George Will applies the lash:
The louder they talked about the disadvantaged, the more money they made. And the more the financial system tottered.Who were they? Most explanations of the financial calamity have been indecipherable to people not fluent in the language of “credit default swaps” and “collateralized debt obligations.” The calamity has lacked human faces. No more.
Put on asbestos mittens and pick up “Reckless Endangerment,” the scalding new book by Gretchen Morgenson, a New York Times columnist, and Joshua Rosner, a housing finance expert. They will introduce you to James A. Johnson, an emblem of the administrative state that liberals admire.
The book’s subtitle could be: “Cry ‘Compassion’ and Let Slip the Dogs of Cupidity.” Or: “How James Johnson and Others (Mostly Democrats) Made the Great Recession.” The book is another cautionary tale about government’s terrifying self-confidence. It is, the authors say, “a story of what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.”..
Read on.
The program was run during several Presidencies from Ford to Obama,with ,Carter,Reagan, Bush Sr., Clinton, Bush Jr,also in the top office.
Did NONE of them have advisers that could see the looming crisis in lending money to unqualified people?
The whole situation is astounding, all the "experts" and administrators involved over thirty bloody years,and no one saw fit to halt the stupid program!
I believe that many economists and politicians have misread a vital economic statistic, home ownership. They falsely believe that high rates of home ownership CAUSE a more stable and affluent society. Rather, high rates of home ownership are a SIGN of a more stable and affluent society. By trying to bypass creating the environment that will allow an affluent and stable economy to flourish, they have actually damaged the economy. They are Fools.
Sorry, Carter was President when it was enacted in 1977, not G.R. Ford.
The Community Reinvestment Act (CRA, Pub.L. 95-128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
1977 Congress(95th Congress)
The apportionment of seats in this House of Representatives was based on the Nineteenth Census of the United States in 1970. Both chambers had a Democratic majority. It was the last time either party held a filibuster-proof (60 member) majority in the Senate, until the 111th United States Congress in 2009 (in which both chambers once again held a Democratic majority).
Anyone who thinks that the housing crisis is
exxclusively due to malefactors of
vast wealth needs to read Aaron Clarey's
"Behind the Housing Crash: Confessions from an Insider" of 2008.
"Sorry, Carter was President when it was enacted in 1977, not G.R. Ford."
the real roots actually date back to just after the great depression, when Fanny Mae was created by the dems
I'v said all along that it was mosts lefties that drove the debical that morphed into the housing dissaster, and as there are a disproportionate # of "joos" at or near the top of financial instutuions we can see who to blaim. These joos also (78%) supported Ozero, and made great financial contributions to his election champagn.
dmorris...they are still lending millions to unqualfied peeps.....they are called credit cards
Now that the NYC investment oligarchy have exported most of our productive industrial jobs/business off shore with their austere globalising WTO deals,(taking the lucrative NYSE industrials market with it),what substitute was left for Wall Street to grow the economy?
With this good "honest dollar" industrial and resource investment gone, Wall Street sold chips in a series of phony prospecting games like Enron-like value inflating start-ups ,debt gambling games (derivatives) and supply-manipulating commodity wind falls. Investment bunko and debt trading fraud abound in the investment game as printing presses at the US mint run 24/7 to cover private oligarch bank losses.
But the real crime of the century was repealing the Glass–Steagall_Act allowing non and pop banks into Wall Street's debt instrument gambling rackets In 2008 the Wall Street Oligarchs bought themselves a president who would underwrite the Wall Street gaming houses debt losses with tax revenues.
The end result of these vast economic crimes is that, essentially, America no longer represents a free capitalist system. It is an exclusive private oligopoly which underwrites toxic loss with money extorted from the public treasury under the "to big to fail" fraud.
Buy gold.
The end is nigh.
Starting Tuesday morning when the US markets open with an expired QE2.
How do I know this?
Lots of unsolicited market newsletters in my email inbox say so.
Head for the hills.
/panicmode
More on James A. Johnson
http://en.wikipedia.org/wiki/James_A._Johnson_(businessman)
Occam,
You hit the nail on the head!
There are a lot of people and policies to blame for the recession. The CRA was just one piece of the pie, how big was it? Depends on who you ask. I do know more than a few Americans that walked away from their house simply because they were upside down(and probably temporary at that). They could easily afford the house.
Get your gold here.
I've just started reading "Reckless Endangerment"....interesting so far.
James A. Johnson sounds like a really nice, honest guy.
When I go to the bank to borrow money they don't ask what the land will be worth in ten years. They ask how I will pay for it. That's all that matters. You want money? How will you pay it back?
Actually,
believe it or not, Bush wanted something akin to inquiry into the lending activities, practices and apparent shady dealing of the two, Fanny May and Freddy Mack, corporations sucking on the public teat.
A guy, sort of, by the name of Barney Frank chairman of the comitee uder whose power, the two corporations operated. He, Bawney Fwank, refused to investigate, saying, everything was fine. You may remember, he got a job for his boyfrend at the same corporation.
Not that things would be much different, though a head start on the scam would have been helpful.
Yawn. I've been saying this, here and elsewhere, since 2008. Three years later, some NY Times reporter catches on? Wow.. is she ever bright! They should change their motto to "All the olds that fits our print".
Did anyone actually think that something protected, nurtured with vigorous defense by such as Barney Frank?
Could or would be of any benifit to anyone but himself plus his buddies.
Barney isn't known for being honest, or full of the milk of human kindness.
From that alone we should know it was a scam.
Would that be this Barney Frank? http://bostonherald.com/news/politics/view.bg?articleid=1340643&position=1 This is one of the great Youtube videos about Freddy and Fanny:
http://www.youtube.com/watch?v=hxMInSfanqg What a great advantage it is for Democrats to know that all their scandals will be minimized or hidden by the press. Most reporters and editors are lefty activists at heart and could care less about printing the truth.
I know, dmorris, I know. But remember. These were the days when fools believed that real estate would never lose its value. And if the value of real estate always goes up, there's never an asset bubble.
Fact is of course, real estate loses value all the time. What's the value of a house in Minot, North Dakota these days?
Occam: "Buy gold."
What a non sequitur. Did Canada's real estate market go in the tank? Have our banks compromised themselves with a slew of bad mortgages? Do we have insane tax provisions and regulations encouraging over-borrowing like mortgage interest write-offs and walk away free provisions?
Grow up. Gold is just as prone to sudden collapses in value as everything else. The price of gold will collapse whenever the big institutional holders, principally oil sheiks and hedge funds, cash in their holdings. That happens when the oil sheiks need cash to reduce state fiscal deficits, and the hedge funds when they cash out into interest bearing securities. And historically when gold goes down it goes down very rapidly and doesn't even touch the sides of the well.
There is no magic bullet for wealth preservation in this world except one thing, diversity. If you've got more than about 10% of your holdings in gold, you're just begging to be wiped out when the drop comes.
Lev, quite right. Johnson would never have caused this problem without a ton of leadership and co-operation out of Congress. And Bawney is one of the chief villains of the piece in recent years.
In a nutshell.
Problem: Crash of 2008.
Cause: Coercive, interventionist government policies, particularly in the housing sector.
Solution: free-market capitalism.
Sadly, uninformed columnists like David Olive in the Toronto Star continue to propagate the myth that the free market caused the problem.
"Gretchen Morgenson, a New York Times columnist, and "
whoa, whoa, whoa. you're citing an employee of a high profile MSM publication.
be careful when you do that around these parts pardner.
Heard Gretchen on a FOX show recently.
It takes time to put all this stuff together.
She did through interviews with as many people involved with the debacle (that's how you spell it, GYM) as possible.
The fact she works for the New York Times should not matter.
All it demonstrates is the tribal kneejerk (emphasis on the jerks) reaction that's starting to creep in among some of my friends who contribute to this blog.
You'll never go wrong by sticking to the facts. Forget the name-calling and the suspicions.
Great quote in Will's article: “The louder he talked of his honor, the faster we counted our spoons.”
— Emerson
How appropriate.
GW Bush ... chickened out on pursuing the financial markets issue.
He gets blame for this as well.... and deserves it.