The best synopsis of the history of "Why the Mortgage Crisis Happened" is a 7,344-word piece by M. Jay Wells published Oct. 26, 2008 on www.americanthinker.com. It is a story of how the federal government has been taking more and more control of the housing market, starting in the '30's with the establishment of Fannie Mae, the Federal National Mortgage Association. In 1968, as part of his Great Society reform, President Lyndon Johnson turned much of Fannie Mae into a government sponsored enterprise (GSE) with the authority to issue mortgage backed securities (MBS). Control, power, and money were concentrated.

All that concentrated money looked invulnerable. To share the wealth, Sen. Proxmire (Democrat) introduced a bill which was signed into law in 1977 by President Jimmy Carter, the Community Reinvestment Act (CRA), to encourage banks to make homeownership loans in underserved (poor and minority) communities. Encouragement was one thing, but banks were understandably reluctant to make loans to people with bad credit.

During the '80's radical groups such as ACORN began to pressure to reshape the CRA, to not just encourage but to force banks to make loans to people with bad credit, all in the name of anti-discrimination. During the '90's community organizer Barack Hussein Obama worked closely with ACORN, teaching the intimidation tactics of "direct action:" crowding bank lobbies, blocking drive-up teller lanes, demonstrating at the homes of bankers, telling the media that bankers who refused to make loans to people with bad credit were racists.

Agitators, including Barack Obama with ACORN, filed complaints of non-compliance and lawsuits against banks that adhered to safe loan policies. The banks caved. Credit standards were lowered. GSEs (Fannie Mae and Freddie Mac) were instructed by the Clinton administration to increase the percentage of risky loans in their portfolios.

During the early 2000s, corrupt bureaucrats skimmed millions of dollars of unearned bonuses off the top. Republicans began to make efforts to regulate the GSEs; these efforts were derailed by Democrats. Politicians received huge contributions from Fannie and Freddie, the top two recipients being Christopher Dodd, Democrat, chair of the Senate finance committee, $165,400, and Barack Obama, Democrat, senator, $126,349. And when the bad credit risks failed to pay their adjustable rate mortgages, they lost their homes. The housing market slumped, then crashed. The whole mortgage industry tottered, and the federal government decided to bail out Fannie and Freddie.

American taxpayers will end up paying for it, because governments, however much they like to brag about creating wealth, don't. All government money comes from taxes. A few Democrats have learned a lesson.

Representative Arthur Davis said, "Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong."

Sen. Barack Obama prefers to blame capitalism and the Republican Party. "I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It's a philosophy we've had for the last eight years, one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else."

I do not think our country's economy will benefit from the kind of change Barack Obama promises us.

Cynthia Walker Cynthia Anne Walker is a homeschooling mother of three and former engineer. She is a published independent author. Her column is published in The Dispatch every Friday.