back on CRA enforcement that problems arose. One would imagine this would show deregulation as the problem or at the very least stop those blaming the CRA. The Fed did nothing but encourage the wild west of lending of recent years.

If we need targets in government we need look no further than the 2000 law that ensured that credit default swaps would remain unregulated. And then again in 2004 when the SEC decided to allow the largest brokerage firms to borrow upwards of 30 times their capital. And then failed to oversee those brokerage firms in subsequent years. Clearly a failure to regulate is the problem. And only an idiot could imagine that more deregulation would be the answer. That’s like deciding that using gasoline to put out fires is a good idea.

Irresponsible behavior by Wall Street is the cause of this financial disaster. A failure to regulate allowed it to happen. And a continued failure to regulate will further destroy our economy. But unless we can get Wall Street out of Washington the problem isn’t likely to be solved anytime soon.