rssOle Stand-By: GOP Still Blaming CRA for Financial Crisis
Friday, July 10, 2009 at 5:37 pm
- 2 Comments
Worth noting from yesterday’s House Judicial subcommittee hearing on the foreclosure crisis: Republicans just can’t shake the temptation to blame the Community Reinvestment Act for causing the current economic turmoil.
You’ve heard the critics’ argument before: The CRA hasn’t so much empowered low-income borrowers as it has lowered lending standards, thus forcing banks to make the bad loans that led to the crisis.
Rep. Trent Franks (R-Ariz.), the subpanel’s senior Republican, summed up the sentiment nicely Thursday when he claimed the downturn was caused not by predatory lenders preying on people, but by a predatory government preying on banks for political ends.
Never mind that no less an authority than the Federal Reserve’s director of consumer and community affairs said the CRA was “not one of the causes of the current crisis.” Instead, the Fed found that CRA-covered banks were responsible for just 6 percent of the risky, high-cost loans that sparked the financial wildfire.
Franks’ comments weren’t overlooked by Rep. William Delahunt (D-Mass.), who used most of his Q&A time debunking the myth, picking from witnesses statistics like those reported by the Fed. Not that he imagined the Republicans were listening.
“When you’re looking for whipping boys,” Delahunt said, “the CRA is just a prime target.”
2 Comments
Comment posted July 11, 2009 @ 3:37 pm
Ya the rep like to forget things like this
http://www.youtube.com/watch?v=GkAtUq0OJ68
http://www.rollcall.com/issues/54_50/news/29488…
Comment posted July 12, 2009 @ 12:18 pm
It took 204 years for these United States of America to build up a $1 trillion debt (and that includes two World Wars!). In just 12 years of Reagan-Bush-o-nomics, it QUADRUPLED! That means, when Bush Senior left office, the Debt was $4 TRILLION! Clinton struggled to get that massive Debt under control and finally built up three years of SURPLUSSES! (which Bush, Cheney & Tom Delay quickly squandered on tax cuts for their rich friends). When Bush Junior left office, the DEBT was around $11 TRILLION! That means George W Bush heaped $5 TRILLION more onto the DEBT.
So, of the $11 TRILLION in DEBT since the founding of the nation, $8 TRILLION came to us courtesy of the Reagan-Bush-Bush administrations.
Isn’t it curious that the Neo-Cons and their acolytes of “Heritage Foundation” and “AEI” said nothing of value – absolutely nothing – when this mind boggling DEBT was being accumulated, but hyperventilate on cable TV now that we’re forced to spend a couple trillion more to clean up the mess they all made of the economy and get the economy up and running again? One might be tempted to call their media show “The Hysterical Heritage of Hyperventilating Hypocrisy!”, or one might try to help them understand where they went wrong.
Let’s simplify this for them so even a 12 year old boy can grasp it. Say your 12 year old son pilfers the keys to the family car in Florida and goes on a joy ride with his friends through the countryside. He stomps on the debt accelerator, takes his hands off the regulatory wheel, and laughs to his friends Tom, Dick and Eric that this magnificent car is so good it doesn’t need regulation.
And he’s right – for eight long minutes.
When the car ends up in a huge “U” shaped ditch, the boy’s taxpaying parents call on Obama’s Garage to pull the car out and fix it. But the boy and his friends complain that the mechanics aren’t working fast enough, and it’s too expensive, and they should fix the paint job before straightening the frame so it won’t look so bad. “Never mind fixing the regulatory wheel,” they say, “It don’t need none!”
If you were one of their voting parents, and you had a wood shed, how would you help these boys understand what they’ve done?
Can history help guide us through a financial crisis that’s been 25 years in the making? Only if we learn from it.
Gary AndrewS, author of “No Gods Before Me”
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