As the election approached in September of 2008, John McCain briefly pulled ahead of Barack Obama in the polls. Then the roof fell in on the unfortunate Republican as the financial industry locked up tight and New York money managers stopped loaning to each other. They did so because of the doubtful viability of mortgage-backed securities comprising huge fractions of the financial industry's portfolio, and comprised of terrible mortgages the government had forced the mortgage industry to make. The potent question after Lehman Brothers went down without a trace was whether there would be any more US government bailouts.
TARP followed, and in the aftermath, the government put together a commission to review that credit crunch, and that commission concluded that -- wait for it --
it was everybody's fault but the government's!
Peter Wallison was a member of that commission, and he here describes the review process, saying that no evidence of the government's malfeasance and culpability was allowed to be presented. He then details the evidence not presented, and the implication of it: that without a doubt government policies requiring mortgage lenders to make ever increasing fractions of mortgages to unqualified borrowers lead inevitably to a financial collapse and to the September 2008 crisis.
Here is Arnold Kling's commentary on Wallison's dissent from the Coverup Commission's final report -- at the econlib.org Website of all places!
Yet another failure of economic planning by the fabled Five Smart Guys in a Room in Washington.
