Scapegoating on the financial crisis

You've probably heard the right-wing talking point that the current financial meltdown is the fault of Jimmy Carter, Bill Clinton and minorities.

Well, it's nonsense.

In Newsweek, business columnist Daniel Gross writes:

"These arguments are generally made by people who read the editorial page of The Wall Street Journal, and ignore the rest of the paper--economic know-nothings whose opinions are informed mostly by ideology and, occasionally, by prejudice. Let's be honest. Fannie and Freddie, which didn't make subprime loans but did buy subprime loans made by others, were part of the problem. Poor congressional oversight was part of the problem. Banks that sought to meet CRA requirements by indiscriminately doling out loans to minorities may have been part of the problem. But none of these issues is the cause of the problem. Not by a long shot. From the beginning, subprime has been a symptom, not a cause. And the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd."

The rest of the article lays it out pretty well. Read it here.

Here's another blog post, from The Big Picture, a very good economics blog written by Barry Ritholtz, that offers a pretty clear explanation for the causes of the financial crisis.