Wednesday, October 08, 2008

The Economy's Gone to Hell--Let's Blame the Poor People!

I read a really good column from Clarence Page in the Trib today about the current economic meltdown.

Everybody knows, or seems to know, that it was caused by the housing crisis. But instead of focusing on what's needed to fix it, they've decided to focus on desperately pointing fingers, as if that would help solve our problems.

It seems that attention has now become focused on the Community Reinvestment Act of 1977, which required lenders to reinvest in their own communities by making loans available to its citizens. Before this law, Page says, many communities were "redlined," or denied credit altogether, based on the supposition that residents were mainly minorities and therefore, "bad" credit risks.

Truth be told, nobody has really mentioned this law until now. It wasn't the CRA that prompted banks to plaster billboards and mass transit ads everywhere urging--no, commanding--us to "buy instead of rent." But since the shit's hit the fan, everybody's a historian and wants to drop the blame as far back as they can, just as long as it doesn't end up at their door. And so, the CRA has come into the crosshairs, and low-income people are once again to be blamed for our problems. As Page said:

"Ann Coulter blamed 'affirmative action lending policies' that loaded banks up with mortgages that eventually defaulted and brought the financial system to its knees.

"George Will on ABC's 'This Week' blamed 'regulation, in effect, with legislation, which would criminalize as racism and discrimination if you didn't lend to unproductive borrowers,' because 'the market would not have put people into homes they could not afford.'"

OK, first of all, why should Ann Coulter have a problem with people being on their knees? She's spent most of her career kneeling in front of Sean Hannity. And George Will's a misanthropic, thousand-year-old dinosaur who can't find his way to the nearest tar pit. Do we really expect an old foghorn like that to blow a new tune?

But as Page points out, while the Clinton administration began pressuring lenders to relax their credit standards in 1999, it was never in response to CRA. That was Fannie Mae (not the candy, as I discovered later on) and Freddie Mac who were only too eager to herd low-income families in and out like an automatic car wash, without regard to whether they could reasonably be expected to repay their loans. Aren't banks supposed to know that shit?

And studies showed that most CRA borrowers were responsibly paying their loans on time.

But it's more convenient for conservatives to find a long-forgotten, esoteric point of law to blame our current crisis on than it is to place the blame squarely where it belongs: the viral greed of the lending industry and its collective eagerness to collect super-inflated interest. That's been going on for decades, ever since these huge lending corporations were formed.

It was a disaster waiting to happen, a bubble waiting to burst, a smoker on the Hindenburg. But it didn't start with the poor folks.

They had enough to worry about already. And now they have more.


Blogger American Girl said...

Check out Bill Moyers Journal of 10/3/08. The second segment is about this. Seems it's "minorities" (Palin wink-wink, nudge-nudge)that are the cause of this mess. Not lax underwriting guidelines that became the norm during the Bush administration. You get it, "minorities." People like, oh, you know, that one (McCain fingerpoint).

The republicans aren't playing the history card, they're playing the race card.

Thanks for this post! You got me all pissy again. I've been in such a mental hole today.

1:42 PM  
Blogger Aaron said...

Ain't it something??

The good news is that major news outlets are calling them on the carpet over their race-baiting attempts. Granted, Joe Six-pack and his cousin, Elmer Monstertruck will still vote for McSame and Sarah Pinup. But the would have anyway...the undecideds, though, are going to get turned off. In the polls today, over 80 percent of MSNBC viewers declared Obama the winner. And now his lead has widened to 10 percent.

This feels SO much better than 2004. I know it's not over, but it's nice to have reasonable confidence, and not the "loser" buzz I had with Mondale, Dukakis, Gore and Kerry. (Damn that's a lotta losin'!)

4:20 PM  
Anonymous Anonymous said...

Latest developments from the despaerate GOP:

Strike 1. Obama accepted money from an overseas country. (Let's insinuate that it's Iran)

Strike 2. Obama has friends who want to terrorize this country. (well they did want to back in 1965)

Strike 3. How can Obama not be a muslim? His middle name is...wait for it, wait for it...It's a shocker....Hussein!

The GOP hopes to Hell this works 'cause it's all they got. ed

5:50 PM  
Blogger Aaron said...

And it ain't working very well...

On the bright side for them, the NRA is endorsing McCain, but probably only because Sarah Pinup likes guns and shoots things from a helicopter that can't shoot back.

10:21 AM  
Anonymous Anonymous said...

Today on The View: The blond Bimbo said Obama is guilty of Terrorism by associating with a known terrorist. Forget that this so called terrorist is now a University Professor or that the only association was that they were both on the same board. Ot that the board was the Annenberg Foundation which is a highly esteemed and benevolent sponser of PBS. Whoopi chimed in that in that case if it is guilt by association then Sarah McPain is unamerican since her husband joined a group in 1967 that called for the over throw of the U.S. Government in Alaska and making or 49th state an oil cartel like Saudi Arabia. Talk about Un-American. ed

6:30 PM  
Blogger Aaron said...

Yes, and Obama was 7 years old when Bill Ayers and Bernardine Dohrn were engaged in their Weather Underground activities. McCain was MUCH closer to the Keating bunch.

McSame and Pinup have been flogging this for all it's worth.

Which ain't much, according to the polls.

12:49 AM  

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