I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
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Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.
That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).
Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.
BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).
