Mike Konczal on the stubborn, fact free insistence that the government created the housing bubble:
The conservative think tanks spent the 2000s saying the exact opposite of what they are saying now, and the opposite of what Bloomberg said above. They argued that the CRA and the GSEs were getting in the way of getting risky subprime mortgages to risky subprime borrowers.
My personal favorite is Cato’s Should CRA Stand for “Community Redundancy Act?”, (2000, here’s a writeup by James Kwak), arguing a position amplified in Cato’s 2003 Handbook for Congress Financial Deregulation Chapter: "by increasing the costs to banks of doing business in distressed communities, the CRA makes banks likely to deny credit to marginal borrowers that would qualify for credit if costs were not so high."
Be careful, reading Peter Wallison on the CRA and GSEs' affordability programs in 2003 and then 2008 is liable to give you whiplash.
:: posted by buermann @ 2011-11-02 12:12:06 CST |
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