How Rick Perry Fed the Subprime Mortgage Monster
—By Andy Kroll
| Mon Oct. 3, 2011 7:54 AM PDT
Texas Gov. Rick Perry. Gage Skidmore/Flickr
For all of Texas Gov. Rick Perry's jeremiads against big government and evil regulations, his state won a few admirers during the housing bubble for its surprisingly tough lending laws. Not that Perry didn't try to lure subprime lenders to Texas, plying them with tens of millions in taxpayer cash just as they ramped up their risky home lending.
In the mid-2000s, the Associated Press reports, Perry enticed then-booming lending giants Countrywide Financial and Washington Mutual with $35 million in state tax grants to grow their operations in Texas and create 11,000 new jobs. At the same time, those lenders were diving headlong into more risky lending, while the Perry administration dismissed the risks of subprime mortgages as blown out of proportion. The source of Perry's hand-outs to Countrywide and Washington Mutual was the Texas Enterprise Fund, a multi-billion-dollar economic development honeypot that critics have blasted as a slush fund used to funnel money to political allies and donors.
Here's more from the AP: