Subprime Scandal: With the housing market crashing again, the truth is finally dawning on some media elite that Washington played a bigger role in the mortgage mess than first told.
A new book, “Reckless Endangerment,” zeroes in on the corrupt partnership between Fannie Mae and Beltway insiders — who used the federally chartered firm as a giant slush fund to enrich themselves while pushing liberal housing schemes.
This may be nothing new to our readers, who have read as much on these pages from the first days of the crisis. What’s surprising here is the author — a New York Times business editor. And some of her colleagues are applauding her “courage” in breaking from the tired blame-everything-on-Wall Street narrative.
Refreshingly, the lead villain in Gretchen Morgenson’s book isn’t Lloyd Blankfein or some other “fat cat” banker. It’s ex-Fannie chairman Jim Johnson, one of many Clinton cronies who helped set the stage for the financial disaster back in the 1990s.
She blames Johnson and Fannie for fanning the easy credit flames by underwriting home loans for low-income minorities. But this is still only half the story.