http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=312766781716725
Stop Covering Up And Kill The CRA
INVESTOR'S BUSINESS DAILY
Posted 11/28/2008
Regulation: The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats' interests that they'll do anything to protect it — including revising history.
The CRA coerces banks into making loans based on political correctness, and little else, to people who can't afford them. Enforced like never before by the Clinton administration, the regulation destroyed credit standards across the mortgage industry, created the subprime market, and caused the housing bubble that has now burst and left us with the worst housing and banking crises since the Great Depression.
The CRA should be abolished, along with the government-sponsored enterprises that fueled the secondary market for subprimes — under pressure from Clinton, who ordered HUD to set quotas for "affirmative action" lending at Fannie Mae and Freddie Mac.
But powerful Democrats in Washington want to protect the act — along with Fannie and Freddie — and spin the subprime scandal as the result of too little regulation, not too much.
"Repealing or weakening the CRA would be a mistake," warns Senate Banking Committee Chairman Chris Dodd, D-Conn., who argues that the CRA should be strengthened.
Dodd, the top recipient of Fannie donations and himself a beneficiary of a sweetheart mortgage brokered by a subprime lender, recently invited one of Clinton's top enforcers of the CRA to testify.
"The notion that CRA has caused this problem is a pernicious thought," said former Comptroller of the Currency Gene Ludwig. "These are not truthful statements. The CRA has helped to create a better and sounder world for finance, not the opposite."
Dead wrong. But the mainstream media believe it, and have attacked those, including this paper, who dare to tell the truth about the crisis. Already the debacle has erased $13 trillion in wealth, while putting taxpayers on the hook for up to $8 trillion in bailouts.
"The latest salvo from conservatives began via a Sept. 15 editorial in Investor's Business Daily, titled 'The Real Culprits In This Meltdown,' " grumbled a column distributed by Scripps Howard News Service. "Its editorial blamed President Clinton for today's mess."
As we said, Clinton beefed up the CRA and used it to force banks to subsidize poor communities with close to $1 trillion in high-risk loans and other commitments that flouted underwriting rules.
Yet, somehow, these media-driven myths keep getting in the way of actual facts, such as:
Fact: The 1977 law was only lightly enforced until Clinton added teeth to it in 1994 and launched an anti-redlining campaign against banks, led by Ludwig, Housing Secretary Henry Cisneros (and later Andrew Cuomo) and Attorney General Janet Reno that lasted into this decade.
Minority homeownership rates, which had been flat, began a steep rise in 1995, and home prices soon followed, stoked by easier lending. Numerous bank officials complain that they still feel pressured by CRA regulators to make inner-city loans they know are at great risk of defaulting.
Myth: The CRA could not have led to financial Armageddon, because the overwhelming share of subprime mortgages came from lenders that were not banks and not regulated by the CRA.
Fact: Nearly 4 in 10 subprime loans between 2004 and 2007 were made by CRA-covered banks such as Washington Mutual and IndyMac. And that doesn't include loans made by subprime lenders owned by banks, which were in effect covered by the CRA.
Last year, when the bubble burst, bank subprime loans totaled $142 billion, dwarfing those made by lenders.
What's more, the biggest subprime lender, Countrywide, while not subject to the law, still came under federal pressure to make risky loans in minority communities.
Clinton created a separate department at HUD to police "fair lending" at Fannie and Freddie and also at lenders like Countrywide, which became Fannie's biggest client. In 1994, Countrywide became the nation's first mortgage lender to sign with HUD a "Declaration of Fair Lending Principles and Practices."
As a result, Countrywide made more loans to minorities than any other lender — and not surprisingly, was one of the first lenders swamped by loan defaults.
Other lenders felt the heat from Reno's Justice Department, which prosecuted them for failing to operate enough branches in black neighborhoods. Reno put the entire banking industry on notice about the CRA and her enforcement program.
Myth: The CRA did not force anyone to do subprime loans or take excessive risks.
Fact: Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time he left, they made up more than 9% of the market for mortgage originations. Today they're 20%.
"It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA," ex-Fed chief Alan Greenspan said in recent testimony on the roots of the crisis.
Clinton pushed banks to grant mortgages to minorities with poor credit by using "flexible" underwriting standards — or risk being branded racist. Rules were weakened to the point where welfare and unemployment checks were accepted as qualifying income.
Myth: Greedy investment bankers, who securitized and sold subprime mortgages, drove us to the credit crisis, not government.
Fact: Clinton's regulatory policies led to the creation of this new risk on Wall Street. His CRA amendments created the subprime market, and only after he pressured Fannie and Freddie to socialize the risk and guarantee the profit from the subprime loans did Wall Street get involved in a big way.
The exotic securitizations that have gotten so much of the blame were a symptom, not the cause, of the crisis.
The architects of the crisis want to divert attention from their own culpability by blaming the markets rather than their own regulations mandating that banks make high-risk loans based on race.
In fact, regulations had almost everything to do with this mess. And instead of strengthening them to atone for the alleged "sins of capitalism," we should be abolishing them.
Two bills in the House would be a good place to start. HR 7264, which has nine co-sponsors, would repeal the CRA. And HR 7094, with 17 co-sponsors, would dissolve Fannie Mae and Freddie Mac.
During the last severe slump, President Reagan deregulated the economy, saying: "Government is not the solution to the problem; government is the problem." He's as right today as he was then.
Saturday, November 29, 2008
Thursday, November 13, 2008
Race in America in 2008
well said,, I'd add the senseof entitlement also, every race/culture has some historical greivance. American blacks hang on to theirs very well.
from ace....
http://ace.mu.nu/archives/278081.php
Let me sharpen that up: There's no one left to blame. I don't know how long that mindset will take to sink in -- perhaps it never will -- but blacks have long grown accustomed to blaming not failure itself but failure to even try on presumed white racism making such efforts futile.
Well, enough of that.
The worst aspect of racism -- in terms of actual impact -- in this country is not white racism, but hyperbolically overstated black claims of white racism, which in turn create a sense of futility, anger, and ultimately powerlessness and stagnancy in the black community. The idea that learning or success is "white" is devastating to black advancement, and there's nothing whites or the government can do to change that. Blacks have to change that mindset themselves, and give up on a basically oppositional culture which seems to state that whatever whites might do is haram.
from ace....
http://ace.mu.nu/archives/278081.php
Let me sharpen that up: There's no one left to blame. I don't know how long that mindset will take to sink in -- perhaps it never will -- but blacks have long grown accustomed to blaming not failure itself but failure to even try on presumed white racism making such efforts futile.
Well, enough of that.
The worst aspect of racism -- in terms of actual impact -- in this country is not white racism, but hyperbolically overstated black claims of white racism, which in turn create a sense of futility, anger, and ultimately powerlessness and stagnancy in the black community. The idea that learning or success is "white" is devastating to black advancement, and there's nothing whites or the government can do to change that. Blacks have to change that mindset themselves, and give up on a basically oppositional culture which seems to state that whatever whites might do is haram.
Thursday, November 6, 2008
progressive fakers
http://ace.mu.nu/archives/277587.php
from ACE..
I've been trying to write this for a month, with no luck. I just dashed off a sketchy email about this, and since this is the closest I've come to getting this into words, I'll post it. Otherwise I'll never write it.
I can't help but notice a lot of the "Republicans' most enamored of Obama, and most disgusted by Palin, are upper-class twits. Either by birth or by adoption of their culture.
I'm betting wallace and schmidt are, too.
A lot of this is pure class/cultural disgust at those boisterous,declasse blue collar types.
Hey, Palin got shit done in Alaska. But blue collar morons are goodat fixin' shit, aren't they? As David Brooks noted, Obama can easilycite Neibhur in conversation. (However you spell his name.) That'sthe important thing, you know.
The lower classes DO. The upper classes ARE.
It was one thing when George W. Bush, a patrician plainly comfortable with the blue collar sector of the country, ran for office. Sure, he adopted a lot of the tastes and assumptions of the blue collar working-stiff class (and apparently he was pretty genuine about that), but we could all rest easy knowing, by blood, he was a good solid upper-upper class Connecticut aristocrat.
Sarah Palin? Not only was she born blue collar, but, unlike Scranton Joe Biden (Obama love 'im), she disgustingly has refused to evolve past the bitter, clingy station she was born to.
For God's sake, she was a Governor. She could have gained entry to the soft (as in arriviste) upper class at any time she set her mind to it.
And yet she refused.
The hell, man? It's like she just doesn't want to become better than she is.
Again: I've written on this too many times in the past to write it again.
So I'll just link this old piece. To not alienate the PUMAs still here, I'll note that "liberals" means the liberals you don't like, either.
The aristocracy has always sought to differentiate itself from the hoi polloi by signaling other aristocrats via the conspicuous display of manners and opinions marking them as elite. In the 1920's, for example, the highborn would talk about opera and symphony, but never popular music-- popular music was for the lower classes, and if you enjoyed a pop song, it was best to keep that to yourself. They would discuss live theater but never filmed features-- again, the first was accpetable, the latter declasse. And of course there is all that stuff about eating and drinking.
Gosford Park catalogued much of this, especially in the screenwriter's commentary, which, for my money, was more interesting than the actual movie.
We still have a moneyed aristocracy, of course. And I imagine that many of those old rules still apply (although, quite frankly, I wouldn't know for certain).
What I find interesting from a sociological standpoint is liberals' aping of the opinions and manners of the aristocracy, usually with a healthy infusion of kneejerk progressive politics, as a new form of differentiation from the masses whom they so clearly despise. Just as the old middle classes would also attempt to mimic the behaviors of the wealthy, so too do today's liberals -- even those who aren't very wealthy at all -- seek to emulate the codes and mores of the leisure-class to show that they, too, belong in the company of the elite.
Quick proof: Go find any liberal. Ask him what he thinks about USAToday. If he does not immediately say "McPaper," I will buy you a Filet-O-Fish or McRib (your choice; supplies are limited).
Now, USAToday is neither an especially good paper nor an especially bad one; it's not really remarkable in any way. But the word has come down from the liberal aristocrats that the proper attitude towards USAToday is that it is a McPaper, and so that's what they all say, even if (as is usually the case) they've never so much as read the paper before in their lives.
They call it McPaper because of a series of faux-aristocratic biases -- the "mom and pop" local operation is always more virtuous than the national franchise, anything that smacks of mass-appeal is to be automatically despised, etc. -- and they say it's a McPaper, over and over again, for the same reason 1920's aristocrats all talked about the operas they usually slept through-- to signal to other "Progressive Elites" that they Belong, that They Are Part of the Higher Class.
from ACE..
I've been trying to write this for a month, with no luck. I just dashed off a sketchy email about this, and since this is the closest I've come to getting this into words, I'll post it. Otherwise I'll never write it.
I can't help but notice a lot of the "Republicans' most enamored of Obama, and most disgusted by Palin, are upper-class twits. Either by birth or by adoption of their culture.
I'm betting wallace and schmidt are, too.
A lot of this is pure class/cultural disgust at those boisterous,declasse blue collar types.
Hey, Palin got shit done in Alaska. But blue collar morons are goodat fixin' shit, aren't they? As David Brooks noted, Obama can easilycite Neibhur in conversation. (However you spell his name.) That'sthe important thing, you know.
The lower classes DO. The upper classes ARE.
It was one thing when George W. Bush, a patrician plainly comfortable with the blue collar sector of the country, ran for office. Sure, he adopted a lot of the tastes and assumptions of the blue collar working-stiff class (and apparently he was pretty genuine about that), but we could all rest easy knowing, by blood, he was a good solid upper-upper class Connecticut aristocrat.
Sarah Palin? Not only was she born blue collar, but, unlike Scranton Joe Biden (Obama love 'im), she disgustingly has refused to evolve past the bitter, clingy station she was born to.
For God's sake, she was a Governor. She could have gained entry to the soft (as in arriviste) upper class at any time she set her mind to it.
And yet she refused.
The hell, man? It's like she just doesn't want to become better than she is.
Again: I've written on this too many times in the past to write it again.
So I'll just link this old piece. To not alienate the PUMAs still here, I'll note that "liberals" means the liberals you don't like, either.
The aristocracy has always sought to differentiate itself from the hoi polloi by signaling other aristocrats via the conspicuous display of manners and opinions marking them as elite. In the 1920's, for example, the highborn would talk about opera and symphony, but never popular music-- popular music was for the lower classes, and if you enjoyed a pop song, it was best to keep that to yourself. They would discuss live theater but never filmed features-- again, the first was accpetable, the latter declasse. And of course there is all that stuff about eating and drinking.
Gosford Park catalogued much of this, especially in the screenwriter's commentary, which, for my money, was more interesting than the actual movie.
We still have a moneyed aristocracy, of course. And I imagine that many of those old rules still apply (although, quite frankly, I wouldn't know for certain).
What I find interesting from a sociological standpoint is liberals' aping of the opinions and manners of the aristocracy, usually with a healthy infusion of kneejerk progressive politics, as a new form of differentiation from the masses whom they so clearly despise. Just as the old middle classes would also attempt to mimic the behaviors of the wealthy, so too do today's liberals -- even those who aren't very wealthy at all -- seek to emulate the codes and mores of the leisure-class to show that they, too, belong in the company of the elite.
Quick proof: Go find any liberal. Ask him what he thinks about USAToday. If he does not immediately say "McPaper," I will buy you a Filet-O-Fish or McRib (your choice; supplies are limited).
Now, USAToday is neither an especially good paper nor an especially bad one; it's not really remarkable in any way. But the word has come down from the liberal aristocrats that the proper attitude towards USAToday is that it is a McPaper, and so that's what they all say, even if (as is usually the case) they've never so much as read the paper before in their lives.
They call it McPaper because of a series of faux-aristocratic biases -- the "mom and pop" local operation is always more virtuous than the national franchise, anything that smacks of mass-appeal is to be automatically despised, etc. -- and they say it's a McPaper, over and over again, for the same reason 1920's aristocrats all talked about the operas they usually slept through-- to signal to other "Progressive Elites" that they Belong, that They Are Part of the Higher Class.
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