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A Project of The Annenberg Public Policy Center

Oversimplifying the Fiscal Crisis


It’s finger-pointing time again, with each candidates blaming the other for the financial crisis. McCain called Fannie Mae and Freddie Mac the “catalyst” for the crisis and blamed Obama for failing to sign on to a bill to rein in the FMs. Obama countered that it’s a culture of deregulation and lack of oversight that caused the problem.

We’ve been here before. Both candidates have a point: Democrats really have fought regulation of the FMs and McCain has in fact been in favor of deregulation.

But Clinton signed and a lot of other Democrats supported much of the deregulation in question. And while McCain did sign onto a 2005 bill to regulate the FMs, he did so just two months before the housing bubble popped.

In fact, there’s plenty of blame to go around. Experts have blamed everyone from homebuyers to mortgage lenders to Alan Greenspan to both the Bush and Clinton administrations.