Community Reinvestment Act Re-Do: Democrats Begin Policies Again that Caused the Mortgage Meltdown

By Douglas V. Gibbs

The mortgage meltdown that put us in our current economic difficulties (recession, depression, collapse) has been blamed on George W. Bush. Somehow, the Republican President had the ability to force people to take bad loans, force banks to act stupidly, disallowed regulations against Fannie Mae and Freddie Mac (even though republicans were calling for such during his first term), and with his magic want popped the housing bubble. In reality, like Obama's policies which are extending the economic slow down, the collapse was caused by democrats, and it was done on purpose.

We were told the banks weren't lending to minorities for racist reasons, so under Jimmy Carter, and later renewed under Clinton, we saw the creation of the Community Reinvestment Act. The law enabled the federal government to force banks to lend money to consumers that were high risk borrowers, with the claim that everyone deserved to own a home. Black leaders were claiming that Blacks were not getting into homes because of the racist policies of banks, so the democrats came to the rescue to force the banks to loan the money to them. It was the usual crap. We've got to be fair, and it is not fair that some people have houses while others don't. So the federal government under liberal direction forced the banks to loan these people money at sub-prime interest rates, even if on paper it looked like the borrower was getting in financially over their head. That's okay, was the attitude. The mean ol' banks will eat the loss.

Threats of investigations emerged, and the banks were intimidated into making these loans. Then, after making these worthless loans, they got together so as to scrape something out of it. With the assistance of Fannie and Freddie, they created a new investment. Derivatives. They sold them to people saying they were a great investment, even though they were actually worthless loans doomed to fail.  They even got AAA ratings on these worthless "derivatives."

This was the only way the banks could get their money back after being forced by the federal government to take the loans. But eventually word got out, and the pool of investors dried up. Then, people got to the point of not being able to pay those mortgages anymore, as was expected, and investment houses and banks began to go under.

Then, the democrats told us that the banks were evil for making these mortgages. They did it on their own accord, and Bush was at fault for doing nothing about it. The bankers forced these people to get the loans, we were told, and the poor people didn't understand the fine print. Never mind that Bush and the republicans warned about the GSEs in 2001 and 2003, and the democrats argued back, saying there was nothing to worry about.

Then, when it all fell apart, we heard lie after lie after lie to cover up the fact that it was the democrats that caused the damn mortgage collapse in the first place.

With a deceptive mask of compassion, the liberals in the federal government caused the sub-prime mortgage disaster. And now, after all of the economic pain we have been enduring, they are working on doing the same thing again.

The federal government is currently working on a new program designed to force the banks to lend to low-credit minorities, because it is racist that they aren't getting these loans.

But now, they are even taking this to the next level. With the bank regulations and credit regulations in place, they are in place to take control of the credit rating agencies, and through regulations are planning on forcing the credit rating agencies to change their standards to accommodate these high-risk borrowers.

So, after causing this mess, and then blaming it on the banks and Bush, they are doing it again - forcing another round of bad loans, looting the banks once again, and this time beyond the reaches of any bail-out.

Why would they do this? Why would liberals push for the same policies that caused this mess in the first place?

This is all happening through Dodd-Frank, and the idea is to destroy the banking industry. They can't just take over the banks in the open. You'd recognize the fascism for what it is. They have to destroy the banks, and then claim they have to take it over to save it. That is how the liberal left works.

If a black or Hispanic is disapproved for a loan, the democrats are crying racism, so through government they are playing the good guy to protect the minorities from being discriminated against. Never mind that the people targeted are unable to pay back the loans.

Obama has spent his whole Presidency claiming that republicans are racist, banks are racist, credit companies are racist, and pretty much anyone that dares to disagree with him are racist. So, since it has been drilled into the uninformed voter's heads, it's pretty easy to convince them that if they don't get a loan it is because the lender is racist.

Besides, those banks are private, and he's already told us that nobody is successful without the government (remember? You didn't build that!). Banks are screwing you, the democrats are telling minorities, and they've been screwing you since the founding of this nation, and the only way to stop it is through government intervention. The bankers are rich, and are after profit, so they are evil.

Obama and the democrats have convinced a large number of people of this crap.

Many of these people already think the system is against them, so why not believe Obama and the democrats on this one? They are just trying to help. . . right?

The next mortgage crisis will completely collapse the private mortgage and credit industry, and just like with health care, the democrats (and progressive republicans) will be poised for a government takeover of that industry too!

Unless we stop them.

-- Political Pistachio Conservative News and Commentary

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