# What is the "small/no government" solution to the BP spill? **URL:** \ **Category:** Great Debates\ **Created:** [July 7, 2010, 3:17pm UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868 "2010-07-07T15:17:01Z")\ **Posts on this page:** 5\ **Page:** 3
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [July 16, 2010, 7:14pm UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868/41 "2010-07-16T19:14:05Z")
> [@Ludovic](#): > > The derivatives that were the prime mover in the collapse were barely regulated – much less so than other instruments. Moreover, repackaging of mortgages had been going on for decades before these new styles of derivatives showed up. They were absolutely not encouraged or created in any sense by Congress. Bad loans were absolutely encouraged by Congress through Fannie Mae. ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [July 16, 2010, 9:10pm UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868/42 "2010-07-16T21:10:34Z")
> [@Magiver](#): > > Bad loans were absolutely encouraged by Congress through Fannie Mae. Cite? Specifically, a cite showing FNMA’s percentage of the subprime market (assuming that “bad” and “subprime” are equivalent here) from the years 2001-2008 relative to private institutions. It seems I’ve not bookmarked the cite I had; if you find one, I think you’ll be in the position to either (1) pin the blame someplace else (the CRA, most likely) or (2) at least partially retract your statement. My understanding is that if private institutions were driving the market demand for subprime loans at that point in time, we can say that _they_ were more responsible for encouraging “bad loans” than Fannie Mae.\* Or I could be wrong. However it works out, my understanding of the situtation will increase, which is my desired outcome. \*I should note that private institutions encouraging more bad loans than FNMA doesn’t mean FNMA didn’t encourage bad loans at all. Just that it’s dishonest to slam Fannie (heh) while not mentioning that the actual driving force was private institutions. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [July 17, 2010, 11:31pm UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868/43 "2010-07-17T23:31:54Z")
> [@Magiver](#): > > Bad loans were absolutely encouraged by Congress through Fannie Mae. Fannie and Freddie did not write mortgages. They insured them. The weakness in mortgage analysis was at the lower levels. The mortgage originators were not keeping them so they did not care. They were quickly sold.Then they were bundled and sold again. So the finance bank did not care either. The originators and banks were making billions . They corrupted the rating agencies so they could keep doing it. Then the banks sold insurance on mortgages. They sold insurance many times the value of the mortgages , which meant they knew they could not pay them off if things went bad. That is fraud. So tell me how Fannie is at fault. The government can encourage you to get poorer people in homes. You can refuse. You can make your own standards. You don’t have to sell mortgages to people who can not afford it. Fannie could not force you to do that. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [July 18, 2010, 3:22am UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868/44 "2010-07-18T03:22:11Z")
> [@gonzomax](#): > > Fannie and Freddie did not write mortgages. They insured them. :rolleyes: It was a government attempt to put low income people in houses and it blew up in our face. ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [July 18, 2010, 3:43pm UTC](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868/45 "2010-07-18T15:43:31Z")
> [@Magiver](#): > > :rolleyes: It was a government attempt to put low income people in houses and it blew up in our face. Since you’re still posting in this thread, could you please address my post above? Again, my question to you concerns how you can legitimately lay the totality of the blame for “bad loans” at FNMA’s feet. Or, of course, you could retract and stop using that talking point. I thank you in advance… [Previous page](https://boards.straightdope.com/t/what-is-the-small-no-government-solution-to-the-bp-spill/545868.md?page=2)