| So. We're facing a banking crisis. Yesterday, the Dow dropped 700+ points; today, so far, it's up 228. Home prices are plummeting.
And the right is busy trying to affix the blame on the poor.
That is, they're laying blame on the Community Reinvestment Act (CRA) for pushing "Fannie and Freddie to aggressively lend to minority communities." The idea is that the CRA forced lenders to give money to shiftless, lazy dark-skinned people who obviously couldn't pay back the loans, and brought this mess down on all of our heads.
Robert Gordon examined these claims back in April. Gordon noticed that the timing is off -- CRA was enacted in 1977 and its greatest activity occured in the 1990s, not during the recent subprime lending spree -- that a full half of subprime lenders weren't working under the CRA, and that CRA lenders were actually more responsible during this mess, offering safer loans than those that weren't subject to CRA.
Get it? It was lenders outside the regulatory environment of CRA that were the worst and most irresponsible subprime lenders.
Gordon:
It's telling that, amid all the recent recriminations, even lenders have not fingered CRA. That's because CRA didn't bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA -- or any federal regulator. Law didn't make them lend. The profit motive did.
The fuss against the CRA is really more pro-corporate rhetoric justifying deregulation in the wake of the current banking crisis. Unfortunately it's cloaked in the racist language and assumptions of the populist right. And leads to people like this:
Worried that welfare costs are rising as the number of taxpayers declines, state Rep. John LaBruzzo, R-Metairie, said Tuesday he is studying a plan to pay poor women $1,000 to have their Fallopian tubes tied.
"We're on a train headed to the future and there's a bridge out, " LaBruzzo said of what he suspects are dangerous demographic trends. "And nobody wants to talk about it."
LaBruzzo said he worries that people receiving government aid such as food stamps and publicly subsidized housing are reproducing at a faster rate than more affluent, better-educated people who presumably pay more tax revenue to the government.
And it's the left that's waging class warfare? |
