How did that deregulated free market housing bubble work out for us?
Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.
This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.
Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.
So Dems cause the housing crash that put us where we are.
The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets, or denying access to jobs to residents in particular, often racially determined, areas.
if the redlining, which was a result of capitalism did not occur, then there would have been no need for the CRA.
nowhere in the CRA law does it force lenders to give out loans to those who can not afford them.
Yes, the gov't DID force banks to grant loans. I know several loan officers who told me that if a group like ACORN filed a complaint, gov' t pressure was put on them to meet a quota of low income/risky loans, and if they didn't they would suffer sanctions like denying mergers etc. It got to the point that banks just complied, meeting the quota by handing out these very risky loans, to avoid the sanctions and legal costs of fighting it. Then they began coming up with "products" and bundling loans to sell etc, to try to make back what they were losing in the risky loans they were FORCED to grant.
Canada had no such gov't intervention in their banks, and didn't have the bubble or meltdown. In fact the very folks who try to blame Repubs for the housing meltdown, Barney Frank, Chris Dodd, and Maxine Waters, were the ones most guilty of pushing and enabling this insane policy.
Obama was one of the guilty parties as well!
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By STANLEY KURTZ
Last Updated: 3:53 AM, September 29, 2008
Posted: 3:53 AM, September 29, 2008
WHAT exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.
In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.
In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.
THE seeds of today's financial meltdown lie in the Commu nity Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.
CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.
Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.
In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions.
Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets.
Fannie and Freddie acted in response to Clinton administration pressure to boost homeownership rates among minorities and the poor. However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.
ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.
Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.
http://www.nypost.com/p/news/opinio...K;jsessionid=957FC72106B3EA21B38E63213692A538
