Georgetown University’s legal and finance scholar Emma Coleman Jordan, and Bill Moyers look at the noise machine, which seems to be operating at full tilt:

BILL MOYERS: There’ve been a lot of voices on cable channels recently blaming this bubble, this crisis, the cause of all of this catastrophe we’re in right now, on poor people who took out mortgages that they couldn’t afford to buy home they wanted. They shouldn’t have. Watch these clippings and tell me what you think about them.

LAURA INGRAHAM: 1995 when Bill Clinton decided to tell, you know, Robert Rubin to rewrite the rules that govern the Community Reinvestment Act and push all these institutions to lend to minority communities, many very risky loans, that was a noble idea, perhaps, but that certainly wasn’t following free-market principles.

NEIL CAVUTO: I don`t remember a clarion call that said, Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.

LARRY KUDLOW: It’s time for the Congress, Republicans and Democrats, to stop encouraging, exhorting, and forcing banks to make low income loans with no documentation. Stop that. The community reinvestment act which was passed in the mid nineties, which was extended in the early 2000s, literally pushed these lenders to make low income loans.

BILL MOYERS: Lending to minorities and risky people. Do you see this, are they seeing this as issues of race and class?

EMMA COLEMAN JORDAN: Absolutely. And it’s a cynical manipulation. It’s reprehensible. And, in the worse tradition of Lee Atwater and the Willie Horton ad, to use race as a wedge issue to make people who pay their mortgages believe that the people who are getting the benefit of the 700 billion dollars, that we’re being asked to pay, are poor, minority people who caused the crisis.

This is unconscionable. This problem is not a problem that was caused by the Community Reinvestment Act. The data is very clear that the Community Reinvestment Act loans were being offered in a way to people that were much more responsible and had none of the characteristics of default that are being attributed in this discussion. And what this does is to say, this problem is a problem that was caused by black people.

And it means that it gives an opportunity to bring up that old wedge. But I think the people in the country are smarter today. I just don’t think it’s going to fly. I think that people understand that the enemy is not a person who got a home loan and was tricked into getting that loan by a fast-talking broker who originated the loan but that the problem was the securitization process, the high leveraging that Wall Street was doing, the lack of regulation.

Click for video:
Emma_moyers

>

Source:
Emma Coleman Jordan
October 3, 2008
http://www.pbs.org/moyers/journal/10032008/watch2.html

Category: Bailouts, Credit, Real Estate, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

77 Responses to “The CRA: Its a Racial Thing . . .”

  1. STS says:

    Thanks for speaking up about this, Barry.

  2. Thomas says:

    It is literally the old bait and switch. “Hey, what’s that over there?” when the bankers are being recapped with our money. I have no earthly idea what Obama believes in but I decided yesterday to vote for him. Biden might be a moron and yes I know Dodd and Frank are bought and paid for, but it is better than a kleptocracy. And yes, I know my taxes will be going up. Hopefully one of the parties implodes and we get a true libertarian/conservative party.

  3. OhNoNotAgain says:

    Yes, thank you, Barry.

    I find it despicable that certain segments of our society are allowed to constantly denigrate those that have absolutely no power for problems that were caused by these very same segments, the rich and powerful. Someone should drop Neil Cavuto off in South Central without a dollar to his name and see if he’s singing a different tune a year later. They’re all a bunch of fat, lying, do-nothing frauds.

  4. Eric Davis says:

    Gasparino got you going about this, Emotions are a bit thin these days…

    we are getting there, no worries

  5. ap says:

    I know that it is the “rushies”, the wingnuts, saying this – but it still makes me crazy.

    This, in yesterday’s nytimes was chilling – and I wish more congresspeople had read it before they voted.

    “They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

    The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary. ”

    “At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.”

    http://www.nytimes.com/2008/10/03/business/03sec.html?_r=1&em=&adxnnl=1&oref=slogin&adxnnlx=1223137617-agNBNZF4HCHac4EdLBh7LA

    So the SEC didn’t do its job after this dramatic change to the rules in 2004 – and Paulson was involved. How shocking – sadly not so shocking.

  6. Jay says:

    ‘the noise machine, which seems to be operating at full tilt…’

    the noise machine is broadcasting in stereo.

  7. wally says:

    Barry,
    These claims are, at the core, racist. They are also denial by the people who caused the problem and cannot admit it.

    Your Oct 2 post “Misunderstanding…” is the best debunking of these claims that I have seen.

  8. martin says:

    This CRA meme has really found some traction among the wingnut contingent. Anything to divert attention from the real issues. Certainly makes sense that forcing fine upstanding banks to lend to colored folks explains why Phoenix, Las Vegas and Miami are ground zero for the credit meltdown. Data free analysis they call it in B school.

    And it only further demonstrates what a total tool Larry Kudlow is.

  9. BG says:

    Thomas,

    I agreee there has never been a more critical time for a viable 3rd Party to rise up and save us from ourselves.

    There are too many good people at the bottom of the right and top of the left who have no voice in what is happening in this Country.

    This group is the real backbone of this Country and do not have a candidate in this election that has any chance of winning.

    I have decided to vote for Ron Paul. He makes more sense than anyone else; but, I know he can’t win. I don’t think I could live with myself knowing I voted for Obama or McCain. I have real problems with both of them.

    How do we wind up here? Where is our candidate? I love this Country; but, damn! I just don’t know anymore….

  10. Kelja says:

    Sorry, I’m not racist – I don’t fulfill that stereotype. But, the loosening of lending standards was certainly part of the problem.

  11. disgusted mortgage broker says:

    Thank you Barry for staying on this.

    An exceedingly large number of college educated whites, both male and female, have bought into the lie that the CRA is one of the primary sources of our financial problems. These are people who should know better, but are unaware of their own racial biases – and how readily these biases are manipulated by Bill O and Rush, et al. That or they are straight up racists.

    This is a signal moment to discredit the right’s covert racism. I understand there is pressure on Paulson to speak up on this issue.

    I mentioned this previously, but executive directors of various state mortgage broker associations have been mass emailing their membership variations on this outrageous racist smear. They need to be exposed for their racist hypocrisy.

  12. Jerry says:

    I received an email from a local kook, Frank Simon, with a letter explaining how the CRA is totally at fault and asking me to send it to everyone I know.

    He’s always on some moral campaign and it’s intent is always to misdirect blame and then demand punishment. These are the kinds of people that rally round the neocons. They aren’t part of the insider club so I’m sure why they do it unless it’s because they share the same hate.

    Regardless, the real perps are scared right now and rightly so. I suspect in the end most of them will be revealed and dealt with harshly. Others associated somehow but not at fault probably will be too.

  13. OhNoNotAgain says:

    “But, the loosening of lending standards was certainly part of the problem.”

    The CRA has absolutely nothing to do with the loosening of lending standards. Have you not even read Barry’s posts for the past two weeks, or are you just being purposefully ignorant ?

  14. BustaMove says:

    “But I think the people in the country are smarter today. I just don’t think it’s going to fly.”

    I spoke to my dad on Wednesday night and we got talking about the bailout plan and he brought up CRA as one of the main causes of this mess. He’s a smart man, but I can’t help feeling that the pundocracy can really steer people’s understanding of the situation. I hope Emma is right…

    Thanks, Barry, for this post (as well as the CRA debunk a couple of days ago)

  15. OhNoNotAgain says:

    “They aren’t part of the insider club so I’m sure why they do it unless it’s because they share the same hate.”

    This really puzzles me also. They seem to really believe in some sort of kinship with the people peddling this filth. It’s really just ignorant beyond all comprehension. These people that they admire and look up to would throw them under the bus as soon as it was convenient for them.

  16. bsneath says:

    Why are we so obsessed with playing the “blame game”? Lets move on and work on solutions to our dire circumstances.

    ~~~

    BR: You need to figure out how something broke before you can begin to fix it. And, you want to prevent the same breakage from occurring on the future.

    (The “Blame Game” ? How did that idiotic phrase work its way into the vernacular?)

  17. TulsaTime says:

    The real risky behavior is when every cracker and their brother get into ‘flipping’for fun and quick profit. Instinct tells me that makes up a bigger factor in mortgage security failures than any govt. program.

    Where there have been minroity loan failures, a large share have been where fast talking mortgage brokers steer people into loans that are not client suited, but broker enriching. There has not been a boom in recorded history where the slick and the fast talkers did not take advantage of anyone they could, and then blame the victims to boot.

  18. m3 says:

    “But, the loosening of lending standards was certainly part of the problem.”

    the loans that the CRA were responsible for were made by banks, and are all performing.

    the loans that are blowing up were made by non-bank institutions who were *not* under the CRA purview.

  19. I watched the interview. And though I agree with some of Ms. Jordon’s views, most of it is bullshit!

    Social Engineering more than anything else, lead to this ponzi scheme. Ms. Jordan actually made the comment that the poor didn’t have “access to home equity, as a cushion against economic misfortune”.

    ~~~
    BR: Go see this:

    http://bigpicture.typepad.com/comments/2008/10/federal-reserve.html

  20. Josh says:

    Welcome to the decline of the American empire…it only gets worse from here on out.

  21. m3 says:

    further, this blind right wing fundamentalist ideology needs to stop.

    it’s literally destroying the country. these guys have done far more damage than bin laden ever could.

    the levels of delusion that some of these guys show is incredible.

  22. DeDude says:

    Reality to right wingnuts:

    If Clintons pressuring the banks to make loans back in the late 90’ies is the cause, then why are all the defaulting loans wintage 2004-07 (a time when nobody had received a nasty letter from regulators about making more minority loans in several years)?

    Or is it the usual thing that the neoconmen creates their own reality, if the one everybody else lives in does not confirm their ideology and racism.

  23. RW says:

    What STS and others have said: The entire right-wing, “it’s all CRA/Frannie/Dems fault” utterly fails to stand up to close scrutiny.

    But it’s not just false, it’s a big lie, and this needs to be addressed too because those kinds of lies have a life of their own, tapping into dangerous territory within a heartbeat; e.g., Timothy McVeigh was not clinically insane nor even an overt Neo-Nazi, in his own mind he was a warrior for justice.

    Now clearly even as a spurious claim the CRA et al story serves a number of useful purposes for the neo-cons and Republicans generally:

    1. The lie obscures the rather straightforward logical conclusion that low regulation and trickle down polices not only doesn’t work as advertised but may be actively injurious to the economy (combined with crony capitalism such policies could even prove lethal);

    2. it also obscures or distorts the historical record and misrepresents the way the economy works and that’s not good for either a citizen or an investor – those who forget the past are doomed to repeat it and those who ignore the laws of supply and demand are going to lose a lot of money.

    However hooking into the cultural history of the United States elevates this to the Big Lie status since:

    3. It resuscitates the Southern Strategy with a new set of code words for colored people, the impoverished, Democrats or other perceived enemies; e.g., mortgage scammer is the the new welfare queen.

    4. And since Obama is black as well as a Democrat and was raised somewhat poor to boot (single mom on food stamps, student loans, etc) it allows a multiple level attack that can avoid overt bigotry while busily plucking all the racist and classist chords there are.

    I would not expect someone as obtuse as Neil Cavuto or as hidebound as Larry Kudlow to actually recognize the nature of their participation in this and suspect they might even be genuinely shocked or angered if accused but you can bet that all Karl Rove’s proteges, Steve Schmidt in particular, know exactly what is going on and how it will be used.

    Politics is a contact sport, not for sissies, but there are genuine policy disagreements that need to be addressed, a country that needs a better quality of governance than it has recently experienced, and Big Lies can seriously damage our ability or even our willingness to argue with those who disagree: This is not a good thing regardless of ones preferred candidate.

  24. Jack says:

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

    clarion call, perhaps?

    ~~~

    BR: Jack, Fannie/Freddie were definitely part of the entire machinery — corrupt and incompetent to say the least — but they were a modest factor, and had nothing to do with abdicating traditional lending standards.

    Don’t miss the forest for the trees . . .

  25. Daniel Kwiat says:

    Barry,

    Thanks so much for posting this. It was a fantastic interview.

    A few days ago, I tried to add in your comments area an absurd quote from James “Rev Shark” DePorre, which blamed the crisis on early Clinton Administration efforts to end loan discrimination. The comment was blocked because I said something like, “Rev’s post could have been titled ‘Blame the Black-Loving Liberals’,” except I didn’t use the word ‘black’. Sometimes subtly and perhaps unwittingly, as in Rev’s case, and sometimes not, as on the Rush L show, the housing debacle has been turned by the right polemicists into a white rage target.

  26. David says:

    Calling it racism is in itself a diversion tactic. MLK was not killed until he progressed from speaking of racial injustice and began to point out the real issue of economic oppression. He was in memphis in support of poor people, not blacks. There has been a war of rich vs. poor in this country for over 100 years now, and it’s the only real war we’ve really had for the past 50 years. Keeping the poor poor, and making sure there are plenty of them to exploit, has been a major right-wing agenda for that entire time. Letting minorities think that it’s their skin color keeps everybody looking the other way. There may be isolated individuals who look at skin color, but major policies are formed based on wallet thickness.

  27. Bob A says:

    One thing is for sure. The CRA discussion is not something all these commentators just coincidentally thought up at the same time, but a well coordinated talking point directed by our friends Republican National Committee. Designed and promoted by people who know better to mislead and influence people who don’t.

  28. MarkD says:

    I actually got into a bar argument about this CRA meme. When I pointed out to the asshat wing nut that BUSHCO had all the votes to do anything he wanted the first four years, and if CRA was so bad why didn’t he rein it in???
    About 6 evesdroppers applauded. Asshat and his buddy got off their stools stomped to the door turned and said “you dumb fucks are going to vote for that nigger and ruin this country” so in my small sample yeah it’s racist. BTW in this crowd it was 100 per cent office workers

  29. Donny says:

    You f*ckers are so caught up in your political ideology, you fail to have the commonsense to appoint those idiots responsible. Political Animals.

    When are those responsible, going to be held accountable? WHEN?

    “This is a motion, to do dis prntdly” Click on my name, and watch asshatery at its best!

    All of them should be thrown OUT!

  30. Bob A says:

    …and a lot, I’d venture to say the majority, of those no-doc low down mortgages went to nice white people from the suburbs, many of them driving around in gas guzzling Range Rovers, Escalades, Tundras and other ridiculously huge wasteful vehicles subsidized with 30% tax credit and tax reductions for the top tax brackets.

  31. Dan Duncan says:

    I don’t get what your point is here, Barry. If it’s to say that it is foolish–if not dishonest—to blame the housing implosion on CRA—OK, fine. I certainly agree—it’s foolish, even racist, to say we are here mainly because of CRA.

    But then again, I think it’s foolish to say we are here because of any one culrpit. There were many culprits—all of them conspiring together in perfect harmony— with Greenspan as Maestro.

    So….What’s the point of this Emma Coleman Jordan garbage?

    Are we now going to assert that homeoweners had no responsibility for this mess we are in? Or are we asserting that white homeowners are responsible, but that blacks were taken advantage of?

    How do you–or Moyers for that matter—reconcile this Coleman interview with the Moyers/Bacevich interview that you recently highlighted—where Bacevich essentially asserted that American citizens are just as much to blame for our country’s dysfunction, and that it’s myopic to simply blame government.

    My experience with troubled homeowners–and I have a lot of experience with them—is that they are just as culpable in getting themselves into this mess. They completely ignored the facts, were more than willing to fudge on the applications and let greed get the better part of discretion. Therefore, I think Coleman’s suggestion of “mandatory loan workouts” is terribly unfair to the rest who will ultimately pay for them.

    As far as Coleman’s assertion that blacks were unfairly treated….I agree that on a relative basis, blacks received worse loan terms than their white counterparts.

    But Coleman’s “analysis” of the situation is woefully inadequate—and she fails to “keep it real”. Blacks received worse terms on a relative basis, but not because of racism. Hell, these loan officers were more than happy to pummel the white borrowes whenever possible. No, the problem is/was that black homebuyers were not properly educated on the homebuying process. [Who's responsible for this education? The Center for Economic Justice, perhaps? If not, they why on earth is it in existence??]

    Black borrwers, in my experience, did not shop around as much as white borrowers. Plus—and I know many will hate this (hell, I hate stuff), but too often blacks would rely on black loan officers and black real estate agents with a naive sense of blind faith. People like Coleman–with her subtle, vague calls of racism, foster this blind reliance. I guarantee you Coleman and her Economic Justice Center have never researched the loans terms sold to black borrowers by black loan officers. I guarantee you the terms would be worse. Literally, it’s black on black crime.

    If you, Coleman or any other others who cry racism are truly serious about improving the plight of blacks and credit, here’s what you should do—and it’s simple—and it doesn’t involve shouting “Racism!” on a blog:

    Go to a black church or community gathering—and bring 3 good faith estimates. Tell them, “When shopping for a loan, don’t just go to a loan officer because he or she is black. Go to 3 different mtg companies, tell them you are ‘shopping’ and get 3 good faith estimates and play them off each other. At the end of the day, at least one of them will get you a fair deal. It is that simple. If all 3 are giving you shit terms, it means you have shit credit.”

    But the feckless frauds who get all warm inside as they talk about vague, meaningless abstractions like “Economic Justice” won’t do it. It’s too simple. Too basic, and it calls into question their very existence.

  32. CNBC Sucks says:

    Racists will always be racists, libertarian wannabe intellectualists will always be libertarian wannabe intellectualists, those who believe in American exceptionalism will always believe in American exceptionalism, until they get a passport and travel a few times outside this country, and I don’t mean on vacation.

  33. MarkD says:

    I actually got into a bar argument about this CRA meme. When I pointed out to the asshat wing nut that BUSHCO had all the votes to do anything he wanted the first four years, and if CRA was so bad why didn’t he rein it in???
    About 6 evesdroppers applauded. Asshat and his buddy got off their stools stomped to the door turned and said “you dumb fucks are going to vote for that n****r and ruin this country” so in my small sample yeah it’s racist. BTW in this crowd it was 100 per cent office workers

  34. Arthur Davies says:

    And left wing tin foil hat wearing wing nuts will pretend that this country is worse than all others and blather on about its downfall (which they hope happens.)

  35. larster says:

    Missing in this discussion is the fact that the city of Cleveland saw this coming in 2000, relative to the defaults rising substantially. tjhey met with the Fed and as the story goes, they had a nice lunch and that was it”. Georgia, hardly a liberal hotbed passed a law in 2003 (could be off by a year) that prohibited predatory lending and if proven, the mortgage obligation was null and void. In road the Comptroller of the Currency who made the ruling that national banks were not covedred by state banking law. so, georgia voted the law out so that their state banks were not operating under a disadvantage. The point is that there were many early warnings, nonme of which referenced the CRA. All referenced a mortgage system that was becoming the wild west where anything goes. It’s a systemic breakdown and to say it’s because of Clinton and the CRA is to repeat this all over again.

    Let’s state what it was, beause most of us know, and get on the road to solving the problem

  36. jackalope says:

    My running joke has been that this smear attempt won’t work, because they’re trying to frame the wrong scapegoat.

    The rules of racist scapegoating are simple: you blame black people for crime and government spending, hispanics for low wages, feminists for less-than-happy marriages or youth/education problems, and Jews for financial crises.

    They’re trying to apply blame the wrong scapegoat–that’s why they’re having such a hard time. I’m just wondering if we’ll get to the problem here being “government spending,” in which case many will happily embrace the racist scapegoating and blame black people.

  37. Winston Munn says:

    Two quotes come to mind:

    “Conservatives are not necessarily stupid, but most stupid people are conservatives.”
    - John Stuart Mill

    “Those who are too smart to engage in politics are punished by being governed by those who are dumber.” – Plato

  38. CNBC Sucks says:

    And blissfully ignorant morons like Arthur Davies will always respond with “And left wing tin foil hat wearing wing nuts will pretend that this country is worse than all others and blather on about its downfall (which they hope happens.)”, until they get a passport and travel a few times outside this country, and I don’t mean on vacation.

  39. Jagamohan Swain says:

    Wow Jim Rogers is one smart man.Back in the days, that was in 2003, I heard his interview where he predicted exactly this situation.He didn’t give the specifics, no one can, no one is that smart.But he did predict that when this housing bubble bursts more people will get hurt, there would be major social repercussions.The bubble hasn’t even burst and there you go.That reminds me that political correctness will apply as long as people are having a good time, the moment the good times are over the veneer disappears on it’s own.It’s gonna be interesting, coming few years.

  40. Sean North says:

    Emma Jordan is a black racist. Bill Moyers’ corruption is as documented as the banking lobbyist $ taken by both Democrats and Republicans. Get a clue, Barry.

    The leftist drama on this blog is horseshit. The system is corrupt because we have a governing class — not a limited government composed of virtuous citizens. This governing class buys its existence by making the citizenry increasingly dependent upon its largess. It’s proper name is redistribution (read “confiscation”) of wealth. This country has pissed far more money away on pointy-headed government bureaucrats touting their get-rid of poverty schemes and Democratic politicians shitting $ down the black hole of education (always spent, by the way, by the extorting teacher unions)than any assistance it’sever given to the middle class.

    If you left-wing nutjobs want violence in the streets, keep up the nonsense like you have here.

    No taxation without representation? Shit, you should see it with representation.

  41. rob says:

    So the government forces lending to people to whom credit should not be extended, and 15 years down the road the government has to kick in 700b to try to solve the problem.

    Why is anyone surprised by this?

  42. D Graham says:

    If you folks think that reducing credit terms to a large mass of the market had nothing to do with exagerating the price of real estate I have two properties for sale that I would like to sell you that cost me a couple hundred thousand more than they should have if sound credit policies had been fairly distributed across the board. Was Wall Street guilty of creative finance on steroids? Absolutely. Look, if you lower the standards for students you get dumber students. If you lower credit standards you will get higher risk. It is really quite simple and has nothing to do with race, class, religion, or sexual orientation. It is pure and simple relaxation of credit and elevation of risk.

  43. BarryB says:

    Barry,

    I hope you are right that people will not be fooled this time around.

    And I hope I live to see the day when the people that use these tactics (and their blind followers) are looked upon as lunatics.

  44. OhNoNotAgain says:

    “And left wing tin foil hat wearing wing nuts will pretend that this country is worse than all others and blather on about its downfall (which they hope happens.)”

    Hey Arthur, it is actual Republican and right-wing policies that have resulted in bringing about our downfall. We played right into Bin Laden’s hands with Iraq. We pissed away a surplus by cutting taxes when we didn’t need to. Greenspan and the Fed kept interest rates low so as to avoid any pain whatsoever during the Bush tenure. Lax enforcement of regulation has us eating tainted food and not trusting our food supply. It just goes on and on. I opposed all of these things and consider myself a liberal, so who exactly is looking out for this country again ?

  45. John says:

    Sadly, one of the things you liberals and libertarians don’t get (or haven’t admitted to for the last 30 years) is that a large majority of peasant population are dumb-asses. And think like fascists, which is what the Republican Party has become.

    You can go down a list of almost ANY problem in the US, which might be solved by some sort of government action, and put a racial spin in it. Don’t believe me?

    Transportation: say something totally stupid like Amtrak:
    Spin: This is just another one of those liberal programs to get the HONEST HARDWORKING people on public transportation. You know who’s on public transportation don’t ya? Yeah. THOSE PEOPLE!!! You figure it out. Those liberal hate cars, and they LOVE those people.

    Land Use: say something like Mixed-Use developments.
    Spin: This is just another one of those liberal programs to get YOU (point finger) to live with THOSE PEOPLE (point finger in a different direction). You know how those liberals are. YOU figure it out.

    The major racial group in the US has been cutting off its nose to spite its face since the civil-rights bill was passed. The Republicans have been successfully playing the race card for everything.

    Oh, I donno, let’s say 10 years ago ya wanted to deregulate the banks.
    Spin: We need to get the GOV-ern-MENT out of people lives (the dumb-asses remember how THOSE LIBERALS tried to make them live with THOSE PEOPLE! Those DAMN LIBERALS!) We need the government off the backs of the hard working HONEST bidness men who made America GREAT, by taking risks with the OWN MONEY (the dumb-asses remembers how ALL their tax money is going to THOSE WELFARE QUEENS! Those DAMN LIBERALS LOVE REGULATION!!) This great nation can only move ahead when THOSE PEOPLE who want reg-U-LATions on the HONEST people of America are voted out of office and replaced by Republicans; who will make government small and more responsible to the HONEST HARDWORKING PEOPLE OF AMERICAN (the dumb-asses fill in: YEAH, not THOSE damn people. Those DAMN liberals!).

    Sadly. All the guilt-ridden liberals can think to talk about however, is THOSE PEOPLE!

    The US is screwed. Sorry. I’m guessing we’ll have martial law by this time next year, when the dumb-asses go ape-sh1t over what THOSE PEOPLE did to the GREATEST nation in the whole wide UNIVERSE.

    Btw, I’m having dinner tomorrow with two dumb-asses that think this way. I’m sure I’ll get filled on who’s to blame for all this. You liberals are clueless; living in your fantasy world without dumb-asses. You’d all better wake up!

  46. OhNoNotAgain says:

    “If you left-wing nutjobs want violence in the streets, keep up the nonsense like you have here.”

    If something like that happens, it won’t exactly go down like you think it will. Just look at all of the populist revolts in this country that were centered around economics. There was only one that was about taxation, the first one. The rest were about war, jobs, wages, and the right to organize. And your “patriotic” bretheren on the right just shot many of them dead, including those that served this country in war.

    http://en.wikipedia.org/wiki/Bonus_Army

    http://en.wikipedia.org/wiki/Ludlow_Massacre

    http://en.wikipedia.org/wiki/Memorial_Day_massacre_of_1937

    Take your crap and spew it somewhere else.

  47. OhNoNotAgain says:

    “So the government forces lending to people to whom credit should not be extended”

    My God, man, can you even comprehend what you’re reading here ? Barry’s posts are demonstrating that this is completely 100% bullshit put out by the Republicans. What you’re saying is false, not true, made-up, fantasy. The government, through the CRA, never, not once, ever, forced a bank to make a loan to a person that did not meet the credit requirements for the loan.

    http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf

    I’ve personally talked to a friend in the mortgage division at HSBC, and she handles CRA loans. She backs up everything that is in that PDF link.

  48. KnotRP says:

    Incomes were not verified when making these loans…so how can anyone say, with a straight face, that they know what quintile the borrowers came from?

    That’s just pathetic.

    (There is a saying: “Well, if you aren’t going to use logic, I can’t argue with that.”)

  49. a different chris says:

    Jackalope, thanks for the laugh. We need it.

    >If you folks think that reducing credit terms to a large mass of the market had nothing to do with exagerating

    WTF is your reading comprehension problem? There was no “reducing credit terms” involved in CRA. This point has been made over and over again on this blog, from BR’s posts to informed comment.

    And even less, there was no “large mass of the market” involved. Do you understand what exactly MINORITY means? It means “not so many of them”.

    Jesus. Any other non-sequitors you would like to tee up?

  50. Jeff M. says:

    Barry – I’ve said this before, and although I much appreciate your tackling this issue, I wouldn’t waste too much energy on these people who revel and wallow in their own ignorance. It’s just not worth it.

  51. CNBC Sucks says:

    Since this thread is dying, Jeff M., let me cap it by saying, hey, it’s OK to be a racist registered Republican like me and VOTE FOR OBAMA.

  52. Jeff M. says:

    Right on, CNBC Sucks! I’d vote TWICE if I could this year. I know that voting O won’t be a panacea by any means, but the alternative is quite terrifying, so I’ve never been more motivated to vote in entire life.

    I’m guessing I’m not alone in those sentiments.

  53. Dougla Tuttle says:

    WOW! This subject really gets under people’s skins, so to speak. However, this has nothing to do with racism at all.

    Alan Greenspan’s 1% interest rates did not CAUSE anybody to dream up 100% no doc loans at teaser rates. But its so crazy, something must have forced this to happen.

    Yes: Wall Str had to sell all kinds of whacky (read high rate of return) investments to foreigners to help absorb our ridiculous trade imbalance. When they ran out regular mortgages, they refi’d everybody, and when that ran out they started selling McMansions to poor people. This was securitized every way from Sunday and passed off as AAA investments.

    Wall St took advantage of the greed of mortgage originators and brokers (big surprise) by paying handsomely for these loans to be written. It just was fodder for their cannons.

    Getting African Americans into loans they couldn’t afford was just targeting an untapped market, and that’s MBA 101. Nothing personal.

    Remember, though, this is all to keep dollars in America, regardless of who owns them.

    I submit that it is the increase of oil prices that really fueled the enormous trade imbalance that created the need (and opportunity) for these investments. So this housing crisis, that has morphed into a credit crisis, that has morphed in a derivatives crisis, is REALLY the oil crisis!

    Welcome to Peak Oil!

    See ASPO-USA web site for originators of this idea.

  54. bdg123 says:

    This just absolutely sickens me. We have consumer protection laws exactly because an individual can surely be taken advantage of with predatory tactics. The average consumer stands no chance against a major corporation’s marketing, legal, sales and strategy efforts. What happened was predatory.

    It is society’s responsibility to protect the least of us – be it those of us who are vulnerable to predatory lending, inalienable rights or any other protections. For God’s sake, have we lost so much of who we are to blame people who unknowingly were taken advantage of? I’m not talking about those who made foolish decisions or those who were greedy. I’m talking about those who were preyed on.

    The spin machine is disgusting and the people know it.

  55. yo brotha says:

    So the argument is that poor, uneducated blacks caused the collapse of the world’s financial system. How many people are we talking about since blacks make up less than 13% of America’s population. If you exclude all of the blacks that are in jail or are too old or too young to buy a house, what percent of the black population actually took out a loan? Even if every single black person who took out a loan defaulted on his mortgage, how does that explain multi-billion dollar investment banks going bankrupt?

  56. leftback says:

    Barry – thanks for dealing with this in such a direct and atriculate way. This racist crap is merely a distraction to prevent people from seeing the real culprits. This wasn’t a black, white or hispanic thing, it was a real estate and finance industry thing and that’s where we should be looking for the perps.

  57. j1 says:

    It’s all Wall Street’s fault

    no one else in the country had anything else to do with it , and when someone brings up FNM , FRE , CRA , etc. , it’s always pushed aside by all of the objective critics on these message boards

    btw , don’t read the NY Times article about FNM in today’s paper …. it’s all made up

    ~~~

    BR: See this:
    http://bigpicture.typepad.com/comments/2008/10/fannie-mae-and.html

  58. Simon says:

    Good point Mr tuttle lets not lose sight of the next looming obsticle to the fullfillment of the hypothetical american dream.

    FORGET THE DREAM get real, its about survival now.

  59. Sean North says:

    John @ 3:22.18PM

    Wikipedia — that’s where you get your information? WOW, what an intellectual! You tell me, “Take your crap and spew it somewhere else.” Typical Stalinist — can’t keep up with the intellect so kill the other side’s point of view.

    Leftist pervert.

  60. Francois says:

    “Emma Jordan is a black racist. Bill Moyers’ corruption is as documented as the banking lobbyist $ taken by both Democrats and Republicans. Get a clue, Barry.

    The leftist drama on this blog is horseshit. The system is corrupt because we have a governing class — not a limited government composed of virtuous citizens. This governing class buys its existence by making the citizenry increasingly dependent upon its largess. It’s proper name is redistribution (read “confiscation”) of wealth. This country has pissed far more money away on pointy-headed government bureaucrats touting their get-rid of poverty schemes and Democratic politicians shitting $ down the black hole of education (always spent, by the way, by the extorting teacher unions)than any assistance it’sever given to the middle class.

    If you left-wing nutjobs want violence in the streets, keep up the nonsense like you have here.

    No taxation without representation? Shit, you should see it with representation.”

    Sean…did you actually had something to say?

  61. Yolanda says:

    The CRA wasn’t the cause of this mess but lawmakers did attempt to build on the efforts of the CRA by requiring the secondary market to reach affordable housing goals without questioning whether the goals were attainable or realistic.

    NY Times, Pressured to Take More Risk, Fannie Hit a Tipping Point Oct. 4 ’08
    “Capitol Hill bore down on Mr. Mudd as well. The same year he took the top position, regulators sharply increased Fannie’s affordable-housing goals. Democratic lawmakers demanded that the company buy more loans that had been made to low-income and minority homebuyers.”

  62. Yolanda says:

    From the NY Time article, “When Mr. Mudd arrived at Fannie eight years ago, it was beginning a dramatic expansion that, at its peak, had it buying 40 percent of all domestic mortgages.”

    In 2004, HUD proposed the following goals. Docket No. FR-4790-P-01

    HUD’s Proposed Housing Goals HUD’s Projected Market Estimates

    2005 2006 2007 2008
    Low- and Moderate-Income
    52% 53% 55% 57%
    Underserved Areas
    38% 39% 39% 40%
    Special Affordable
    22% 24% 26%

    If Fannie Mae had 40% of the market and then is required to lend to borrowers so that 52% of its origination was to low and moderate income…how does this end?

  63. svg says:

    “And, in the worse tradition of Lee Atwater and the Willie Horton ad, to use race as a wedge issue to make people who pay their mortgages believe that the people who are getting the benefit of the 700 billion dollars, that we’re being asked to pay, are poor, minority people who caused the crisis.

    What utter nonsense.
    The right-leaning media members who were quoted MIGHT be wrong, but to hyperventilate and accuse them of racism is what *I* find reprenhensible.

    Why does nearly everything have to be attributed to sinister motives?

    I stopped reading this site on a regular basis because there are far too many nutcases with very predictable (negative, cynical) comments to each post. It has become more and more like the far-left blogs or Ron Paul cultists. Too bad.

  64. barry says:

    those horrible Negros. They created a $63 trillion credit default swap market and also forced LEH and BS to have 40x leverage on their balance sheets.

    If only the GOP had control of the executive branch.

  65. CatGut says:

    Hey buddy, can you spare me a dime? Or maybe just a couple trillion moolas. Deranged Lefties might consider what they would do if required by edict to invest THEIR OWN money in a neighbors home. What a giant scam this turned into and the seed (i.e. acorn) was started in greatly LOWERING lending standards that were promoted by the cowardly, socialist left. There hasn’t been a free market for anything in a hundred years!! You can’t hide this, get a clue, this is racism alright…coming from the Left as usual.

  66. CatGut says:

    Oh sure…beginning in the early 90s, banks just decided right out of the deep blue to ramp up their risk, dump established banking procedure and create fancy credit derivatives just to lure in poor folks to get at all their money! Man you got the cart way before the horse and you can’t hide it. The financials HAD to evolve these loans to spread risk into the credit markets because they had a gun put to their heads by congressional thugs and Clinton vote buyers, which was facilitated by their protected GSE piggy banks. The racists have begun their long sought reparations and now they own your house too. Votes to power bought with your money…classic.

  67. Sean North says:

    Francois, you asked, “Sean…did you actually had something to say?”

    I’ll explain, but you’re obviously French, so I’ll try and speak as plainly as possible.

    The problem WAS a lack of regulation — correct regulation of FRE and FNM (not government strangulation). THAT was opposed (just 4 years ago) by Barney Frank, Chris Dodd, Maxine Waters, etc. Have you checked to see how much $ was given to their campaigns by Franklin Raines (oh yeh: Joe Biden: $150,000). Charlie Rangel writes the tax laws from which he exempts himself.

    I find the Democrats despicable because for most of the 20th century, they set the tone in Washington. They controlled the Presidency (from 1932-1952; 1961-1969; 1976-1981; 1992-2001).When they weren’t controlling it, most of the GOP Presidents (Eisenhower, Nixon, and the Bushi) GOVERNED economically as Democrats. And remember: for almost all of that time, the Democrats controlled BOTH Houses of Congress. THEY have set the culture of corruption in D.C. I detest the GOP because they were corrupted by the system they inherited. I dislike Bill Clinton — but I abhor George Bush more. Democrats at least deliver what they promise. The GOP just gives us a little less Democrat for our $.

  68. jmc says:

    Racism is absolutely present. Blame minorities for the sub-prime crisis? IGNORANT!. But it works for all those who are frantic because McCain Palin are behind in the polls. The strategy is to transfer the racism to the sub-prime and financial crisis because you can’t say you won’t vote for Obama because he’s black. All of this is becoming vitriolic hatred bred of ignorance.
    The dumbing down of America–railing at “elite” when they mean people of rigorous thinking and intelligence. No wonder our students fall behind the world in math and science rankings—intelligence and knowledge are diminished. Folksy is the new “want to be”. Frightening.

  69. DeDude says:

    Sean North,

    So you are telling me that the things that Barney Franks and Chris Dodd etc. were opposed to 4 years ago all got killed because the republican majority were so scared of them. Gosh you must be coming from a parallel universe. In the one I lived in 4 years ago the republicans didn’t even want to lets these democrats talk in the house because it was such a waste of time to let them express their opinion before the neoconmen passed their legislation anyway.

  70. Sean says:

    DeDude — no I’m saying that too many “progressive” GOP House members have sided with these jackasses time and time again. The GOP banking committee chairman in the Senate and the House at the time were “can’t we all get along?” Republicans -NOT neocons. To say anything else is to rewrite history.

  71. DeDude says:

    Ohh I see; the treson of those enemies from within. When it comes to running away from the responsibilities of your failured ideology, you neocons realy are addicted to the old classics.

  72. Sean says:

    DeDude — learn spelling and syntax and then respond. Lord, it’s like corresponding with a high school student (which is probably literally the case). I’ve bashed the GOP on this Board, numbnuts. You have nothing to criticize in regard to Frank, Dodd, Waters and Rangel?

    Another Obama Koolaid drinker. You Democrats are like Stalinists with your non-deviating party line. Just can’t say anything bad (no matter how true)about the Comrades.

    Ironically, that’s exactly how we got into the mess against which you rail: refusal to face facts.

  73. DeDude says:

    You really are addicted to the old classics aren’t ya?

    This is about the economic mess we are in and the main reason why. Not what those democrats did or didn’t do way back in the old days when they actually had some power to do something.

    The fact is that the neocons were in solid control of all three branches from 2000-06 (that is from way before all those bad loans and financial instruments started taking hold). Even after the democrats took the house and Senate they have been fairly powerless because they cannot overcome a presidential veto on their own. So no matter how many contortions you go through you cannot lay this on any democrats.

  74. Wyatt_Earl says:

    1. Banks fought CRA. Still do. They don’t like it, but to get branch approvals and other regulatory approvals, they throw a few bucks toward poorer sections of their area. Money put into CRA is chump change, and the number of people in these units of banks is miniscule.

    2. Banks got on board the sub-prime train as fast as they could. They didn’t need it; they wanted it. They craved it. Everybody else was going to make a potful of money and by God they would too. They couldn’t get big enough fast enough in their subprime units, and the employee count is large. And as we all now know, the money was far from chump change.

    You know that scene from the movie “Dave,” where he puts his hands in a machine and says he once caught a fish “This Big,” as his hands go out a machhine-extented forty feet apart? That’s Subprime. Now hold up two fingers to make a V for victory sign. That’s CRA.

    You’re fighting the good fight, Barry.

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