O made this economy a mess not Bush (68)
I guess we need to post this again.
The CRA was not the only contributor to the crisis and I never claimed it was. But its undeniable that the 1970s-era law gave birth to the problem by pushing banks to lend to low-income households and relaxing lending standards across the board. It is true that the Bush Administration later went whole hog for the program to expand home ownership, but that was after 30 years of mismanagement by previous administrations, particularly Carter and Clinton.
Regulators charged with enforcing the CRA's required banks to adopt many of the loan practices that turned out to be toxic. Everything from 100 percent loan-to-value ratios to no down payment loans were part of the package that banks used to satisfy the demand of regulators.
Could the banks have used other lending methods to meet CRA requirements? Perhaps. But no one can say for sure that these would have made regulators happy or have produced enough loans to low-income and minority borrowers. What worked was what the banks actually did, and so they kept doing it. The lax lending standards were a proven method of satisfying regulators, and they were fully approved by regulators. More than approved. The regulators lavishly praised banks that adopted these innovative lending strategies.
The Federal Reserve Bank of Minnesota attempted to absolve the CRA by claiming that only a small percentage of subprime loans were related to the act, but that argument doesn't hold up to the facts. In reality, once banks lowered lending standards to attract CRA borrowers, they found that they had to lower lending standards across the board. It simply wasn't possible or legal (thanks to anti-discrimination laws) to offer the lax standard loans only to the targeted borrowers. In short, if a bank wanted to raise the number of CRA loans, it had to lower standards across the board. The broader subprime market was basically a creation of the CRA.
The way the CRA was enforced guaranteed that the bad lending practices would spread like wildfire across the country. Banks that were found to be in compliance with the CRA were granted permission to acquire other banks. Banks that were not in compliance could not make acquisitions, which often meant they couldn't grow at all. The only known method of compliance was lax lending standards. This means that banks that lowered their lending standards grew through acquisitions, while banks that kept their standards high got acquired or stayed small. This process went on for years, creating a kind of perverted financial Darwinism. It was survival of the lax-ist.
When market processes began to counter-act this regulatory Darwinism, the politicians stepped in to keep it going. Once the proper political pressure was brought to bear, Fannie lowered its own standards and we got securitized subprime. Now banks could meet their CRA obligations while passing off much of the risk to others.
Sonia Sotomayor's policy was eventually adopted on a national level to disastrous effect. I'm sure she never intended that home ownership for low income people be built upon terrible lending, this was the unintended consequence of the policy. Clearly, the program to extend home ownership to the poor was not something created by predatory lenders alone. They operated in cooperation with do-gooders who believed traditional lending standards were unwarranted and operating to prevent deserving people from buying homes.
The boom-bust in housing can't be blamed entirely on the CRA, and it doesn't absolve the corrupt lenders, the bubble-headed securitizers, the blundering ratings agencies or the careless MBS investors. But it DOES show that the government, through the CRA, had a strong hand in creating the kind of mortgage products we now regard as the source of the problem. Back then, they were regarded as part of the solution.
The CRA was not the only contributor to the crisis and I never claimed it was. But its undeniable that the 1970s-era law gave birth to the problem by pushing banks to lend to low-income households and relaxing lending standards across the board. It is true that the Bush Administration later went whole hog for the program to expand home ownership, but that was after 30 years of mismanagement by previous administrations, particularly Carter and Clinton.
Regulators charged with enforcing the CRA's required banks to adopt many of the loan practices that turned out to be toxic. Everything from 100 percent loan-to-value ratios to no down payment loans were part of the package that banks used to satisfy the demand of regulators.
Could the banks have used other lending methods to meet CRA requirements? Perhaps. But no one can say for sure that these would have made regulators happy or have produced enough loans to low-income and minority borrowers. What worked was what the banks actually did, and so they kept doing it. The lax lending standards were a proven method of satisfying regulators, and they were fully approved by regulators. More than approved. The regulators lavishly praised banks that adopted these innovative lending strategies.
The Federal Reserve Bank of Minnesota attempted to absolve the CRA by claiming that only a small percentage of subprime loans were related to the act, but that argument doesn't hold up to the facts. In reality, once banks lowered lending standards to attract CRA borrowers, they found that they had to lower lending standards across the board. It simply wasn't possible or legal (thanks to anti-discrimination laws) to offer the lax standard loans only to the targeted borrowers. In short, if a bank wanted to raise the number of CRA loans, it had to lower standards across the board. The broader subprime market was basically a creation of the CRA.
The way the CRA was enforced guaranteed that the bad lending practices would spread like wildfire across the country. Banks that were found to be in compliance with the CRA were granted permission to acquire other banks. Banks that were not in compliance could not make acquisitions, which often meant they couldn't grow at all. The only known method of compliance was lax lending standards. This means that banks that lowered their lending standards grew through acquisitions, while banks that kept their standards high got acquired or stayed small. This process went on for years, creating a kind of perverted financial Darwinism. It was survival of the lax-ist.
When market processes began to counter-act this regulatory Darwinism, the politicians stepped in to keep it going. Once the proper political pressure was brought to bear, Fannie lowered its own standards and we got securitized subprime. Now banks could meet their CRA obligations while passing off much of the risk to others.
Sonia Sotomayor's policy was eventually adopted on a national level to disastrous effect. I'm sure she never intended that home ownership for low income people be built upon terrible lending, this was the unintended consequence of the policy. Clearly, the program to extend home ownership to the poor was not something created by predatory lenders alone. They operated in cooperation with do-gooders who believed traditional lending standards were unwarranted and operating to prevent deserving people from buying homes.
The boom-bust in housing can't be blamed entirely on the CRA, and it doesn't absolve the corrupt lenders, the bubble-headed securitizers, the blundering ratings agencies or the careless MBS investors. But it DOES show that the government, through the CRA, had a strong hand in creating the kind of mortgage products we now regard as the source of the problem. Back then, they were regarded as part of the solution.
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Scubadiva: With all due respect, but that is just nonsense. The mortgage "crisis" has handsomely little to do with that. The construction companies got billions in bogus loans that they couldn't pay back because their projects were was based on future value rather than present or market value; the investment companies that securitied the loans should never have made the loans on such terms and everything trickled down.
Bush's administration is responsible because his administration gave the financial industry free reign to do what they want. He said to the idiot population: "oh, no problem, they'll do the honorable thing"... wrong! They did the capitalist thing and made themselves rich. I think Bush knew what he was doing (which makes him a very bad man) or he didn't know (which makes him an idiot because he should have learnt it during his 2 year stint at Harvard business school).
Bush's administration is responsible because his administration gave the financial industry free reign to do what they want. He said to the idiot population: "oh, no problem, they'll do the honorable thing"... wrong! They did the capitalist thing and made themselves rich. I think Bush knew what he was doing (which makes him a very bad man) or he didn't know (which makes him an idiot because he should have learnt it during his 2 year stint at Harvard business school).
thats silly stupid and wrongO filed the first class action suit that ushered in this BS lending.
Carter deregulated the banks, not Bush, that a you say "gave the financial industry free reign to do what they want"!
do some research for god's sake
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WhatUwish4:
The facts are that states with Democratic governors have an unemployment rate a full point higher than GOP-led states, and while Republican governors are cutting taxes and seeing their states’ credit ratings UPGRADED, Democratic governors have seen the opposite occur in their states....It’s no surprise that 7 of the 10 states with the lowest unemployment rate have GOP governors and 12 of the 15 best states for business are led by Republican governors.
Forget the party rhetoric...just look at the facts and figures.
The facts are that states with Democratic governors have an unemployment rate a full point higher than GOP-led states, and while Republican governors are cutting taxes and seeing their states’ credit ratings UPGRADED, Democratic governors have seen the opposite occur in their states....It’s no surprise that 7 of the 10 states with the lowest unemployment rate have GOP governors and 12 of the 15 best states for business are led by Republican governors.
Forget the party rhetoric...just look at the facts and figures.
The facts are that both parties represent exactly the same power structure and exactly the same agenda.
Examples:
Bush began setting up the framework for an executive dictatorship.
Obama not only continued the trend, he is already acting as if such a dictatorship exists.
Bush started all the wars (that channel so much tax money to his cronies in the war industry).
Obama keeps it all rolling (in total disrespect of his own promises).
The rhetoric is somewhat different. Bush claimed the wars were about punishing enemies and extending US influence. Obama claims they are about establishing peace. But other than the rhetoric the policy is exactly the same.
Bush claimed that the needed enhanced powers (police powers etc) in order to protect the nation from outside attack. Obama justifies overstepping his authority by claiming it's necessary to cut through partisan bickering and bureaucratic red tape for the sake of the economy or people's need or whatever. But the result is the same. The presidency becomes more and more powerful and the rest of government becomes just a rubber stamp.
THERE IS NO REAL DIFFERENCE.
The CFR chooses the candidates for both parties and funds them into getting the nomination. And they are perfectly able to rig the election if need be.
Although, since they own both candidates, it really doesn't usually matter too much to them which one gets the office. The biggest problem being lost time as a new government gets formed and organized. So they generally try to keep their puppets in place for eight years before switching parties. And as the change approaches they load as much blame as possible onto the incumbent. That way the new puppet starts office with more support.
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RayfromUSA: The facts are that both parties represent exactly the same power structure and exactly the same agenda.
Examples:
Bush began setting up the framework for an executive dictatorship.
Obama not only continued the trend, he is already acting as if such a dictatorship exists.
Bush started all the wars (that channel so much tax money to his cronies in the war industry).
Obama keeps it all rolling (in total disrespect of his own promises).
The rhetoric is somewhat different. Bush claimed the wars were about punishing enemies and extending US influence. Obama claims they are about establishing peace. But other than the rhetoric the policy is exactly the same.
Bush claimed that the needed enhanced powers (police powers etc) in order to protect the nation from outside attack. Obama justifies overstepping his authority by claiming it's necessary to cut through partisan bickering and bureaucratic red tape for the sake of the economy or people's need or whatever. But the result is the same. The presidency becomes more and more powerful and the rest of government becomes just a rubber stamp.
THERE IS NO REAL DIFFERENCE.
The CFR chooses the candidates for both parties and funds them into getting the nomination. And they are perfectly able to rig the election if need be.
Although, since they own both candidates, it really doesn't usually matter too much to them which one gets the office. The biggest problem being lost time as a new government gets formed and organized. So they generally try to keep their puppets in place for eight years before switching parties. And as the change approaches they load as much blame as possible onto the incumbent. That way the new puppet starts office with more support.
Examples:
Bush began setting up the framework for an executive dictatorship.
Obama not only continued the trend, he is already acting as if such a dictatorship exists.
Bush started all the wars (that channel so much tax money to his cronies in the war industry).
Obama keeps it all rolling (in total disrespect of his own promises).
The rhetoric is somewhat different. Bush claimed the wars were about punishing enemies and extending US influence. Obama claims they are about establishing peace. But other than the rhetoric the policy is exactly the same.
Bush claimed that the needed enhanced powers (police powers etc) in order to protect the nation from outside attack. Obama justifies overstepping his authority by claiming it's necessary to cut through partisan bickering and bureaucratic red tape for the sake of the economy or people's need or whatever. But the result is the same. The presidency becomes more and more powerful and the rest of government becomes just a rubber stamp.
THERE IS NO REAL DIFFERENCE.
The CFR chooses the candidates for both parties and funds them into getting the nomination. And they are perfectly able to rig the election if need be.
Although, since they own both candidates, it really doesn't usually matter too much to them which one gets the office. The biggest problem being lost time as a new government gets formed and organized. So they generally try to keep their puppets in place for eight years before switching parties. And as the change approaches they load as much blame as possible onto the incumbent. That way the new puppet starts office with more support.
I keep hearing people say that over and over - and to a degree I think there is truth in that. But then I look at the two platforms running in this election and they have never been such polar opposites. Plus, I've known a few politicians and they are NOT all cut from the same cloth. Some care very deeply and are passionate about our country.
Let's just say I am not willing to just throw up my hands and give up on this country.
Yet.
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WhatUwish4:
I keep hearing people say that over and over (that both parties represent the same agenda) - and to a degree I think there is truth in that. But then I look at the two platforms running in this election and they have never been such polar opposites.
Plus, I've known a few politicians and they are NOT all cut from the same cloth. Some care very deeply and are passionate about our country.
Let's just say I am not willing to just throw up my hands and give up on this country. Yet.
I keep hearing people say that over and over (that both parties represent the same agenda) - and to a degree I think there is truth in that. But then I look at the two platforms running in this election and they have never been such polar opposites.
Plus, I've known a few politicians and they are NOT all cut from the same cloth. Some care very deeply and are passionate about our country.
Let's just say I am not willing to just throw up my hands and give up on this country. Yet.
First on the issue of the parties being "polar opposites".
Part of that stems from a sort of deliberate disorientation as to where the poles are.
We have been conditioned to consider reactionary fascism to be on the extreme right and radical socialism to be on the extreme left of the political spectrum.
However, fascism is actually a form of socialism, and the more extreme the two poles become, the more they resemble each other. A totalitarian regime is the same whether it calls itself radical or reactionary. Once again only the rhetoric changes.
The real poles of the political spectrum are not what we have been taught to consider as right and left.
Instead the real poles deal with the question of individual rights versus collective control.
The extremes are total individual liberty (anarchy) on the right, and total collective control (totalitarianism) on the left.
The ideal balance between the two will of course be somewhere in the middle...enough collectivism to assure protection and organization but not so much that the individual is crushed under the weight of the collective.
In US politics today, both parties are near the totalitarian pole.
Neither champions individual rights. Instead they bicker about what is the best way for the government to steamroll over the individuals under their control.
Nobody is championing smaller government, more personal rights, less international intervention, decentralization of power etc etc etc etc.
Instead we are given the choice of bombing and invading countries in the name of world peace or in the name of US might. And we are told that the entirely semantic difference between the two choices somehow represents the two poles of political thought.
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RayfromUSA: First on the issue of the parties being "polar opposites".
Part of that stems from a sort of deliberate disorientation as to where the poles are.
We have been conditioned to consider reactionary fascism to be on the extreme right and radical socialism to be on the extreme left of the political spectrum.
However, fascism is actually a form of socialism, and the more extreme the two poles become, the more they resemble each other. A totalitarian regime is the same whether it calls itself radical or reactionary. Once again only the rhetoric changes.
The real poles of the political spectrum are not what we have been taught to consider as right and left.
Instead the real poles deal with the question of individual rights versus collective control.
The extremes are total individual liberty (anarchy) on the right, and total collective control (totalitarianism) on the left.
The ideal balance between the two will of course be somewhere in the middle...enough collectivism to assure protection and organization but not so much that the individual is crushed under the weight of the collective.
In US politics today, both parties are near the totalitarian pole.
Neither champions individual rights. Instead they bicker about what is the best way for the government to steamroll over the individuals under their control.
Nobody is championing smaller government, more personal rights, less international intervention, decentralization of power etc etc etc etc.
Instead we are given the choice of bombing and invading countries in the name of world peace or in the name of US might. And we are told that the entirely semantic difference between the two choices somehow represents the two poles of political thought.
Part of that stems from a sort of deliberate disorientation as to where the poles are.
We have been conditioned to consider reactionary fascism to be on the extreme right and radical socialism to be on the extreme left of the political spectrum.
However, fascism is actually a form of socialism, and the more extreme the two poles become, the more they resemble each other. A totalitarian regime is the same whether it calls itself radical or reactionary. Once again only the rhetoric changes.
The real poles of the political spectrum are not what we have been taught to consider as right and left.
Instead the real poles deal with the question of individual rights versus collective control.
The extremes are total individual liberty (anarchy) on the right, and total collective control (totalitarianism) on the left.
The ideal balance between the two will of course be somewhere in the middle...enough collectivism to assure protection and organization but not so much that the individual is crushed under the weight of the collective.
In US politics today, both parties are near the totalitarian pole.
Neither champions individual rights. Instead they bicker about what is the best way for the government to steamroll over the individuals under their control.
Nobody is championing smaller government, more personal rights, less international intervention, decentralization of power etc etc etc etc.
Instead we are given the choice of bombing and invading countries in the name of world peace or in the name of US might. And we are told that the entirely semantic difference between the two choices somehow represents the two poles of political thought.
I think Romney is championing smaller government and individual rights. That's what the whole job creation thing is about. People who work have money, people with money have choices. What they do with their choices is up to them. They can rise or fall on their own merits. But as Condi Rice said the other night, we HAVE to improve our education so that people have the skills to make the right choices. No more liberal "dumbing down the masses."
It is true, however, that our federal government has grown so big it has it's tenticles in virtually every facet of our lives now. But when I compare the two parties, there is only one who wants to do anything about it. Voting for Obama would just push us over the edge in that regard.
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WhatUwish4: I think Romney is championing smaller government and individual rights.
Do you really ????????
Can you explain why you believe that????
Mitt Romney has publicly been a longtime member of the CFR (although his name has recently disappeared from CFR websites and he has denied being a member when asked at a press conference).
The CFR certainly doesn't allow its members to "champion smaller government or individual rights". On the contrary, the CFR is a globalist organization and champions collectivism and global government.
Romney supports:
- Guantanamo Bay torture center,
- indefinite detention and denial of human rights to prisoners
(including American citizens) without trial,
- interventionist foreign policy,
- collective world governance
- etc etc etc
And on these points his policy is identical to both Bush and Obama.
Romney is no more a champion of individual rights than was Bush or Obama.
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With all due respect, but that is just nonsense. The mortgage "crisis" has handsomely little to do with that. The construction companies got billions in bogus loans that they couldn't pay back because their projects were was based on future value rather than present or market value; the investment companies that securitied the loans should never have made the loans on such terms and everything trickled down.
Bush's administration is responsible because his administration gave the financial industry free reign to do what they want. He said to the idiot population: "oh, no problem, they'll do the honorable thing"... wrong! They did the capitalist thing and made themselves rich. I think Bush knew what he was doing (which makes him a very bad man) or he didn't know (which makes him an idiot because he should have learnt it during his 2 year stint at Harvard business school).