Crony Capitalism, American Style

With highway accidents, the greatest carnage always attracts the most onlookers. So, too, with the 2007-08 financial crisis and its aftermath. Each review of those events paints an increasingly ugly picture of crass cronyism. Two administrations, one Republican and the other Democratic, claim only the most noble, disinterested motives for their actions, but everything done has conspired to protect established financial power and advantage it against competition. Collusion and cronyism dominated the buildup to the crisis and informed Washington’s otherwise seemingly ad hoc response. Now, Dodd-Frank has enshrined the inequitable practices in law. Whatever the sins of bankers and investors, Washington orchestrated the mess from the beginning. For years, the federal government insisted that banks direct their mortgage lending increasingly toward the dubious credits referred to as sub-prime. Under the 1992 Housing Community Development Act the two government agencies that support...(Read Full Article)