Jasper Journal

If you have the opportunity to read one more book this year, consider “Reckless Endangerment.” I finished it this weekend, and it was the most detailed and enlightening expose I have read  on what caused the financial crisis of 2008.

Like many people, I am not a financial whiz, and the inner workings of the financial sector were always fairly mysterious. I believed that the major banking and brokerage houses were rock solid; that our leaders were too smart to allow a complete financial collapse ;  and that regulatory institutions that were there to protect us would work.  Wrong on all counts!

I knew that the collapse in 2008 was the result of the housing bubble, and that it had something to do with Fannie Mae and Freddie Mac, which is all true. What I didn’t know was how corrupt the system was; how greedy everyone became;  and how many politicians were involved.

This did not begin in the 2000′s;  it began way back in the Clinton administration in 1994 with the goal of making home ownership much more accessible to Americans.  This goal became the catalyst for unscrupulous  activities by Fannie Mae and Freddie Mac; mortgage companies like Countrywide, and Wall Street firms like Bear Stearns, Lehman Bros, Goldman Sachs;  and the insurance giant AIG, just to name a few. They all reaped huge profits while the American taxpayer was left holding the bill.

What is most galling is the fact that “holier than though” politicians such as Barney Frank, Chris Dodd, and Maxine Waters were constant defenders of Fannie Mae against government regulators. They received campaign contributions, political support, and in the case of Frank,  Fannie hired his partner, and provided  financial support to a non profit founded  by his mother!   Interesting that Frank was one of the most vocal supporters of Fannie Mae and the most vociferous critic of regulators trying to reign in this enterprise. Their collusion in the defense of the corrupt Fannie Mae is unconscionable.

Frank and Dodd blamed Bush for the 2008 collapse knowing full well that they were in large part contributors and enablers of this disaster. Ironically they sponsored the Dodd- Frank Wall St Reform Act of 2010, that is now supposed to protect consumers. It does not; And if you have to go to a bank or credit union now for a loan or credit card, you will see  first hand the ponderous regulations that have been imposed on these institutions that have little to do with the problem at hand.

It is not a pretty story, but one that must be read.  As the President continues  his campaign of class warfare perhaps he should look at what really happened to our country in 2008. If anyone else has read this book, I would appreciate your thoughts.