As we remember the tenth anniversary of the 2008 banking crash which led to the Great Recession, let us not neglect to give credit to the man who, almost more than anyone, made the disaster possible.
Strangely, the liberal media – normally the first to praise Obama for even his most modest achievements – has been reluctant to acknowledge his contribution to this most momentous of global events.
But it’s true. As my old friend Christopher Booker notes in his Sunday Telegraph column, it all began with sub-prime mortgages – a disaster almost entirely of the Community Organizer in Chief’s making:
At the heart of this disaster was a 1995 amendment to the US Community Reinvestment Act, which imposed on banks a legal requirement to lend money to buy homes to millions of poor, mainly black Americans, guaranteed by the two biggest US mortgage associations, Fannie Mae and Freddie Mac.
No one had campaigned more actively for this change to the law than a young but already influential Chicago politician, Barack Obama. It was this Act that, more than anything, helped to create the US housing bubble, well beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. And in 2005, when moves were made to halt Fannie Mae’s reckless guarantees, no one more actively opposed them than the man who, by then, had become Senator Obama.
As official records showed, no senator received more campaigning donations from Fannie Mae (although Hillary Clinton ran him close). I first reported on this in January 2009, just after Obama had become president, noting how he had, by then, become vociferous in blaming the banks for the crisis.
I wrote about it again in January 2012, just after his State of the Union address in which again he excoriated the banks for having “made huge bets and bonuses with other people’s money”, while “regulators looked the other way and didn’t have the authority to stop the bad behaviour”.
This, said Obama, “was irresponsible, and it plunged our economy into a crisis that put millions out of work”. This may have suited the groupthink narrative of the time – that the crisis had all been the fault of those evil bankers (who, in many other ways, were certainly not blameless).
But, amid all the adulation then being showered on the new president (the BBC alone sent 400 of its staff to cover his inauguration), how tellingly few people recalled the part Obama himself had played in bringing about the worst economic crisis the modern world has seen.