Aspirin was Invented in Europe, Right?

There are about 60,000 miles of blood vessels in the human body. Yet if a pinpoint sized blockage occurs in exactly the right spot, it can quickly kill a person with 59,999.99 miles of otherwise healthy blood vessels. All it takes is one strategic blockage to bring the whole system down. Want an aspirin?

With that in mind, consider the line of argument you may have heard about the financial meltdown and how it could not possibly have been caused by subprime loans and the Community Reinvestment Act (CRA). The argument goes something like this: “Yes, there were some subprime loans that went bad and some of them were even mandated by the CRA which Bill Clinton re-wrote along with help from Barack Obama and ACORN to force banks to make really bad loans and yes, the bad lending was massively encouraged by Fannie Mae and Freddie Mac which again was championed by Clinton, Obama, ACORN, the Congressional Black Caucus, and the entire Democrat Party with an assist from some key Republicans including even George W Bush. But there were nowhere near enough of these government sponsored bad loans to explain the systemic meltdown we saw in 2007 and 2008. Nothing to see here. Move along.”

What is so fascinating about this argument is that I’ve heard it from some of the same economists and “experts” who argue that Greece may cause a chain reaction and bring down the Euro, then Europe, then the Northern Hemisphere, and finally the World! So we are being asked to believe that a country with about 2% of the entire GDP of Europe can bring down the whole world while Fannie Mae, Freddie Mac and the CRA couldn’t possibly have been the blockage that gave the financial system a coronary?

Can both of these views be right? Is most of Europe healthy to start with? Was the rest of the US mortgage market healthy too? What if there is both disease and a strategic blockage? I’m jus’ askin’.

PS You may want that aspirin just in case…