A member of the Financial Crisis Inquiry Commission (FCIC) has accused the protestors in the Occupy Wall Street movement of misdirecting their anger at the private sector. Peter J. Wallison, a senior fellow at the Washington, D.C.-based American Enterprise Institute (AEI), wrote in a Wall Street Journal op-ed column that Occupy Wall Street crowds should take aim at the federal government.
‘Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis,’ Wallison wrote. ‘Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30 percent. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations, HUD raised the quota to 50 percent by 2000 and 55 percent by 2007.’
Wallison noted that over 70% of subprime loans were ‘held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution.’ While acknowledging that the ‘private financial sector must certainly share some blame for the financial crisis,’ he said that it was not the primary source of the crisis.
Wallison, who dissented from the final report issued by the majority of FCIC members, blamed members of the federal government and the media for poisoning public opinion against the private sector.
‘The narrative that came out of these events – largely propagated by government officials and accepted by a credulous media – was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible,’ he wrote.