Comment Last Three
November 18, 2008
Below is a good article detailing how Congress and Ex-President Bill Clinton started the financial mess that we are now experiencing due to the CRA,Freddie, and Fannie.
Two months ago, I noted how a September 1999 article in the Los Angeles Times praising the Clinton administration’s enforcement efforts of the Community Reinvestment Act inadvertently showed how they created the housing bubble by praising all of the excesses of the White House and Congress. King Banaian pointed out a City Journal article from the following year that took a much-less complimentary look at the CRA and government use of it — and predicted almost exactly what would follow eight years later. In fact, it also predicted the scope of the collapse:
The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.