Media Matters - RW Media Spreads Myth That Affordable Housing Caused Financial Crisis

[TomCADem]

Here is another right wing media generated myth that is being spread along with the VAT fear mongering campaign. So, the gist is that the federal government should not regulate derivatives. Instead, crack down on low and moderate income housing programs!

http://mediamatters.org/research/201004210051

Criticizing Democratic efforts to reform regulation of the financial industry, right-wing media figures have begun repeating the myth that affordable housing initiatives are to blame for the 2008 financial crisis, pointing to the 1977 Community Reinvestment Act and Fannie Mae and Freddie Mac. Economists -- including Federal Reserve Chairman Ben Bernanke -- have strongly rejected this notion.

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Hannity: "The problem came from ... the Community Reinvestment Act." On the April 20 edition of his Fox News show, Sean Hannity discussed the financial crisis and stated, "We're going to repeat the problem we don't understand." He further claimed, "The problem came from this notion that everybody in America had a right to a house whether they could ever afford to pay their loan back. That's what the Community Reinvestment Act was all about."

* * *
Bernanke: Experience "runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." In a November 25, 2008, letter, Federal Reserve chairman Ben Bernanke stated: "Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties."

[Vinnie From Indy]

1. Classic scapegoating

Blame the minorities and the poor. The same old, tired bullshit fed by the wealthy to the idiots and racists among us that cannot resist the clarion call of hate.

[bobbolink]

3. Yet, where are the voices from the "left" demanding MORE low-income housing??????

[LetsgoWings13]

2. Fannie and Freddie played a role in the collapse

[Bolo Boffin]

4. Not as bad as being stated in the RW media

CRA loans just didn't default at the same rate as privately-written loans.

http://blogs.reuters.com/felix-salmon/2009/06/26/on-this-we-agree-cra-loans-werent-the-bad-loans/

[Vinnie From Indy]

5. How?

Please explain?

[LetsgoWings13]

6. They bought up mortgages from the banks

[Vinnie From Indy]

7. That's it? That is your explanation?

It appears you merely wish that it were true and really have no idea about how this financial mess was caused.

Here at DU, one sentence answers hardly cut it. I hope all readers note your complete lack of information and how that mirrors exactly the message being fed to morons and idiots by the right wing hate/propaganda machine. Cheers!

[KharmaTrain]

8. More Revisionist Bullshit

For this to have happen, Tom DeLay would have had to have given special powers to Barney Frank (the MINORITY member of the Finance Committee) and Nancy Pelosi despite the fact that Dick Gephart was the MINORITY leader and Pelosi had little more power than to count votes.

Of course Seanity doesn't want you to remember that it was Armey & DeLay who ran the Congress like their own syndicate...ramrodding votes through (holding votes open while rushpublican arms were twisted)...Democrats couldn't even get a drink of water; remember the Conyers hearings in the basement? There was no way any Democrat could affect legislation that the rushpublican "leadership" didn't want to happen.

I'll be glad to show Seanity many foreclosed homes...McMansions. Those surely weren't purchased via FHA but surely those mortgages were put into the derivitive market as more gambling fodder with the banks betting on the owner to default.