To the Editor:
“Reflections on the DNC” (West Newsmagazine, Sept. 19) has Sowell at his simplistic best in pointing to “inconvenient facts” (various government agencies pressuring lenders to lower their standards in order to get lower class borrowers, especially minorities, into houses they can’t afford). He would actually have us believe that is what “led to the housing bust that brought down the whole economy.”
Of course, Sowell chooses not to mention other “inconvenient facts” which might lead to the view that it was not the big “G” of government so much as the big “G” of good old-fashioned greed that provided lenders with all the incentives they would ever need to fraudulently “help” unqualified borrowers to apply for mortgages which they could never pay off.
Sowell disingenuously observes that “lenders don’t make money by lending to individuals who don’t pay them back” when he knows full well that is exactly what they did – with relish.
Lenders eagerly took their fees and commissions, bundled up thousands of mortgages into neat little packages and added to their profits by selling them, not only to Fanny and Freddy, but to hundreds of unsuspecting American and overseas banks and institutions, thereby setting the stage for the Great Recession here and all across Europe.