American Thinker- Print Article

The root of the current financial crisis is all those bad mortgages written to people who couldn't afford them. And why were so many bad loans made? Because the federal government pushed for it, in the name of expanding home ownership.

The brilliant editor of the Investor's Business Daily editorial page, Terry Jones, lays it all out clearly and concisely. This is must-reading. A sample:

While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.

In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.

Despite warnings of trouble at Fannie and Freddie, in 1994 Clinton unveiled his National Homeownership Strategy, which broadened the CRA in ways Congress never intended.

Hat tip: Lucianne.com

Update from Dennis Sevakis:

In his editorial, Terry Jones at IBD referenced a 2000 article at City Journal but did not link to it.
That's the last link in this list of links from the home page of the City Journal

Wall Street Explodes
Background reading from City Journal’s writers

Questioning King Henry [23 September 2008]
Throwing Bad Debt After Bad—Again! [18 September 2008]
Can Wall Street Reinvent Itself Again? [17 September 2008]
About the Next Crisis [29 July 2008]
In the U.S., Selectively Applied Capitalism [23 July 2008]
America, Too Big to Fail . . . Probably [16 July 2008]
New York’s Next Fiscal Crisis [Summer 2008]
Predatory Lending, or Mortgage Fraud? [9 April 2008]
Memo to Governor Paterson [18 March 2008]
Banks, Shot [2 January 2008]
Super SIV to the Rescue? [8 November 2007]
Wall Street’s Mortgage Pain [12 March 2007]
Bonus Boom, But . . . [Winter 2007]
Gotham Needs Wall Street; Does Wall Street Need Gotham? [Winter 2006]
How the CRA Made Things Worse [Winter 2000]

The origin of specious mortgages (updated)