It really is incredible to see such a concerted effort to rewrite history in front of our faces. There is not much ambiguity in the story of the housing bubble. The private financial sector went nuts. They made a fortune issuing bad and often fraudulent loans which they could quickly resell in the secondary market. The big actors in the junk market were the private issuers like Goldman Sachs, Citigroup, and Lehman Brothers. However, George Will and Co. are determined to blame this disaster on government “compassion” for low-income families.

In The Monster, Michael Hudson gives us a detailed account of the how Roland Arnall created Ameriquest and made it into the giant of subprime lending. In the process the book implicates the major Wall Street firms, most importantly Lehman, who eagerly packaged junk loans into mortgage backed securities and more complicated instruments. He also notes the corruption of the three major credit rating agencies, who received big fees for giving these assets investment grade stamps. The list of aiders and abettors includes Massachusetts Governor Deval Patrick, California Governors Grey Davis and Arnold Schwarzenegger, and even the community group ACORN.