Posted on 01/25/2009 8:47:56 AM PST by wartman
We’ve all heard it. In the last couple months, the refrain of “deregulation and lack of government intervention” caused the financial crisis we’re currently working through. However, a quick look back shows that this wasn’t the case. In fact, it’s pretty clear that the real cause is the exact opposite: the crisis was caused by too much government intervention.
The fairy tale usually goes like this: greedy financial companies gave unfair subprime loans to borrowers who couldn’t qualify for standard mortgages and hid in the fine print the real terms of the mortgage in an attempt to fraudulently enrich themselves.
There are so many logical fallacies and outright laughable stupidity in that above fairy tale it’s almost hard to take seriously anyone who actually believes that. But, I’ll try.
1) The first fallacy that needs to get out of the way is that the mortgage companies handed out the subprime loans because they didn’t care whether the person would be able to stay in the home or not. That idea shows a strong ignorance of the way credit institutions work. No one wanted the borrowers to stay in their homes more than the lending companies. If the mortgage goes into default, the lending company stands to lose a lot of money. Foreclosure is a losing proposition for the lending company.
2) The subprime loans we’re given out in the first place because the Democrats demanded it. This is a historical fact. It shouldn’t be hard to follow the logic:
* Democrats demand that poor borrowers be given access to mortgages. * Because they have poor credit, these borrowers cannot qualify for standard mortgages. Hence subprime interest rates. * The banks then bundle these mortgages into securities which are purchased by a government sponsored entities nicknamed Fannie Mae and...
(Excerpt) Read more at jeffwartman.com ...
Why don't you just cut and past and tell everyone what page and paragraph that is found on.
CRA does not do this!! You don't know what you're talking about! I wish this were the case, but it's not. If you have a case study I'll be glad to look at it, but no one yet has shown this as a major cause as to why we have the financial crunch.
All CRA does is to make sure banks are not discriminatory in their lending practices. Redlining is just one facet of CRA. Banks are not "forced" to give out loans to people who can not afford them. No bank is required to do this!
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.
The agitators could now stall or hijack bank mergers by filing complaints of non-compliance against the institutions. Lawsuits alleging redlining and racism began flooding the court system. With the prospect of expansions and mergers threatened, banks settled cases and, significantly, increasingly made loans they would not have normally made. The net effect, as ACORN litigation increased, was that credit standards lowered.
http://www.americanthinker.com/2008/10/what_really_happened_in_the_mo.html
What I don't think Bush, his merry band of legislators and the banks took into acount was the American public's vehement refusal to accept what he and they were trying to shove down our throats.
You can believe he was just a sap, but I don't.
Bush is a moderate namby, but there's no way he was trying to bankrupt the economy. He just had the same idiotic mindset as the foolish dems.
What mindset is this?
Ok, I can see this was a tactic used by the COZ. ACORN is an obvious culprit. But this still doesn’t explain what we are facing economically. You just don’t lend money to poor credit risk because in the end you know you’re going to take a bath.
It’s economics 101. We’re talking millions of bad loans here and I’m telling you there may have been a few banks pressured to make loans to the bad risk, but they wouldn’t have been able to make these bad loans without some kind of backing....F&F!
Yep.
Irrelevant? Debate? Hardly irrelevant considering Republicans have taken most of the blame for the current crisis.
There has been little if any debate recently, the MSM has continued to cover for the Dems. Only a small percentage of Americans are aware of the efforts of Frank/Dodd to block any regulations to bring subprime loans under control.
CRA is all about preventing discrimination. It goes right in line with Bush's stupidass compassionate conservative crap! Look, Bush is a methodist, these people all concern themselves with "nice" and "helpful."
If anything Bush is a "nice" man and he wants to "help" poor people no matter how misguided his plans may be. Some democrats are actually "nice" people who want to "help" others even though the way in which they want to act on their plans is with a terrible lack of judgment and horribly ill-conceived.
I don’t disagree with you. I was addressing the very narrow point of the CRA intimidation tactics some banks were facing.
You are correct in a great sense. Rubin’s hands reek with an almost treasonous stench, but he did not act alone. I want you to understand that I was born a conservative republican, I cried in the 7th grade when Agnew was forced to resign, but deregulation was pushed as hard by Phil Graham (R) of Texas as anyone. There are a lot of dirty hands here. We have been let down by the people we supported. I kinda always expected that from the Dems.
...And I agree with your assessment, but it's just a small piece of the puzzle.
Think about this - If you have a way to sell a loan and not have to take the fall for a default, but yet make some money on the sale of the debt, you're going to do it every time, because you're in business to profit, not fail! So the gov't made it possible for banks to sell to people that could not really afford the loans, but the problem is the gov't didn't have the resources to back up the loans it gave the banks the ability to sell to poor risk borrower's.
That's not the banks fault!! That's not even "greed," it's common business sense.
OK, you win (in your own little mind).
Factor in the Cloward-Pavin strategy and the insanity makes sense.
Dont forget this link of what you’ve got now.
http://www.youtube.com/watch?v=VAoZCd9LWNg&feature=related
Nothing personal, but how do you know what Bush is really like?
Have you met him? Spent any time with him?
Or, are you basing all of this on what his PR folks want you to see?
You might be on the wrong thread. The link you posted seems to be Obama bloopers.
The link I posted, unlike yours, is pertinent to this thread, showing Bush pushing these crap liar loans to millions of unqualified minorities.
http://www.youtube.com/watch?v=eW9viaJatpo
The man has been President for 8 years and you can't tell what he's like? You can't judge the content of his character? You haven't read about him? I'm basing this on my personal view and my research on the man.
I dare say there is nothing I've seen to make me think any differently. What, have you met him and he gave you the monster goggley or something?
the only difference in today’s R party and the D party is that the D has us in the express lane to socialism. The R is in the slow lane behind the guy in the hat and the old lady with blue hair. I’m coming to hate them both-when a conservative does emerge, the country clubbers in the R party do nothing to defend that individual-look at the way so-called R’s treated Palin. The Peggy Noonans, Arlen Specter, William Kristol-are just as bad as the D. The lack of R opposition to the Clinton, Holder and Gehtner nominations is vile and sickening. And the Rs are going to get rolled on this terrible “stimulus package”.
bttt
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