International Investing

Caroline Baum places the blame where it belongs:

From legislation to root out discrimination in mortgage lending, to the resultant relaxation of lending standards, to the tax-advantaged status of housing, “the aggressive pursuit of homeownership as a benchmark for success is at the root of the problems we’re seeing today,” says Mark Zandi, chief economist at Moody’s Economy.com.

Reasonable people can disagree over the extent to which the 1977 Community Reinvestment Act, designed to eliminate the practice of “redlining” minority neighborhoods and denying those residents credit, contributed to today’s rising default and foreclosure rates among subprime borrowers. But most agree that government policy played some role.