Community Reinvestment Act - revisited

Did you ever have to revisit a thing that seems like old news ? I hate to put y’all through this, but I can’t help it…

Perusing a dear follower’s blog, I found a provocative piece (here’s hoping a link will draw her some traffic!). After enunciating my response on her comment form, & hitting ‘publish’, my comment frustrated by controls that only allow input from ‘members’ – which I am not, unfortunately. Not being one to let sleeping dogs lie, I’m bringing my ‘comment’ back home, to share with whoever traipses across this path. (Lucky you, & here goes…)

Oh dear, oh dear…Friend, you must get a hold of yourself!

Breathe. Just breathe...
You say, ‘Move on & let Obama do what he has to do to get this country back in shape. Back to the shape it was in before Bush got his hands on it. You conservatives that can't stand the truth, get out of the kitchen.’

Dear friend, you then iterated the tired accusation, ‘We inherited a trillion dollar deficit and a depression from Bush and the Republicans…’

It’s true we’re in a pickle, & there’s plenty of blame to go around. But, if folks would stop yelling talking points long enough to think about where the crisis started, they may find its roots tapping back to 1977 (only a few years after you & I were born). It started with the CARTER Admin. & the Community Reinvestment Act - a warm & fuzzy social program designed to get more lower income families into home ownership. Fair enough.

But then, in 1993 the CLINTON Admin. ‘substantially revised’ the program to force mortgage lenders to give loans to even more high risk buyers (i.e., people who couldn't afford it) under threat of FEDERAL PENALTY :

“In a more aggressive pursuit of "social justice,"
the Clinton administration revised the CRA in April 1995 to mandate that banks
pass lending tests in "underserved" communities and suffer tough new sanctions
for failing to make enough loans there.
According to the language of the new
Clinton regs, banks that used "innovative or flexible lending practices" to
address the credit needs of low-income borrowers passed the test. Banks with
poor CRA ratings were hit with stiff fines and blocked from expanding their
operations. Soon, "flexible" lending became the norm, and banks used subprime
loans, which charge higher interest rates, to cover the added risk.
But it
wasn't enough. So Clinton ordered HUD to pressure Fannie Mae and Freddie Mac to
buy the higher-risk loans from private banks and lenders, while adopting the
same "flexible" credit standards.

Etc., etc., etc.

In other words, the Fed. Govt. (Clinton) forced private businesses - free markets - to make BAD decisions, or risk being pinched out of business.

• Vehicles Fannie & Freddie grew by leaps & bounds in the '90s (Clinton), until the situation was such a risk to our economy that President BUSH in 2001 issued a firm warning for Congress to clean it up. Congress did nothing.
  


• President BUSH warned again in Spring/Fall of 2003. Congress did nothing.
  


• What's more, Congressional Democrats Barney Frank, Chuck Schumer, et.al, mocked the President Bush for claiming ‘the sky was falling’, insisting that Fannie & Freddie were just fine. Legislation for increased regulation of these vehicles was blocked by these Democratic leaders.
  


• In Feb. 2005, Fed. Chairman Greenspan urged that if BUSH’s warnings were not heeded, "we are placing the total financial system of the future at a substantial risk." Congress did nothing.
  


• In April 2005, Greenspan said, "If we fail to strengthen [regulation] then we increase possibility of insolvency and crisis." DEMOCRAT Chuck Schumer countered the warning, defending the loan vehicles. Congress did nothing.
  


• May 25, 2006, JOHN McCAIN co-sponsored a bill to increase regulation of Fan & Fred. Not even one Democrat voted for the bill in committee. SENATOR OBAMA DID NOT VOTE. HE DID NOTHING. (Oh, sorry. He must have been busy, out campaigning for Hope.) The Bill died. Congress did nothing.

In a 9-26-08 article , Kurt Schulzke commented, "Yesterday's soft & cuddly gov't program is today's financial chainsaw massacre." And, "far from...free-market dysfunction, today's mortgage mess is a classic case of socialistic gov't intervention gone awry."

With access to a different ‘truth’ before you, dear blogging friend, it seems that the “loser” you call Mrs. Palin called the 'Do-nothing Congress' exactly right. They did NOTHING except stifle each other as this volcano boiled toward eruption. And as for "Ronnie Raygun's song & dance” about 'Government being the problem'… Well, he just about hit the nail on the head, now didn't he?

Here we find ourselves, through myriad twists & turns, in a real financial sling. And what’s the current Administration’s answer to the fiasco that GOVERNMENT caused? Why, more Government, of course!!

We’re sliding down the muddy, slimy, slippery slope into a pit called Socialism, where Government declares itself more entitled to direct people’s money, businesses & lives than the people themselves.

Newsflash folks: Socialism isn't what allowed America to rise to her current place in the world. A free market system (among other factors) did. Forcing Socialism on a Capitalist system will not work. Absolving people of personal responsibility (on any level - private or corporate) will not create a better society. It will create a culture of dependency & learned helplessness, leading to collective weakness, frustration, & ultimately collective failure. (Just look @ Fannie & Freddie.)

I, for one, am not game for collective failure. You may be wondering, am I hoping for the failure of The One whose agenda will lead us to just that? In the words of one who really gives me something to HOPE for , “You Betcha!”

~~~