’)I’m tempted to say that CNBC’s Larry Kudlow came to this conclusion because he’s back on drugs, but it’s even worse than that. Kudlow, and many conservatives, are not in fact chemically imbalanced but seriously believe this crap.
In this clip from Morning Joe, Kudlow details how he believes that the poor multibillion-dollar firms on Wall Street were forced to give mortgages to the thuggish poor, and that is what caused the current meltdown on the market. The reality of course is, as always, Wall Street got greedy, had no oversight, and then promised many people the chance to own a home and sold them a bill of goods built on a mountain of sludge.
On the other side were many speculators who thought they could flip these houses quickly, and that buying led to an increase in the bubble and again Wall Street was just handing out money like it was going out of style without government oversight.
But no, Larry Kudlow says, its the poor people’s fault for wanting to own a home and its the government that forced the poor Wall Streeters to do this. Off to the debtor’s camps with them!
Ol’ Larry is talking right out of his ass.
The Community Reinvestment Act didn’t force any bank to make a “no documentation” loan to anyone. He’s just making that right up.
Most “subprime” loans were made by lenders that weren’t even covered by the CRA. So if Larry thinks the CRA was the cause of the subprime meltdown, he’s making that up too.
Make fun of the guy all you want. He is a clown, but drug addiction is nothing to joke about. It doesn’t have a political persuasion.
Oliver, you’re the one who is on drugs because you apparently didn’t listen to what Kudlow said. He’s clearly talking about sun-prime loans and the like, the bulk of which went to people who could not pay those loans back. Was it their fault? In part, yes because people shouldn’t take on debt they can’t pay back. But they should have been told, “No.” But that of course, would have had the left clucking about discrimination. This is one of the few times that I will say Joe Scarborough was talking out of his ass. And you saying that this happened because of the lack of oversight is just crazy fucking stupid.
It was the government, through programs like the CRA and the push for home ownership as some kind of right that led to lending institutions being pushed to come up with schemes that would help people get approved for mortgages they normally wouldn’t qualify for under normal circumstances. No doc loans, interest only, ARMS’s, etc. Did the lenders get greedy? Damned right they did, but when people wanted to step in and do something about it, what happened? Democrats pretended like everything was A-OK and basically blocked any changes.
And when Bush wanted to make changes in 2003 as he saw what was coming, who stepped in the way? Democrats of course, led by Barney Frank who said, “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis” and accused the Bush administration of exaggerating the problem which would lead to less people being able to afford homes.
John McCain said:
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac…and the sheer magnitude of these companies and the role they play in the housing market…If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie and Freddie pose to the housing market, the overall financial system, and the economy as a whole.
That was in 2005. Chris Dodd helped to kill the bill that McCain co-sponsored.
“But that of course, would have had the left clucking about discrimination.”
This is, of course, not even remotely true. Discrimination is when people who are qualified for loans are denied them because of race or the neighborhood they live in (you’ve heard of redlining, Jay, right?) or some other unrelated matter. Giving loans to people who can’t afford them is not what CRA was or is about at all.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
Just another right wing talking point with no basis in reality.
How’s this for a talking point?
The top 3 Recipients of Fannie Mae and Freddie Mac campaign contributions from 1989-2008:
Chris Dodd
BARACK OBAMA
John Kerry
Ouch.
Jay leaves out the fact that many people who borrowed sub-prime were not poor people, buy speculators. Once they maxed out their mortgages under regular terms, but still wanted to buy other properties to flip, they rushed into sub-prime. Do you really think poor people in Florida were rushing to get those high-end condos in Miami? Second, NYC, which has a substantial poor population, did not see this happen. Developers just kept building and building while ignoring demand, depending on financial institutions to pump up demand with cheap credit.
Just googling for “Bush Fannie Freddie 2003″ I came across tons of blog posts all spewing the same stuff. Stuff like this:
There is a huge, huge difference between making it easier for low income people to get mortgages and just “giving mortgages to people who could not pay them back.”
If conservatives, like Kudlow, can’t see the difference it’s because they don’t want to. They are ideologues out to make political hay out of a massive failure of oversight in the face of corporate greed.
As the article I linked to above states:
Jay, if you want to argue that mortgage companies not covered by CRA made irresponsible loans to people because they feared “the left clucking about discrimination” I really just don’t know what to say.
It’s ridiculous.
KXB, I don’t deny that speculators, looking to turn a quick profit and using the sub prime market as a way to attempt to make money weren’t also part of the problem.
Of course, you have people like Quaker and Fafaroo buying into left wing twaddle that the CRA had almost nothing to do with the problem when it in fact plays a large of the problem.
Here’s DiLorenzo’s response to rebuttal to Gordon’s piece:
http://mises.org/story/2963
Actually the legislation he sites,
The Community Reinvestment Act, does indeed mandate fines for lenders who do not make “sub prime” loans. The intent of the act was to provide affordable housing for those unable to afford it (i.e. “poor people”) and this was generally considered a good thing by both parties. Despite the well-meaning intentions, the consequence was a high rate of mortgage defaults and the resulting financial repercussions. In fact in several of his speeches Barack Obama criticized the failure of government to protect “poor people” from these kinds of loans. Ludlow and Obama essentially hold the same view on this issue and are both correct in my opinion.
BTW, Ludlow did say repeated in that video clip he is blaming Congress for the disastrous consequences of this legislation, not poor people.
Larry loves his white’s only drinking fountains
It was the government, through programs like the CRA and the push for home ownership as some kind of right that led to lending institutions being pushed to come up with schemes that…
Wait, wasn’t the rise in home ownership one of the allegedly good things that Bush did?
“Look at how great the economy is; look at all these poor people owning homes!”
At least it was a couple of months ago.
Republicans cannot be trusted to run a national economy.
I love conservatives: Any attack on a liberal in a storm.
Here we have the most typical conservative response to poverty in America, courtesy of the Heritage Foundation:
http://www.heritage.org/Research/Welfare/bg1713.cfm
In another thread, our good friend Save Farris showing just what a good parrot he can be:
Above, in this thread, we have the other, crisis-induced line of attack in which trying to encourage home ownership among low income families is the reason for all our current financial ills.
So do Republicans want to praise America for how it treats its low income citizens or do they want to blame low income Americans for all its ills? Who knows. Any attack will do.
In 2003, the White House and Republicans proposed bringing the the regulatory authority over Fannie and Freddie into the Treasury away from HUD. At the time, Democrats argued that such a move might threaten affordable housing programs WITHOUT ACTUALLY IMPROVING OVERSIGHT.
In other words, the Republican plan was to kill the very mission that Fannie and Freddie were created for — to make home ownership affordable to more Americans — without actually doing anything to improve oversight.
Democrats did offer other bills to both preserve their companies core mission and provide stronger oversight. But guess who was in control of Congress in 2003, 2004 and 2005?
http://uspolitics.about.com/b/2008/09/18/republican-congress-talked-about-financial-reform-but-did-nothing.htm
“Oliver, you’re the one who is on drugs because you apparently didn’t listen to what Kudlow said. He’s clearly talking about sun-prime loans and the like, the bulk of which went to people who could not pay those loans back. Was it their fault? In part, yes because people shouldn’t take on debt they can’t pay back. But they should have been told, ‘No.’ But that of course, would have had the left clucking about discrimination.”
You are suck a fucking piece of shit, Jay.
The banks made loans to people who couldn’t afford it because they knew they could pass those bad loans to other people without every having to disclose the true risk. No one forced the banks to make these loans; they did so because they thought they could make a profit. But instead of dealing with reality, you lie about the left.
Jay,
and don’t forget about Alt-A (aka liar loans). That was used by either speculators or middle class people in expensive regions of the country. It was definitely not the product for poor. That s..t hasn’t hit the fan yet but it sure will.
The collapse was engineered by the derivative market, which was the buying and selling of the packaged loans, with no attempt to value them on the basis of the likelihood of them being paid back. They were bought and sold on the “face value” of the shaky loans. Phil Gramm pushed through a law that prohibited regulation of the derivatives, so instead of representing any actual value, they were worth whatever the seller claimed they were worth, and the government was prohibited from pointing out that this was a lie.
As long as that seller could unload this trash and get a commission for doing so, there was no disincentive.
So wingnuts, please tell us how the poor people managed to overprice the derivatives that they knew nothing about.
“Republicans cannot be trusted…”
You can stop there.
Jay is openly begging for a spanking. Sorry, Jay. No time today. Your boy DiLorenzo has erected a straw colossus in Point 2 of his summary of Gordon’s article. I’ll leave it to someone else to take it apart for you.
At any rate, the facts don’t change. Kudlow is blaming the CRA for the housing meltdown. The majority of subprimes were written by entities not covered by the CRA. Kudlow forgets to mention that.
Thank you for writing this up, I have been in shock since I saw this on Friday morning! I have now heard the same line of logic repeated 2 more times.. Jason Lewis – conservative radio “person” in MN…. and comentator on CNN ( dont rememebr who) Talk about class warfare… the reich get hand feed by the unregulated market for the last 30 years, while preaching that if you worked hard you would be rich and if your not rich you are inherently evil BUT NOW it is the poor who are to blame because they wanted to own their own house….
OBAMA 08… if not, I am not sure what is or should going happen! Peace & Love!
[...] telling, irresponsible poor people took loans they couldn’t afford, and liberal politicians forced banks into lending to home buyers unworthy of [...]
[...] yeah, Kudlow also believes the downturn is the fault of poor [...]