You need to re-read the article you posted. Also, as far as what came before what, the CRA DID precede other contributing factors. It’s a matter of historical record. I can’t help it if you can’t or won’t do the research.

Some of what the guy in the article says is true, but it is also true that it was the policies and abuses of Fannie Mae and Freddy Mac, brought about by the Democrats that, coupled with the CRA forced loans eventually led to catastrophic consequences when the real estate bubble burst.

Econ 101 – apparently a lot of people didn’t take it in college or simply doodled in their books during class. Hell, it doesn’t even take a college class to learn the basics about all this. Of course, it’s difficult to unravel all the complexities of cause and effect, but the essential causes are there for anyone to see.

I gave an example of two people far more qualified than yourself, who do deny that it did. Your response? That it undeniably did. A flat statement from The Troll, with no expertise cited to back it up. Come on, it’s okay if you need to quote Rush Limbaugh or something… just don’t leave us hanging on your personal expertise, for which we have zero credibility to attach it to.

WHAT IS A SHILL?

.

ACORN bragging about getting
Fannie Mae involved with the sub-prime loans and using Fannies AAA rating to attract investors in the mortgages

Another national agreement between ACORN and Fannie Mae broke through the last major barrier to expanding home ownership opportunities to low-income families. Even when banks had agreed to ACORN’s innovative underwriting standards, they were limited by the secondary mortgage market’s refusal to buy the loans. After a series of negotiations, Fannie Mae launched a $55 million pilot program in 11 cities to purchase mortgages from banks which have reinvestment agreements with ACORN. In the two weeks following announcement of the program, ACORN offices received 4,360 calls from community residents seeking information about it.

The latest agreement between Fannie Mae and ACORN opened the secondary market for below market interest rate loans. Fannie Mae will bundle ACORN-counseled loans and securitize them. With Fannie Mae’s AAA credit rating, the resultant ACORN Mortgage Backed Securities become attractive to socially motivated investors. The first one for $10 million of loans originated by NationsBank was purchased by Allstate Insurance.

http://web.archive.org/web/20010428122414/www.acorn.org/25-anniversary/community-reinvestment.html

An who is hip-deep in his involvement with ACORN? Barack Obama.

There is no question that the policies of Fannie Mae and Freddie Mac were at the center of this debacle as well. Their policies mirrored the wishes of their benefactors in the House and Senate and they returned the favor in the form of huge campaign contributions. Again, there is no question of the complicity of the Democrats in perpetuating the unsound practices of these two institutions. The political goal of increasing home ownership in “underserved” communities was a success.

Now it’s true that sub prime lending wasn’t totally to blame, but there is no question that political interference in the free-market system helped sustain the Ponzi scheme and fuel the housing price bubble which had to burst at some point.

Fannie Mae and Freddy Mac bought tons of what would eventually become extremely devalued “assets” as a result of government policy. Lenders were more than happy to unload high-risk loans on them because they could.

Another contributor to the eventual devaluation was the lack of equity. Since you could get loans with zero down, it increased vunerability to any downturn in home prices.

The problem I see is that the mainstream media, mainly CNN, MSNBC and others who are in the tank for Obama keep repeating the lie that it is all the fault of de-regulation and the current administration!

Is that why the President and CEO of the Federal Reserve Bank of San Francisco said, in the Opening Remarks to the 2008 National Interagency Community Reinvestment Conference:

“There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households.”

Almost half of the subprime mortgages were issued by institutions not covered by CRA; another 25-30 percent by those only partially covered by CRA.

In testimony before the United States House Committee on Financial Services, Law Professor Michael Barr testifies:

“Critics of CRA assert that it leads to unprofitable lending. But the weight of evidence suggests otherwise. In a Federal Reserve Board survey of CRA-covered institutions, most responded that CRA lending was profitable or marginally profitable, and not overly risky.9 Pushing further into low-income markets under CRA has not weakened banks’ profitability and soundness. In the small “special programs” that serve as banks’ CRA laboratories, employing new and innovative strategies, most institutions reported low delinquency and charge-off rates. In fact, most institutions surveyed reported a net charge-off rate of zero for these programs.”

He also states that in his own judgment, “the worst and most widespread abuses occurred in the institutions with the least federal oversight”.

So, there are those that can hardly be termed “ignorant”, who heartily disagree with your interpretation of the CRA’s effect on the current crisis.

Unless I am supposed to believe that a professor of law who:

1) Teaches classes on Financial Institutions, International Finance, Jurisdiction and Choice of Law, and Transnational Law.

2) Earned his B.A., summa cum laude, from Yale University, an M. Phil in International Relations from Magdalen College, Oxford, as a Rhodes Scholar, and his J.D. from Yale Law School.

3) Served as a judicial clerk for Justice David H. Souter of the Supreme Court of the United States, and for Judge Pierre N. Leval of the Southern District of New York.

4) Was a special adviser and counselor on the Policy Planning Staff of the U.S. State Department, 1994 to 1995.

5) Was Treasury Secretary Robert E. Rubin’s special assistant, 1995 to 1997.

6) Was deputy assistant secretary of the Treasury for community development policy, 1997 to 2001.

… is somehow more ignorant on this particular subject than Tim Vaculik, famous internet poster… I’m going to lean toward believing his evaluation of the matter.

The mystical magical market…harummphh.

Well, some of what you say contains grains of truth, but if businesses always act in their own self-interest, that is, making profits, then it follows that we ought to be doing everything we can to help them maximize profits by staying here, not moving their HQ’s to more capital-friendly countries, like Dubai. I would hardly call that country little more than a “… post office box”.

Dubai is just one example of countries that get it. Dubai wants to become the New York of the Middle East, an economic and banking powerhouse. Despite what you say, taxation of business and capital formation in this country is higher than it ought (or needs) to be.

I guess I just get steamed when I see people vilifying companies and making them into villians when they are not the true problem.

We didn’t get into this mess because of de-regulation. It was government regulation and social engineering experiments that got us into the sub-prime mess to begin with.

It started back in the Carter administration with the community re-investment act and progressed from there.

Now who was it again that stood in front of the Democrat-lead banking committee calling for oversight of Fannie Mae and Freddie Mac?

That’s right, it was Republican administration officials all the way back to the first President Bush. The last opportunity that the Democrats blocked was in 2005.

It was the Democrats who played a big role in allowing the excesses of these GSE’s, my ignorant friends.

Get a clue!

Tim: Many American corporations off shore their income to tax havens. Yes, these are little nations that have nothing more than a post office box and titular ownership of technical data rights and patents. The other nations that have no tax like China really do well for their people in terms of preventing pollution and encouraging democracy and human rights.

Tim: The cost of government remains the same whether the taxes are paid by corporations or individuals. You see, you can tax corporate profits and have a portion passed on as part of the price of a product or you can just go back and increase individual taxes. Now Tim, you will take issue with that and point at the admirable record of the Republicans in lowering taxes for corporations and individuals. However, that is just charging expenses on a credit card with the $10 trillion in debt that we now have. The butcher’s bill for that little spending spree in now coming due.

Tim: I am sure that you are going to tell me that we have to benefit businesses and wealthy persons to increase job creation in the US. However, we both know that that is not true. Retained corporate earnings hit new highs during the Bush tax cut extravaganza. Investment in the US by these corporations just an illusion while investment went to out source US jobs to foreign countries.

Tim: You will tell me how these corporations have to participate in globalization and must maximize shareholder value by screwing over the American people. However, I have been part of corporate America with a large aerospace manufacturer. I will tell you what happens. We outsource the jobs, the plant engineering, the engineering and within a generation, we see foreign manufacturers in command of the technology. This is what happened with Japan and the United States with robotics and automotive.

Tim: You keep ahead by investing in your own technology and developing new products that create a premium price. The US used to be good at that. However, we have outsourced too many of those new technologies.

Lastly Tim, corporations receive many benefits from this government. The current bailouts just happen to be one of them. I guess it would just be too much to want them to pay taxes.