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Obama is still blaming Bush. Guess what? I've been thinking about the flow of events back then.
There was something called "mark to market". Mark to market means that the prices for an asset have to be adjusted to reflect their current prices in the market. Seems reasonable. But wait. If you apply this principle to the banks, which are leveraged out the wazoo, there's a problem. That's because a downward move in the market suddenly puts the banks in the red on the property. That makes the banks vulnerable to just the kind of thing that we experienced in 2008.
Some folks think "mark to market" is a good thing. But it doesn't mix very well with a highly leveraged financial system. It requires that assets always increase in value. If the opposite occurs, lending institutions or the ones holding the mortgages are going to be in big trouble fast.
They tried to spread the risk around, but this backfired too. There were so many who were exposed to this that the credit market froze up. This guaranteed a recession.
The response to this appears to have been to reflate the assets that lost their value. But at the same time, the government also passed a lot of self-serving and self-defeating measures. One of which was ObamaCare.
Obama can blame Bush all he wants. But after nearly 5 years, it's his responsibility now. This blaming Bush routine is getting old.
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