Flash
Diamond Member
- Dec 8, 2014
- 71,172
- 62,058
Bullshit. The CRA was NOT the cause of the housing bubble. De-regulation meant that Wall Street could make far more money on sub-prime mortgages than conventional mortgages and Goldman Sachs went on a sub-prime spree, packaging the high risk loans into derivatives which they sold for further profit.
Republicans have bent over backwards to pin this on Carter and Clinton pointing out that lame duck Clinton signed the legislation de-regulating the banks, passed by a Republican Congress and Senate, and Carter signed the original CRA. But it wasn't the CRA, and it wasn't Freddie or Fanny Mae, it was Goldman Sachs, Wall Street, and the Republicans that did it.
There was no "deregulation," dumbass.
The Gramm Leach Bliley Act of 1999.
First, the GLB Act of 1999, can't be used to explain a sub-prime bubble that started in 1997.
Second, the GLB Act did nothing..... let me repeat that and make it absolutely clear.... NOTHING..... that had any effect either way on the sub-prime lending, or the vast majority of institutions involved.
If the GLB Act had not been passed.... there is not one aspect of the sub-prime crash that would have changed. Not one. Not even one.
The only connection between GLB Act, and the sub-prime mortgage crash, is one that the left, generally denies.
The Act made all mergers between banks, be required to meet CRA standards before they could be approved.
So if a Bank wanted to do a merge, they had to meet lending standards to minorities and special interest groups.
Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law.In effect, the GLB Act INCREASED regulations on banks.
But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.
The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements.
Agreement Reached on Overhaul of U.S. Financial System
Beyond this, the GLB Act had nothing to do with the crash whatsoever.
The only even attempt to claim a connection, is allowing Insurance,Retail, Commercial, and investment banks to merge.
The problem is, the vast majority of the banks that failed... didn't do that. So they would not have been affected, had the GLB Act never existed.
AIG was only an insurance company. GLB Act did not affect them either way.
Bear Stearns was an investment bank. GLB Act did not affect them either way.
Country Wide was an investment bank. GLB Act did not affect them either way.
Indymac was only Retail. GLB Act did not affect them either way.
Lehman Brothers was only an investment bank. GLB Act did not affect them either way.
Without spending the next 6 pages listing each bank failure, the vast majority were all single business corporations, that would not have been affected by GLB Act at all. Nothing would have changed.
By the way, neither Europe nor Canada, has never had the restrictions on banks, that GLB Act removed.
This argument is getting as old as if Hitler was a lefty or Righty
Both the Republicans and Democrats were responsible
And Hitler was neither, just nuts
I don't care about political parties.
I'm talking about the ideology. The claim that there was "deregulation" and if only we had more regulation, then we would have solved this.... is proven false.
Regulation never solves anything. Before this crash, we had the most highly regulated banking system in the world.
More regulated than Europe, more than the UK, more than Canada, more than anywhere.
Yet the crash originated here in the US.
Now if you want to look at what policies started the housing bubble, then you need to go back to the Clinton Administration.
That's not partisanship. That's fact. If you want to argue the facts don't matter, and do this copout game of "Well... everyone is to blame!".... Then all you are doing is begging for another crash in the future. Not because democrats blaw blaw blaw blaw..... not because of that. But because when you do this "everyone is to blame" copout, you end up not finding the policies that caused the problem.
The problem started in 1997, when the Clinton Administration, pushed banks, and sued banks, and guaranteed sub-prime loans. This legitimized the market, and the result was a massive price bubble that eventually exploded in 2007. Fact. I can point citations and references for each of those claims. (all of which have been posted on this thread, possibly twice now).
I think I clearly said in my post that the Republicans were partially to blame because they had the opportunity to undo the damage the Democrats did but didn't do it.
I think your timeline is off a little bit. The problem started when the filthy ass CRA was signed into law. However, Clinton enhanced it as you indicated. The guarantees were in response to the pushback on the pressure of the CRA. Once Clinton agreed to provide a safety net for the loans then it was destine to create a failure.
I agree with you. The filthy ass government needs to stop regulating us so much. They always do the wrong thing because they don't do it for the good of the country but for the good of the special interest groups. In this case the special interest groups were the minorities that couldn't get credit. The economy was almost ruined because of that Welfare Queen mentality greed.
Liberals should stop trying to do good because it always turns out to be bad.