Just Google old newspaper articles or the Congressional Record.

"A brief history of the Fannie Mae and Freddie Mac mess is in order. Back in the days when a Bank or Savings and Loan approved a home loan, they did so with lending standards that had historically led to only safe loans. They had to because they kept the loan and were responsible if it failed. These standards included 3 major parts.

First, the mortgage payments could be no greater that a set percentage of your income, usually about 40 percent.

Second, a down payment was required of about 10 percent or above so the new owner would immediately have some equity in the home.

Third, A good credit rating was required to prove you had a history of paying your bills.

Some adjustments could be made, for example people that had poor credit could get a loan with a larger down payment so if the loan failed, the bank could still resell the house and cover the loan."

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What I see most on display here is what I call Lawyerthink. By that, I mean, the desired answer is known at the outset, so great effort is put into working BACKWARDS from the desired conclusion for logic in support of it. In this case, the desired answer is "proof" that this most recent of marketplace trainwrecks is not a marketplace failure. In such cases, when all evidence seems to indicate otherwise, great leaps in logic are required to put the blame elsewhere -in this case on the government.

Here, citations are made of a 'study' by the Heritage Foundation that concludes that government subsidies 'forced' market players into this problem. As if the Heritage Foundation could ever conclude otherwise and still sustain its funding.

Such logic requires that we conclude all the marketplace players were essentially 'duped' into booking, selling, securitizing, rating, and insuring these loans despite what their own risk assessment methods should have told them about the quality of the loans. To me, that is a remarkably asinine conclusion. To believe this, a person has to believe that market players concluded a 'bailout' would occur early on, not at the stage that it has occurred. AIG's stock was at $2 by the time Paulson said he would bail them out. So what market player puts into his calculations that all is good so long as the government refunds him for the last nickel of his dollar investment?

That makes no sense at all, and neither does the idea that the dot.com market bubble, and all its attendant fraud was also a product of governmental intervention. Kenny Lay, Bernie Ebbers, et al, acted of their own accord in defrauding investors, and this latest round of fraud follows on the heels of that round of speculation and fraud.

This idea that such problems are a product of government intervention just don't hold water. Real truth seekers should instead ask what it is about our markets that have produced successive cycles of destabilizing, fraudulent, and irrational marketplace behavior. For those that think that markets are fundamentally rational and self-correcting, it's time to ask how come, over and over again, they never seem to fix themselves.

Perhaps you are referring to the politicians' activities on Fannie Mae and Freddie Mac, that are now, apparently, backfiring. This financial crisis is seeming to be traced all back to their malfeasances. No?

''These two entities -Fannie Mae and Freddie Mac – are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, and the less we will see in terms of affordable housing.'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.
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Community Reinvestment Act of 1977, sponsored by Senator Proxmire, D-Wisconsin. It required evaluating lending institutions (banks) on their extending the "American Dream" of home ownership to what were marginally qualified applicants. Agents then were pressured to make more loans and too many succumbed by falsifying credit worthiness information. Clinton pushed it hard in the '90's. Mortgages were bundled and sold on up to Freddie Mac and Fannie Mae as something they weren't. FM and FM went along with it.

The house of cards collapsed in August 2007 resulting in the current crisis. The economy

is suffering because of it. Senator Kyl, Arizona, on the floor of the Senate several months ago, said that the blame 'belonged in this body right here'(or words to that effect).

No Bush administration policy is to blame for this bad affect on the economy.