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Monday, December 11, 2017

So here’s my question: If the Community Reinvestment Act of 1977 effectively caused the Wall Street meltdown of 2007 by forcing banks to make bad home loans to improvident poor people (and we all know exactly who I mean), how come it took 30 years for the housing bubble to burst?

Next question: If fuzzy-thinking Democratic do-gooders enacted such laws in defiance of common sense and sound economics, why didn’t Republican presidents Reagan, Bush I or Bush II do something? Was Rep. Barney Frank, D-Mass., secretly running the country?

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3 Responses to Mike's Bloomin' Subprime Lie

  1. Thank you for finally correcting the record on exactly what happened here. Back in 1984 I was able to buy a house because I no longer needed to have 20% down. I made a good salary, but was not able to accumulate 17,000 for a down payment on a relatively inexpensive condo (taxes and expenses pretty much consumed my pay). I was, however, perfectly capable of making payments on a 95% loan, especially with the mortgage deduction, and I did have $5,000. This was what the law was designed to do, not to allow loans to people based on false income or no income statements and manipulate the interest rates so they could hang in there long enough for the bank to make money.

  2. I am currently reading WSJ’s Ron Suskind’s new book, Confidence Men, on “Wall Street, the Government and ‘the education of a president.'” It goes back to about 2006 and traces both Obama’s career and campaign and the roots of the current economic crisis. He KNOWS this stuff. It is the most relevant, NOW book I could imagine falling into my hands at this moment in history. Get it!

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