Economy


Yesterday I pointed to a few articles by John Carney (certainly no conservative) on how the “Community Reinvestment Act” was a significant contributor to the current financial situation. Today there are several followup posts with even more information. Take a look at:

“How The Government Used The CRA To Push Crappy Lending Standards”

“Government Pamphlet Taught Banks How To Finance A $70,000 Home With A $500 Downpayment”

“Three Ways The CRA Pushed Countrywide To Lower Lending Standards”

Another prevalent theme among conservatives, and related to the CRA issue, has been the extent to which Chris Dodd and Barney Frank were responsible for the crisis. The amazing thing to me is that they still have their jobs – another thing we can chalk up to how uninformed the American public is about what’s really going on. Clusterstock has this gem about Barney Frank.

“Barney Frank Says Fannie And Freddie’s Lending Standards Are Too High (FNM, FRE)”

It’s astonishing how many intelligent people can ignore historical facts when they conflict with their politics. From the beginning of this economic and financial system crisis conservatives have pointed to the CRA (Community Reinvestment Act) as one of the causes. There have been no end to the denials that such a program could be saddled with such blame. But take a look at this recent blog entry on Clusterstock (a site I have a mixed impression of). Even if you normally don’t read comments on blogs, take a look there on that post, as the main writers on Clusterstock take on the commenters – which they almost never do to the depth they did there.

Apparently they received so much attention they thought it required another follow up post. Which you can find here: Why I Changed My Mind On The Community Reinvestment Act. The following statement from the article is as bold a statement as I’ve ever read on the issue, and Carney is not exactly a Conservative:

The broader subprime market was basically a creation of the CRA.

In 2005 I wrote that GM should go bankrupt. Well, it certainly took long enough. Back then I commented how the corporate welfare minded Republicans would bail them out. Now that the Democrats have finished the job and taken control of the company, take a look at what we have to look forward to:

Thanks for the reference Andrew

If you’re following the “financial crisis” closely you’ll realize a new evil scapegoat has arisen. People who “short” securities. The government just banned the shorting of 800 stocks (and climbing); a move that was probably the main reason for the surge in the stock market yesterday (Friday, September 19th). In other words, it was completely artificial and created by the actions of our government. Given that I’ve needed to explain what “shorting” was to several people this week, I’m sure that the fact that they don’t even know what it is wont prevent them from following the herd and pointing the finger.

So apparently speculators in oil were last weeks problem for driving the price up. Now those who “short” securities are this weeks problem for driving the price down. What about me? I was SHORT OIL for a while (driving the price of oil down – I guess). Do two evils make a good?

There couldn’t be a wider disagreement on the root cause of the riots in France with what I posted in my “Multiculturalism’s results” rant than what The International Herald Tribune published in their article “Britan’s multicultural experiment goes on.” While I basically blamed multiculturalism for the problem, the Herald article holds it up as France’s solution.

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