" .. doing the same thing over and over again and expecting different results."Remember what our good friends in 'merica did? When American Presidents aren't jizzing all over plump interns, or invading countries with oil underneath them, they're busy wondering how best to help the needy. Yeah: to help the needy remember who to vote for.
Good 'ol boy Bill Clinton concluded that the one way of doing this was to get banks to lending more money to people to buy homes. Why? Because those people wanted more money to buy homes. They wanted to buy a place of their own, rather than renting. And if a potential voter wants something ..
Historically, banks tended to only lend to people who they thought would pay it back, on time and in full.
However, with a bit of pressure, a bit of coercion, and a lot of bribery ("do this for us, and we'll do all the dirty things you love, Banks"), Bill and his administration decided to persuade the banks to spunk dollars over everyone's dresses.
Jimmy Carter had already passed the exciting-sounding 'Community Reinvestment Act, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901' in 1977. And it spoke to the banks, saying "Hey there, Banks. Y'all better stop refusing to lend money to people just because y'all think they might not be able to pay it back".
So all Bill needed to so was to ".. reduce the cost and compliance burden" for the act. In other words, to whip out the few tiny safeguards it had, coat it liberally in oil so it could slip past anything, and let it go.
The banks knew when they were on to a good, profitable thang, so lend, lend, lend, they did. And then offset their risks by bundling up and reselling the 'subprime' loans to other banks. And then used the money they raised doing that to lend to more wannabe homebuyers, just to keep Bill smilin'.
And didn't it all work out brilliantly? Remember?
Well, no, of course it fucking didn't. The people who couldn't pay back the loans, didn't pay back the loans. Turned out that 'subprime' was a polite way of saying 'fucking hopeless'. Which meant the bundled loans were pretty much worthless - they were never comin' home. Which meant that suddenly the banks had a fuck of a lot less money than they'd pretended. Which meant we were all in the shit. And still are, for fucks' sake..
So, Dave 'n' George, we're all hugely excited to see how your shiny new #helptobuy scheme pans out. What a lovely, fresh idea - to coerce the banks to lend more money to people, so they can buy a lovely house.
What could possibly go wrong?