At an event in Lansing, Michigan Monday, Rick Santorum put forward an alternate theory for the cause of the financial crisis in 2008: that rising gas prices caused Americans to default on their mortgages, leading to the wave of foreclosures that sparked Wall Street’s near collapse.
“We went into a recession in 2008 because of gasoline prices,” Santorum said to a hotel ballroom of supporters. “The bubble burst in housing because people couldn’t pay their mortgages because of $4 a gallon gasoline.”
This isn’t the first time Rick Santorum has offered up his gas price theory. Earlier this month, he made the same claim in Colorado (via the Colorado Independent):
“We went into a recession in 2008. People forget why. They thought it was a housing bubble. The housing bubble was caused because of a dramatic spike in energy prices that caused the housing bubble to burst,” Santorum told the audience. “People had to pay so much money to air condition and heat their homes or pay for gasoline that they couldn’t pay their mortgage.”
Rather than blame predatory use of subprime loans or the unwieldy derivatives market, Republican candidates have named other causes for the financial crisis. Ron Paul, perhaps predictably, blames the Federal Reserve. In debates throughout the fall and winter, most GOP presidential candidates agreed it was Fannie Mae and Freddie Mac which caused the collapse; they claimed political correctness had forced the agencies to lower their lending standards, leading to a systematic series of bad loans.
Santorum appears to be the first to advance the gas price theory, and he does so at a time when Republicans are looking at rising gas prices as a new opportunity to attack President Obama. However, as BuzzFeed’s Zeke Miller points out, the extensive report on the causes of the crisis by the Financial Crisis Inquiry Commission made no mention of gas, gasoline, or energy as triggering the crisis.
