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Housing, especially sub-prime mortgages, was at the center of the financial crisis. The Community Reinvestment Act, which coerced commercial banks to make loans to folks who weren't creditworthy, was a big factor. Enacted in 1977, the CRA is a Democrat policy. Fannie Mae was also a prime suspect in the crisis, and Fannie was created by Democrats in 1938, during the New Deal era. The "implicit guarantee" of certain "government-sponsored enterprises" (private companies like Fannie Mae) and the securitization of
mortgages are also Democrat policies.
Also mentioned is the repeal of Glass-Steagall, along with some other causes.
Author concludes with this:
Insofar as "the policies that caused the mess in the first place," Democrats already have a corner on that. As long as they refuse to acknowledge the consequences of their own policies, Democrats cannot be taken seriously.
1980s
With CRA came increased oversight of lending institutions to ensure they were giving credit to low- and moderate-income communities. Regulators expressed that CRA was not designed to compel credit allocation, nor did it require risky lending practices. Moreover, ECOA (Equal Credit Opportunity Act) and FHA, not CRA, were in place to address discrimination in
lending. But community organization groups like the radical ACORN began efforts to reshape CRA into governmentimposition, in accord with what "affirmative obligation" might suggest. They began pressing the semantic open door and stretching the "discrimination" provision to complain about enforcement of the regulations as lending institutions resisted bad lending practices in poor minority communities.
August 1989
To deal with the savings & loan fallout of the 1980s, Congress enacted the Financial Institutions Reform Recovery and Enforcement Act. In a move with ominous portent, FIRREA mandated public release of lender evaluations and performance ratings, resulting in added pressure on the banking industry. Such public oversight enabled bullying abuses of community organization groups like ACORN to further influence bank lending practices.
1990s
With the mechanisms in place, the community organizing groups began developing directed strategies to exert more and more pressure on the lending industry in the cloak of complicity with CRA. Community organizer Barack Obama worked closely with ACORN activists. Employing the radical Alinsky intimidation tactics Obama had learned and was teaching -- "direct action" -- activists crowded bank lobbies, blocked drive-up teller lanes and demonstrated at the homes of bankers to browbeat risky lending in poor and minority communities. Those who resisted were accused of racism to the media and government officials.
I have much, much more. I could fill pages. There is little disagreement on the root cause of the crisis of 2008. Further, Republicans had warned for years that colapse was inevitable. Democrats refused to listen at the hearings that were held, and mocked the Republicans for trying to create a crisis where none existed.
We now know how it turned out.
Still want to argue?
How about I continue to rely on my professional knowledge of how the housing markets in low income, CRA affected communities actually works, and you can continue to copy/paste from wildly inaccurate Americanpotato opinion pieces. How about that?
I don't know haw many readers have read the Sept. 30, 1999 article by Stephen A Holmes in the NY Times that warned about the CRA. I attached the article from Snopes which maintains that it is the truth.
It was not conservative "economic theory" that caused the 2008 housing crash. It was the Democrat's CRA, forcing banks to make bad loans to people who couldn't pay, because Democrats think home ownership is a "right."
Sorry, this horse has been beaten to death already. It's been five years of Democrat economic policy now, and were much worse off than we were in 2008.
Time for a change in leadership. Way past due.
Nonsense.
Ground zero was the investment grade ratings assigned by independent credit rating agencies to many private label MBS derivatives. These investment grade ratings allowed pension plans, retirement funds, insurance companies, mutual funds and the world to gorge on them. These investments were the source of funding super sub prime loans. Had these securities been more appropriately rated by the independent credit rating agencies, conservative institutional investors would have taken a pass and thus the super sub prime loans could not have been pawn off. Cause and effect and all that.
BTW, Republicans controlled both chambers of Congress 1997-2007.
This situation was not red or blue.
The color of greed is green. So many were making or spending so much money they did not bother to question it.
Originally Posted by Boss View Post
Walmart today cut its outlook for 4th quarter (current 1st). They site loss of foodstamps, UI, low wages.
See CNBC news feed.
The lack of economic activity in a consumption based economy will bring on a recession.
The conservative economic theory is going to hurt. Just as we saw leading up to 2008, good chance their theories will hurt again.
Quote:
Originally Posted by nononsenseguy
It was not conservative "economic theory" that caused the 2008 housing crash. It was the Democrat's CRA, forcing banks to make bad loans to people who couldn't pay, because Democrats think home ownership is a "right."
Sorry, this horse has been beaten to death already. It's been five years of Democrat economic policy now, and were much worse off than we were in 2008.
Time for a change in leadership. Way past due.
That is right, it was democrats who said there was not a problem with lending money to people who could not afford to pay the money back. Yours truly Barack Obama sued Citibank forcing banks to lend money to these people. He fathered the housing crash.
In the 1995 class action lawsuit in question, Buycks-Roberson v. Citibank, the plaintiffs alleged that Citibank had racially discriminated against them when they sought home loans. They pointed to bank data indicating that "the percentage of loan applications approved by Citibank was far lower in areas where the racial composition of the neighborhood was predominantly African-American than it was in areas where the composition of the neighborhood was predominantly White," even when the applicants were in the same income bracket.
Obama's participation in the lawsuit makes him "a pioneering contributor to the national subprime real estate bubble" and part of a movement that "contributed greatly to a housing bubble that burst in 2007, crashed the nation's economy in 2008.
Wow. The Color of greed is green and not red or blue. I like it. Great post. I would only use quotation marks when writing about these so-called "independent credit rating agencies"
Quote:
Originally Posted by middle-aged mom
Nonsense.
Ground zero was the investment grade ratings assigned by independent credit rating agencies to many private label MBS derivatives. These investment grade ratings allowed pension plans, retirement funds, insurance companies, mutual funds and the world to gorge on them. These investments were the source of funding super sub prime loans. Had these securities been more appropriately rated by the independent credit rating agencies, conservative institutional investors would have taken a pass and thus the super sub prime loans could not have been pawn off. Cause and effect and all that.
BTW, Republicans controlled both chambers of Congress 1997-2007.
This situation was not red or blue.
The color of greed is green. So many were making or spending so much money they did not bother to question it.
I don't know haw many readers have read the Sept. 30, 1999 article by Stephen A Holmes in the NY Times that warned about the CRA. I attached the article from Snopes which maintains that it is the truth.
But in the late 90s, the Democrats and Republicans, in a rare act of bipartisanship that just warms the heart, refused to allow the SEC to regulate credit default swaps. They also agreed, in essentially repealing Glass-Steagall, to allow commercial banks to merge with investment banks, creating massive, too big to fail financial monsters.
Congratulations, you fail basic reading comprehension. At no time do I hang the hat on either party, it was clearly a bipartisan mess.
What's your source? I can post more. I have tons in my archives on this.
We all know about the housing crash and why banks were forced to give out loans.
I cannot tell if this is a serious statement.
No bank was ever forced to lend money.
No individual was forced to suck the premature equity out of their home and use it to live beyond their means.
No individual was forced to buy real estate they could not afford, unless home values were going to experience compounded double digit appreciation, for eternity.
How about I continue to rely on my professional knowledge of how the housing markets in low income, CRA affected communities actually works, and you can continue to copy/paste from wildly inaccurate Americanpotato opinion pieces. How about that?
LOL
Sorry, but those articles were not written by "American Thinker" which doesn't author anything. AT prints articles from authors, many of whom have their own blogs, are freelancers with other jobs (lawyers and other professionals in various industries, etc.) Almost all of the articles that AT publishes were also published elsewhere on the Web as well.
But nice try.
Any of these authors could claim you are "widly inaccurate" as well. What are your credentials? Have you ever published anything?
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