The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission's work.
The Republicans, led by the commission's vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They'll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said.
The full story here.
Those who cannot remember the past are condemned to repeat it, as George Santayana said.
While there is some truth to the role of government in the mess bear in mind that Fannie Mae and Freddie Mac wrote about 15% of the subprime mortgages. Most of the fraudulent mortgages were written by private companies such as Countrywide and Washington Mutual. If all those mortgages had failed the total loss to the economy would have been well below $1 trillion, bad enough, but a hit the economy would have been able to absorb without triggering the 'Great Recession". It would have been worse than the Savings and Loan crisis of the 80's but not by much.
It was only when Wall Street stepped in and securitized the mortgages at a 30-1 ratio in complex derivatives that caused the wheels to come off the economy. For every $1 in bad mortgages, $30 was at risk. Other than running into the many trillions, we still have no idea how much has been at stake and the investment banks have still not accounted fully for the pile of shit they are sitting on but according to the Republicans on the panel we are not even allowed to mention "Wall Street" lest it offends those poor hard pressed banks.
How the fuck are we ever going to get anything fixed when Republicans can't even get the slightest grip on reality.
In looking up the exact wording of Santayana's quote I found another gem from him.
Fanaticism consists in redoubling your efforts when you have forgotten your aim. It sums up the current GOP perfectly.