Did the Community Reinvestment Act ruin Belgium too?
Conservatives continue to try to blame the housing collapse and Wall Street’s subsequent crisis on governmental regulations such as the Community Reinvestment Act. But as I’ve pointed out in the past, there are a lot of flaws in that argument, among them this:
Source: McKinsey & Co., h/t to Barry Ritholtz at Big Picture
How did the CRA affect lending policies in Belgium or Ireland? How did that devious Barney Frank somehow finagle Fannie Mae into also destroying the housing market in Spain and the UK?
Or was this global phenomenon driven by something global in nature, such as international banking and financial institutions that went on a wild lending spree in search ever higher profits and fees, until it all became unsustainable?
You tell me.
– Jay Bookman
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404 comments Add your comment
Granny Godzilla
November 16th, 2011
8:00 am
JKL2
No Tea Partier with hand out….Mega Piffles!
“Keep your hands off my social security”
“Keep your hands off my medicare”
Yep that OWS base…policemen and firemen and pilots and nurses and teachers and now all those millionaires who want to speak to the super
committee…..
Mr. Silly pants!
stands for decibels
November 16th, 2011
8:03 am
I have yet to see a Tea Partier with their hand out.
That’s because you’re not bothering to look.
back upstairs.
Adam
November 16th, 2011
9:03 am
moonbat betty: What’s really ironic (not literally) is that the division started with Reagan and then perpetuated by Newt Gingrich. This crap has been years in the making. McConnell continued by insisting on DAY ONE that the top priority is to use the entire term of Obama as a way to make that his only term. The division is being perpetuated by the right, not the left. The right has no interest in working with the left unless they completely agree 100% to all their ideas and make sure that credit is given ONLY to the right, for any idea that was initially a right wing idea will be branded as socialist and evil if the left takes it as their own position without giving “proper credit.”
And F. Sinkwich: Obama is not the reason our economy has a problem. I’m sorry you don’t understand even basic recent history. Obama was not in office when this all started going downhill, and the cogs that set it in motion started LOOOONG before that, nearly all cogs being added by Republican members of Congress and Republican Presidents. The only thing that made it take 30 years instead of 10 was light opposition from a disorganized party – the Democrats.
So no, Obama didn’t cause this mess. Even Romney admits that. Too bad he, and you, and anyone who thinks Obama “made it worse,” can’t get past this stupid idea that Obama MUST be to blame, somehow, someway.
Emily Morgan
November 18th, 2011
2:29 am
The hundreds of acres of housing in the suburbs of LV, PHX, LA, etc were not subject to CRA, the blocks of condos in Miami, LV, San Diego, etc were no subject to CRA. And this massively overbuilt and over priced housing boom did not benefit at all from CRA. CRA applied to banks, yet banks weren’t the driving force in toxic mortgage cash advance loans origination, though they got stuck with them because they were involved in the securitization. Before 1999 they couldn’t have even done this, so the real driving force for this was the removal of the Glass-Steagall Act restrictions on banks. So if you want to blame some legislation for the financial meltdown, how about blaming the 1999 removal of Glass-Steagall instead of legislation which was designed to prevent banks ‘redlining’. By fixating on CRA, you are helping freeze out the discussion on the real causes and undermine the building of a consensus to prevent it happening again. How about working towards the repeal the 1999 repeal of Glass-Steagal? Now that’d be a useful way to spend you time and effort.