2008 Financial Crisis — A 10-Year Retrospective
Ten years ago, the nation experienced a formative and trying financial collapse.
Ten years ago, the nation experienced a formative and trying financial crisis. Economically, the collapse of major financial institutions helped plunge the nation into the “Great Recession.” Politically, the crisis propelled Barack Obama to victory in 2008 — which then caused eight years of economic stagnation under the weight of his massive new government programs.
On a walk down memory lane (or the memory hole of the Left), we see that Democrats seeded the financial collapse, particularly with mortgage regulations.
As Mark Alexander explained in his updated and comprehensive review of the 2008 financial crisis, “The Community Reinvestment Act was passed by Democrats of the 95th Congress and signed into law by Jimmy Carter in 1977. It coerced lending institutions to make loans ‘to the entire community,’ undermining means testing to qualify applicants for mortgages.” Despite some positive changes in the intervening Republican White House years, “Bill Clinton’s signature on legislation making it easier for minority constituents with bad credit to obtain mortgages really reseeded the crisis. … Clinton’s legislation, in effect, applied affirmative action to the lending industry, which is to say that the [crisis was] NOT a ‘free market failure’ but the result of socially engineered financial policy by the central government.”
It took time for bad subprime mortgages to create a financial sinkhole underneath major banks. That’s why the collapse didn’t happen in 1998 but during the tenure of George W. Bush a decade later. When the house of cards inevitably collapsed, the Democrat response was … more government regulation. The Dodd-Frank financial regulatory overhaul essentially codified “too big to fail” — the very thing Democrats routinely railed against. By 2015, Obama’s administration was working to make sure history repeated.
Fortunately, in 2016, Americans took another path. President Donald Trump has worked from Day 1 to lower taxes and deregulate the economy, and the results are impressive. That doesn’t mean we’re permanently out of the woods, or that Trump is a miracle worker. But it does mean that the right policies matter at the federal level and at your kitchen table.