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Monday, October 24, 2016

The Occupy Wall Street movement signifies that people are finally blaming the bankers — not middle- and working-class buyers — for the financial meltdown. Cynthia Tucker writes in her new column, “Protesters Turn Up The Heat Where It Belongs”:

There have been many wrongheaded explanations for the financial meltdown that fueled the Great Recession, but none is more ridiculous than this: The banks were brought down by greedy working-class home buyers aided by the heavy hand of the federal government. In other words, a financial crisis that has swept through the Western world was caused by secretaries and bus drivers who bought four-bedroom houses they couldn’t afford.

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  • kurt.lorentzen

    Bankers are definitely in the field as far as placing blame goes. But can you really give those secretaries and bus drivers a total pass for spending a half million on a house when their incomes were $60K? There’s plenty of blame to go around – and there are plenty of places to assign it.

  • peace_dww

    @kurt.lorentzen – No one got a loan for $500k with an income of $60k. You’re either exaggerating or falling for the myth pushed by the political candidates. The problem was many bus drivers and secretaries purchased homes based on jobs they thought they would have for a long time before state level cuts and down sizing due to the economic crash. Granted, there are some who mismanage their money, but instead of demonizing those people, why not offer some way to educate them. The way some people (and the political candidates) are so disrespectful to the American people is appalling. Also, those who did get $500k home loans ended up being upside down on their loans due to the bubble in the housing market bursting. Now those homes have decreased values due to the slow and stagnant housing market. The sad part is that the toxic derivatives pedaled by the unregulated system made for a huge pay off for the toxic derivative pushers either way. Talk about profiting from the suffering of others and I’m convinced they knew exactly what they were doing.

  • Duelles

    Cynthia: Since you have the Pulitzer Prize and expert knowledge, please tell us when the redlining laws came into effect and how they altered lending practices by institutions you claim to be at fault.
    In the early 1970s, community activists dubbed the exclusion “redlining” after the lines on the maps, and succeeded in largely ending it with the help of the Community Reinvestment Act, which requires banks to meet the credit needs of the communities where they operate. (And please, please, don’t go blaming CRA for the crisis – the law does not require lenders to lend to unqualified borrowers, and virtually all subprime and other high-risk lending was done by lenders not covered by CRA.)

    And you may find this site interesting< From Red-Lining to Reverse-Red-Lining, Disparate Treatment and Disparate Impact Data
    Published July 8, 2005 – South Carolina, USA