Well that's certainly the talk radio main theme. They beat that sole theory to death. CRA certainly made the problem worse and got democrats to live and vote in republican districts but....
1) Many more buyers bought property they couldn't afford assuming the bubble was real (guess why?) than those under CRA, many middle class good earners lured into investment because of bubble there were assured was REAL ECONOMIC GROWTH!
2)Bush promoted CRA goals and took credit for them,
3) Bush promoted illegal Hispanics who were the big beneficiaries of CRA.
President Bush Mortgage Speech 2002(Helping those w bad credit buy houses)
“1) Many more buyers bought property they couldn’t afford assuming the bubble was real (guess why?) than those under CRA, many middle class good earners lured into investment because of bubble there were assured was REAL ECONOMIC GROWTH!”
The “bubble” was artificially expanded not just because of the low rates but also because of government distortions from mortgage deductions and coercion by regulators that forced bankers to qualify many more risky applicants for home mortgages.
Remember those “toxic” securities? The regulators permitted the bankers to repackage the risky loans into securities instruments and derivatives. Remember the screams from European investors (both private and governmental) when they saw their value evaporate back in Fall of 2008? They (and many of us) were suckered into buying mutual fund shares that included these toxic assets.
Barney Frank, Chris Dodd, Fannie May, and Freddie Mac are the biggest perpetrators of this horrific mess. We need to keep the heat on them for lying about their part.
I am convinced that the leftists purposely planned the hysteria as the “October Surprise” that strengthened Obama and caused John McCain to flounder.
It’s good to see someone else realizes the CRA was not the main culprit.
It was so obvious that people were overpaying for property and borrowing too much against their homes. So, when talk radio started blaming the CRA, I did some research myself. And I found out the real story was very different.
Then I had to debate with people (in person and online) over that CRA theory. My point was: Maybe the CRA is a bad policy; go ahead and repeal it. But, it’s not the source of the blame for the mortgage crisis.
The interest rates dropped too low by the Fed led to a housing bubble. And everyone (Main St. AND Wall St.) went nuts buying and selling overpriced property and bad securities. I thought the stock market was a good comparison, and I tried to explain it that way.
But, no one would listen to little ol’ me. ;-) So, I was so glad to see the Peter Schiff video (of his lecture at Von Mises) because here was someone, who was in favor of small gov’t and who’d predicted the crisis, saying exactly what I’d been trying to explain. He compared the mortgage crisis to a stock market crash. And he never mentioned the CRA. He explained it much better, though, and he was more fun to listen to. ;-) I’ve been sending the video link around.
You may be sick of libs, but I'm sick of your baldfaced lies against Bush.
You disgust me with your utter dishonesty. You are contemptable.