An Important Point about the Recent Past
Barry Ritholtz has an important point to make about what led up to our current financial crisis which was strangely out of step with the sensible way humans use to consider important in extending credit throughout history:
Since real estate loans are at the bottom of all of our current credit woes, let's take mortgages as an example. The historical basis for making a loan for a home purchase was several simple factors: Employment history, Income, down payment, credit rating, assets, loan-to-value ratio of the property, and debt servicing ability. But for some crazy reason, those factors went away during the housing boom.
That may sound simple, but it becomes even more stark when viewed over a time line.
Except for that 5 year period, the entire history of human finance was rather reasonable about the basis for making loans in general, and extending mortgage loans in particular.
For all the blather about how it was Clinton's fault or the Democrats fault, it's pretty clear that the timeline for this insanity was when the Republicans were in charge.
That's what you get when you let people who let ideology and greed run over common sense and reality take control of our country. They truly are the Wrecking Crew who's sole goal is to pillage and neuter the government institutions they have infiltrated.