Phil Gramm, in the NYT:
“Some people look at subprime lending and see evil. I look at subprime lending and I see the American dream in action,” he said. “My mother lived it as a result of a finance company making a mortgage loan that a bank would not make.”
Two differences, though:
1. Phil's mom actually tried to pay the thing back. No bailouts. If we get into the bailout business, why would ANYONE actually suck it up and pay back? Much easier to blame those "predatory" bastards whose money you borrowed, and wasted on a now worthless house.
2. More people seemed to understand that there is a positive relation between "risk" and "interest charges." Lending institutions have been under so much pressure to make loans (1) to people who can't afford to pay back, and (2) at rates that don't account for risk differences.
Now, was private greed complicit, or worse, in the subprime debacle? Sure. But you can't blame dogs for eating out of the garbage. FNMA and the rest of the clownish illiterate fellows who "manage" mortgages laid out a garbage buffet, all you can eat, free, come back for more.
(Nod to Neanderbill, who pays cash for everything)