THE FACTS ON THE MELTDOWN

Conservative pundits want you to believe that Fannie Mae, Bill Clinton, and Democrats are to blame for the current financial crisis. This fits in with the McCain-Palin narrative that we should fear people who aren't one of us ... they'll eventually cause trouble. The problem, according to McClatchy news, is the data (from the Federal Reserve) doesn't support the rhetoric:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

Simply put, the institutions making the risky loans were from the private sector. Worse, the institutions buying up all the bad mortgages in the secondary markets also turned out to be from the private sector.

According to data from Inside Mortgage Finance, between 2004 and 2006 (when subprime lending was exploding) "Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent."

One of the reasons the private sector institutions were able to make so many bad loans - and then buy them from each other - is because of deregulation that occurred in the securities and banking sector since the early 1980s. The President's Working Group on Financial Markets chimed in when they issued a statement saying the turmoil in financial markets "clearly" was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004.

No wonder the McCain-Palin rallies have taken such a hateful turn. With John McCain showing no understanding of economic issues, there are no "teachable" moments for him. Ignorance has been allowed to trump the facts. It's all they have now. Well, that, and the hate-filled rallies.

- Mark