It's as many of us always said it was...all a result of the Community Reinvestment Act -- a liberal wet dream created by Jimmy Carter and allowed to become an uncontrolled monster by Bill Clinton.

http://www.washingtonpost.com/opinions/burning-down-the-house/2011/06/30/AGeRSGuH_story.html?fb_ref=NetworkNews&fb_source=home_multiline

1. It's George Will, so of course he is going to take a shot at libs. (Still, I love George)
2. The 1977 law was a good in theory, as remember inner cities were slums, rundown and full of crime. The hope was to get people out of the rundown slums and into homes, suburbs. A rehash of the 1950s , but things obviously went crazy.
3. I'd agree this was one part of the problem. But, one cannot ignore the ability of big banks to lend without any oversight. AIG, Bear Stern Merril, etc. all used the lack oversight on swaps to game the system and trade crap further endangering our system.
4. As I've said time and again, the recession was a perfect storm of bad Government policy, lack of Government oversight, and the worst aspects of the free market.

that was the only cause? weird, i'm pretty sure that republicans have had many the opportunity to correct this legislation, but we cant blame them for that can we? partisan politics are all the same, blame the other party, and act like yours did nothing to worsen the issue.

lets be honest, if you identify as a "republican" or a "democrat", and can't understand that one party cannot create the shit that we are in alone, you're completely retarded.

ptown_trojans_1;820813 wrote:1. It's George Will, so of course he is going to take a shot at libs. (Still, I love George)
2. The 1977 law was a good in theory, as remember inner cities were slums, rundown and full of crime. The hope was to get people out of the rundown slums and into homes, suburbs. A rehash of the 1950s , but things obviously went crazy.
3. I'd agree this was one part of the problem. But, one cannot ignore the ability of big banks to lend without any oversight. AIG, Bear Stern Merril, etc. all used the lack oversight on swaps to game the system and trade crap further endangering our system.
4. As I've said time and again, the recession was a perfect storm of bad Government policy, lack of Government oversight, and the worst aspects of the free market.

George is only quoting the authors of the book...and I very much doubt those authors share his political views.

All of the things that came after Clinton put the law on steroids most definitely played a huge role in the collapse. But IF THE LAW NEVER EXISTED and our government stopped trying to recreate basic economics through legislation -- we wouldn't have had this mess.

Everything has A cause. The CRA was THE cause here.

Another example of legislation created "with good intentions" blows up and ends up with unintended consequences. Why shouldn't everyone own a house? Why do evil rotten Republicans clamor for more homeless? Why shouldn't we all have equal outcomes?

The next example for the list is ObamaKare, wherein everyone will be mandated to purchase health insurance or risk imprisonment, you can keep your plan if you like it regardless of whether your employer will continue paying for it, premium costs will magically decrease with 30 million more "purchasers", Medicare costs will tumble because...well...ummm...uhh...they said they would, the deficit will decrease with a sprinkle of pixie dust and we'll wonder why we were so afraid of it. :rolleyes:

Writerbuckeye;820828 wrote:George is only quoting the authors of the book...and I very much doubt those authors share his political views.

All of the things that came after Clinton put the law on steroids most definitely played a huge role in the collapse. But IF THE LAW NEVER EXISTED and our government stopped trying to recreate basic economics through legislation -- we wouldn't have had this mess.

Everything has A cause. The CRA was THE cause here.

Yeah, he was quoting the authors of the book. Still, its George so take it with a grain of salt like any Op-ed writer. It's his summary of the book btw.
Yes, I agree without the laws things obviously would not have spiraled out of control. However, also what really caused the current crisis (the reason why it took 30 years) is the lack of oversight pulled by the Congress, especially during the late Clinton, early Bush years. That is when the growth of the credit default swaps grew and large companies like AIG and Bear could trade them without oversight by the SEC.
Without those repeals and growth of swaps, I doubt things would not have been as bad as they are.
It was an awful mix of the law, and the free market exploiting the law.

ptown_trojans_1;820863 wrote:Yeah, he was quoting the authors of the book. Still, its George so take it with a grain of salt like any Op-ed writer. It's his summary of the book btw.
Yes, I agree without the laws things obviously would not have spiraled out of control. However, also what really caused the current crisis (the reason why it took 30 years) is the lack of oversight pulled by the Congress, especially during the late Clinton, early Bush years. That is when the growth of the credit default swaps grew and large companies like AIG and Bear could trade them without oversight by the SEC.
Without those repeals and growth of swaps, I doubt things would not have been as bad as they are.
It was an awful mix of the law, and the free market exploiting the law.

It wasn't like efforts weren't made to reign in what was happening. Every one of those efforts was rebuked by the oversight committee, led by Barney Frank and the black caucus. Watch for yourself how they lied...

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Writerbuckeye;820878 wrote:It wasn't like efforts weren't made to reign in what was happening. Every one of those efforts was rebuked by the oversight committee, led by Barney Frank and the black caucus. Watch for yourself how they lied...

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Wait just a minute. Barney & the Black Circus were only looking out for the little guy. :rolleyes:

Writerbuckeye;820878 wrote:It wasn't like efforts weren't made to reign in what was happening. Every one of those efforts was rebuked by the oversight committee, led by Barney Frank and the black caucus. Watch for yourself how they lied...

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Sure, that is one part of it. No argument from me on that one. Freddie and Fannie were awful.
But, so was the deregulation of the Federal Default swap sector by the SEC that allowed the major banks and then major financial institutions to have free reign over trading these toxic assets.
Fannie and Freddie were only half the story.
It was also AIG, Bear Stern and Merril that nearly brought us to total economic collapse.

There were some Frontlines as well as the latest HBO movie that discussed the topic.

There would have been no (or less) toxic assets to trade if (1) the CRA had not been created and then pushed as policy or (2) the attempts to reign in what was happening (as shown in the video) had not been thwarted.

Writerbuckeye;821996 wrote:There would have been no (or less) toxic assets to trade if (1) the CRA had not been created and then pushed as policy or (2) the attempts to reign in what was happening (as shown in the video) had not been thwarted.

Again true.
But, without the deregulation in the late 90s early 2000s (both Clinton and Bush), then we probably would have continued like we had during the 80s and early 90s.
That same Congress also balked at the SEC for trying to step in a oversee credit swaps.
We are in agreement Writer, I'm just saying there are more layers to the story and cause.

Don't disagree about the layers...just making it clear where the root of the problem is found. It it were an onion, your Wall St. brokers would have been among the first layers removed when figuring out the problem. What these authors are writing about is the root that spawned the rest of this toxic vegetable.

Sure, but it was the big banks and financial markets that nearly brought our whole economy down in 2008.

My view is, it is a 50/50 blame. Bad policy and then bad free market practices. The perfect storm.

Bad regulation and then no regulations/not enough regulation where it was needed is to blame.

Pretending it was all liberals or conservatives is fucking stupid.

ptown_trojans_1;822114 wrote:My view is, it is a 50/50 blame. Back policy and then back free market practices. The perfect storm.

While it may be 50/50 it's the proverbial which came first, the chicken or the egg argument.

I lean toward Writer's onion analogy. Had it not been for implementation of seriously flawed and misguided CRA policy that got the ball rolling, the abuses by the financial markets due to lack of regulatory oversight may never have occurred at all.

I'm a firm believer in "what goes around, comes around." This is a classic example.

Do we realize how dumb it sounds to say " hey since this terrible policy is in place, lets go ahead and do bad business and try to ruin this country for a quick buck".

In all reality , government, banks and the american public all share the blame.

The banks were doing basically what Washington wanted - making a bunch of cheap loans. They took steps to hedge, it wasn't like they were intentionally taking huge risk but no one knew the depths of the cross-default risk. This has happened numerous times in the financial industry where they overly rely on flawed risk models. I'm not absolving the banks of blame, but saying it was all greed is a little bit of a Wall Street-bashing talking point.

gut;822250 wrote:The banks were doing basically what Washington wanted - making a bunch of cheap loans.

More accurately "what Washington required."

believer;822348 wrote:More accurately "what Washington required."

If you read back about this issue...bank officials talk about how there was a lot of pressure from bank regulators to increase housing loans, particularly in certain areas. Remember how some banks were being accused of red lining (marking areas on maps that were low income that wouldn't qualify for housing)? Clinton and his administration really pushed hard at the banks to get them to make more home loans.

He wanted to be able to say his administration was able to get more people into homes than any other in history. Well, he got his wish, but it came with a huge price down the road.

I'll be the first to admit that the financial industry is certainly a party to this mess, but I have no doubt in my mind that they were "encouraged" by the Feds to take the risks and play the hot potato mortgage game.

gut;822250 wrote:The banks were doing basically what Washington wanted - making a bunch of cheap loans. They took steps to hedge, it wasn't like they were intentionally taking huge risk but no one knew the depths of the cross-default risk. This has happened numerous times in the financial industry where they overly rely on flawed risk models. I'm not absolving the banks of blame, but saying it was all greed is a little bit of a Wall Street-bashing talking point.

Risk you say. What risk? Wasn't Freddie and Fannie standing behind these loans? It was all legal and Bush saw what was happening in 2006 in requesting investigations into these corrupt institutions. Barney and Chris ran the Congress, so they essentially told Bush to shove it, they were in charge. Then...when it all blows up in 2008....guess whom THEY blamed????

I can remember having to pay Private Mortgage Insurance (PMI) on a couple of my early mortgages. It was to remain in force until I had 20% equity in my property. I was upset, as the lender was the one being protected and I had to pay the premiums to them. However, I understood it was a program to prevent people from defaulting and walking away from their obligations. Sure, the PMI folks were pretty inquisitive in their investigations into my finances and employment, but they decided the risk factor and provided a foundation for the bank to make the mortgage loan. Essentially, Fannie and Freddie became the Private Mortgage Insurers for these sub-prime loans. Just to be clear...Fannie and Freddie = you and me. We were told by Barney and Chris that these institutions knew what they were doing and taking precautions to prevent a housing crash. Huh....here we all are with declining home values, foreclosed homes flooding the market-place and further driving down home values for everyone, and a sour economy that relies heavily on the housing market; just like Bush was worried about. The media won the day in crucifying Bush, Barney got re-elected, and Chris retired with his pension and Fannie/Freddie going-away presents. And people wonder why the Tea Party is upset with the uncontrolled spending and lax supervision of government.

Dammit. I just wasted my entire lunch break responding to this thread and accidentally Xed it out. Quite frustrating especially considering that simply google searching or reading wikipedia would provide a multitude of sources that suggest that the CRA is merely a scapegoat and that most CRA loans were not risky but Writer already has this conclusion made up in his head and finds one source (much less reputable than others suggesting it wasn't a prime factor btw) and cites it as conclusive proof. So I thought I'd post a more interesting article that would have applied had I been successful in posting and not failed.

New evidence suggests that Facts do not matter in the formation of people's beliefs and that, when faced with facts, people's misinformed beliefs grow stronger.

http://articles.boston.com/2010-07-11/bostonglobe/29324096_1_facts-misinformation-beliefs

There's any number of reputable sources that challenge two NY times writers contentions that the CRA was the sole and primary cause of the subprime mortgage crisis but it would be an utter waste of time to even bother.

I mean jeez there was a bubble in both the Commercial and Residential real estate markets and the CRA only covers primarily urban residential real estate when the residential bust was largely exurban.

Does that ever happen to anyone else...you write out a post (instead of doing work you should be doing btw) and then you accidentally delete it? Very annoying.

tcarrier32;820820 wrote:lets be honest, if you identify as a "republican" or a "democrat", and can't understand that one party cannot create the shit that we are in alone, you're completely retarded.

Or, as Lewis Black puts it:

And the only thing worse than a Republican or a Democrat, is when these two pricks work together.

believer;822434 wrote:I'll be the first to admit that the financial industry is certainly a party to this mess, but I have no doubt in my mind that they were "encouraged" by the Feds to take the risks and play the hot potato mortgage game.

I doubt they needed much prodding. And then the mortgage game wasn't even all of the problem. It was a bunch of the other investment "products" that helped wreck that industry.

[video=youtube;CZGk_wVgq_0][/video]

"The Democratic party which is a party of no ideas, and the Republican party which is a party of bad ideas. And the way it works is the Republican stands up in congress and goes "I GOT A REALLY BAD IDEA" and the Democrat says "AND I CAN MAKE IT SHITTIER!"

I Wear Pants;823281 wrote:And then the mortgage game wasn't even all of the problem. It was a bunch of the other investment "products" that helped wreck that industry.\\

No, all the problems and near collapse were pretty much 100% related to mortgages. While cross-correlation of assets didn't help, nothing outside of mortgages comes close to bringing them down, nor could anything else really mitigate that mess.

And you can blame the banks for nearly wrecking the economy, but even if you had reigned in risk there you STILL have a housing bubble. It's interesting with super low interest rates we've seen little inflation but have had several asset bubbles.