re: #57 Killgore Trout

The politics start with who and what caused the creation of the subprime mortgages. As a conservative, I’d love to blame the CRA for forcing banks to make subprime mortgages, but statistically speaking, they were only about 10% of the problem.

The CRA did create a perverse incentive that galvanized competitors in the mortgage markets. Everyone had to compete with CRA mortgage rates and methodology (lack of sound underwriting), so everyone imitated them. And as the video pointed out, people packaging the toxic paper initially made a lot of money. So the problem spiraled out of control. Stupidity and greed are a toxic combination. And the politicians don’t have clean hands either.