>>>But also calling for accountability of the very oversight processes she was part of setting up - now that takes some courage.
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>>You already know the cure for ineffective regulation is MORE REGULATION!
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>The Bush administration and GOP failed to provide needed government oversight of the mortgage-backed securities market - we all know how that turned out. Meanwhile the GOP still wants deregulation and still thinks trickle down economics will work. You'd THINK they would learn - but guess not.

You do know that the crazy mortgage market was caused by government oversight and regulation, right?

That the sub-prime loans existed at all was a direct result of the "Community Reinvestment Act" which forced bankers to write mortgages to borrowers with less than perfect credit and multi-family loans.

If it had stopped with just the CRA, it would probably have been ok.
A banker I knew said that their CRA loans had surprisingly low defaults. (at first)

Later, Fanny Mae and Freddie Mac had a big political push to increase home ownership and accepted not just sub-prime but horrible loans that should have never been underwritten.

We did work for mortgage companies during this period, so I did talk to some (minor) players.
Here is what they said:

One of the executives said that Fannie and Freddie had driven sane lenders out of the market.
A friend of his had passed up a lot of money and left the industry because he thought it was "just wrong."

Another guy, the owner of a mortgage brokerage, kept driving a beat up old Ford Explorer while his sales people bought new high end Mercedes, BMWs and Audis.
When I teased him about his old car, he said that "This won't last, I am keeping my money in the bank."

The guy who really cleaned up was the owner of a software company that specialized in defaults.
He started investing heavily in his mortgage defaults product when defaults were so low he nearly went out of business.

The take-away is this:
The private players could see a totally unsustainable market that had been created by regulation.
They did not create that market, nor could they affect what was wrong with it.

Most of them did stay in the market and made big bucks while it lasted.
Should they have taken a moral stand and just left the market?

Regulation was the direct and proximate cause of the crash.