The administration argues that the cause was greed on Wall Street and risky loans, Wallison said. He said the real cause was a housing bubble that took down financial firms who were over-invested in subprime mortgages that all defaulted at once.
The government created that bubble by lowering standards, Wallison said. Government policy to lower home mortgage standards is a bad idea, experts say | Washington Free Beacon.
Lowering standards too low contributed to, but did not cause, the bubble. The bubble was caused by greedy Wall Street banksters throwing money at loans way below the governmental standards.
Guys like Wallison, Ed Pinto, and many others at the American Enterprise Institute, make their living via false propaganda spewed for the sake of privatizers who want little to no regulations. It was the lowering of regulations that allowed the crash! The downturn would never have happened, including with the lowering of governmental standards, had the privatizers not gotten their way de-regulating and buying off rating agencies (foxes guarding chicken coops).