The real cause of the financial crisis

I'm departing from my usual defense of marriage blogging to focus on the current financial crisis.

While this article primarily blames the financial crisis on the demise of the 1933 Glass-Steagall Act in 1999 and tries to blame the Democrats and Bill Clinton, the truth is it was primarily a 1999 Republican bill and vote that repealed the act (even though Bill Clinton did sign the bill). The data presented, however show that the rise in subprime mortgage lending started 2 years earlier in 1997.

The best information that I could find related to this was in a PBS Article. Basically Federal Reserve policies and Republicans opened the door to bad lending.

The real financial crisis is the Community Reinvestment Act. The article in wikipedia states:

Clinton's HUD secretary, Andrew Cuomo, "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis," the liberal Village Voice noted. Among those decisions were changes that let Fannie and Freddie get into subprime loan markets in a big way. [2] Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks.

In 2003, Bush attempted to overhaul the finance industry but his proposal was rejected along party lines. Ron Paul introduced "FREE HOUSING MARKET ENHANCEMENT ACT".

In a related New York Times article on Sept. 11, 2003, there is a quote from Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''