Tuesday, October 06, 2009

Showdown in Chicago

My chief extracurricular activity for the month of October.

More explanation to follow.


voter said...

A big part of the recent financial meltdown was that congress interfered in the banking industry by directing Freddie/Fannie to put the people first and give home loans to people who really shouldn't have received them.

Toby said...

False. Analysts from the Federal Reserve, FDIC, and the FBI (white collar crime) have denied that the crash is attributable to the Community Reinvestment Act (this is the conservative talking point you're referring to here), except perhaps a tiny part of it.

In fact, the vast majority of subprimes were made by institutions not under the regulation of the CRA, and even at institutions governed by the CRA, this legislation was not the biggest force driving subprime lending.

So why were all these banks engaging in subprime lending? Same reason they do everything else: they were making shitloads of money.

Incidentally, the subprime racket and subsequent crash is just a piece of the problem. It's one aspect of a pattern of irresponsible and exploitative behaviour that goes back a long ways, and still continues.