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The Causes of the Bank Crisis

March 10, 2009
Donald Hank

Obama was propelled to victory by the general impression that capitalism – supposedly represented in its most laissez-faire form by G.W. Bush – was an inherently flawed system and needed to be abandoned in favor of an ultra-progressive socialist system.

The accepted narrative on the Left is that the banks were destroyed by lack of regulation. Yet if you ask a proponent of this view by what proposed mechanism the banks, and the rest of the economy, have failed – that is, what specific aspects of “lack of regulation” drove the failure and how – no one has a clue.

The implication is that capitalism is in the hands of greedy people who lent to people who they knew could not repay their loans and that Republicans represent these greedy people.

Yet many of the loans were made in the last decade to people who obviously lacked the means to pay and with no down payment.

The story continues …..

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