’)Oh no, the facts!
As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.
Commentators say that’s what triggered the stock market meltdown and the freeze on credit. They’ve specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie’s and Freddie’s financial problems.
Federal housing data reveal that the charges aren’t true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics
I don’t expect this to stop the explicitly pro-racist arguments being pushed right now by McCain, the RNC, and conservatives. But this is the reality.
And, sadly, this will convince exactly noone. Anything contrary to what Rush, et al. says ‘it’s the librul media, whaddayou expect?’ Anything that goes with with Rush, et al. says, it’s ‘even the librul media was forced to admit it!’
Of course, one of the resident cons could really surprise me and bust out a ‘you know, this might have some merit.’ Whaddya say, fellas? Prove a cynic wrong?
Factcheck’s parties responsible for the crisis (not surprisingly): Everybody.
“racism is out Linus blanket”-repubs
I think ‘blame’ is the only thing most people will do when they face huge problems. Some people seriously love to spend their time and energy to blame instead of solving or deal with problems.
Instead of spending the time to think about whose fault, I think people should start thinking how to deal with the economy problem right now and broadcast the message. Blaming is fun and makes us feel good but it only make the situation worst.
Taking the government’s contribution as a source of the problem is not a good way to see this.
http://hotair.com/archives/2008/10/12/the-quotes-that-explain-the-entire-financial-meltdown/
Affirmative action and lending practices do not mix. And this idiot in his own words, a Clinton appointee, flat out admits it.
As mccann proves indisputably, another zombie lie has been born.
There is nothing that can now be said or shown that will ever shake the conservative faith that minorities and liberals caused the housing crisis. For the rest of our lives and probably longer than that, conservatives will be repeating the line over and over, refusing to acknowledge all the facts to the contrary.
Our children’s children will wonder “WTF?” in countless future threads and their parents will explain to them, your grandfather and mother were there when the zombie lies was born, they did all they could …
Fannie Mae and Freddie Mac eliminated the risk entirely for private lenders through the purchase of the subprime loans. Without that risk and with almost-guaranteed short-term profits of subprime loans, lenders went wild while Fannie and Freddie repackaged them as quasi-government bonds for investors.
To say it was a private sector caused crisis is to deliberately miss half the story.
AGAIN, jmacc, CRA loans were LESS likely to default than non-CRA loans.
Also, remember that John McCain wanted to privatize Social Security. If he had his way a few years ago, SS would be in the toiler.
Similar to “hippies made us lose in Vietnam” or “Reagan singlehandedly won the Cold War” or even, “The Kaiser’s Germany was stabbed in the back by Jews”, the zombie lie that liberals and brown people caused the Second Great Depression will live on in Wingnuttia forever.
That phrase is great, fafaroo. “Another zombie lie.”
By the way, I hope I’m wrong about the Depression.
For the record, “zombie lie” is not my phrase. I first read it on Eschaton.
It’s a brilliant phrase because it accurately sums up most of the stories that conservatives tell themselves about each other and liberals: They are lies that just won’t die and, of course, they eat brains.
Heya, Oliver,
Keep up the good work! I’ve been worrying about the Right’s repetition of this Big Lie for a long while now. REPETITION works!
Reasons that it’s a lie: Fanny Mae is a very small bailout compared to others. Another crucial component of the Crisis is that the HEDGE Fund inflation of assets is really the cause of the current crisis and only the “insiders” acknowledge it. Unfortunately, that’s a bipartisan problem as Larry Summers and Bob Rubin and Bill Clinton are also implicated. But Reaganomics ala Alan Greenspam is especially guilty for these toxic WMDs of finance. The current run on Wall Street’s assets has little to do with the long ago written off mortgages of corrupt mortgage brokers.
Logic fails anyone who thinks that the WALL STREET bankers and the Shadow Banking System can attest that there are 560 Trillion Assets on the books within Hedge Funds (incl. Credit Swaps).
Do the math…the Entire Household Assets of the USA is somewhere around 50 Trillion and the USA is at least a quarter of the World’s. Where’s 560 Trillion that the Hedge Fund managers say there is? That’s a True Boil of Pretentious Proportions. And the failure to Regulate the most powerful market of the last decade is the reason…ala Reagan, Bush, and all ‘Free Market’ dogmatists.
Affirmative action and lending practices do not mix.
Agreed. Let’s keep the over-elderly away from the executive branch.
William,
Don’t hold your breath waiting on anyone on this blog to understand how government intervention into fannie and freddie’s practices PARTLY caused this mess. These people have no interest in the truth if it doesn’t fit their world view.
Jmac, get your talking points straight, we all know that hte gays are responsible for all this.
j mccann
tell me again who was in the Executive and who controlled the Congress when all those Fannie Mae problems came about? Democrats? Or which President bragged about his success in getting more American’s into the Ownership Society ? Oliver Stone maybe can tell you?
again, ‘toxic mortgages’ might have been a tipping point… but hardly does the relative small amount of defaults account for the Shadow Banking system’s use of leverages like those of pre-Depression leverages. The whole house of cards is tumbling down Not due to some poor homeowners not being able to pay inflated rates.
Perhaps it’s all part of the Plan: Drown the Beast in Debt and make the middle class poorer and in debt to the Oligarchy. Just like Republican’s like Reagan/Bush and Grover Norquist wanted.
This can’t be good –
“Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury’s $700 billion Troubled Asset Relief Program.”
These practices started under the Clinton administration. Both Clinton and Bush bragged about home ownership. People predicted this almost a decade ago. The bottom line is, you don’t tell companies to buy shit loans in the name of social justice. When that started, anyone that could breathe could basically get a mortgage. I personally know a couple that were approved for $180k when neither of them had jobs. But they got the loan, because the primary lender can sell the crap mortgage to fannie and freddy. When the bubble burst, that’s when the whole house of cards collapsed. There is enough blame to go around on both parties. The whole subprime idea was perpatuated by liberals, and the greed by primary lenders made things even worse. It seems that some of you have no interest in the whole truth. Are you honestly going to tgell me that conservatives thought it was a good idea to hand shit (in this case mortgages) to people that shouldn’t have them. If so, that’s the most ridiculous thing I’ve ever heard. It was democrats running the show at fannie and freddie, so it’s pretty stupid to try and completely pass the buck on this.
Fannie Mae and Freddie Mac eliminated the risk entirely for private lenders through the purchase of the subprime loans. Without that risk and with almost-guaranteed short-term profits of subprime loans, lenders went wild while Fannie and Freddie repackaged them as quasi-government bonds for investors.
willie, please do us the kindness of reading the entire article before you comment on it.
Thank you.
[...] The Private Sector Caused The Mortgage Crisis (Not Minorities, ACORN Or Other Conservative Lies) [...]
Muley: You mean get off of my own land?
Agent: Now don’t go to blamin’ me! It ain’t my fault.
Muley’s son: Who’s fault is it?
Agent: You know who owns the land. The Shawnee Land and Cattle Company.
Muley: And who’s the Shawnee Land and Cattle Company
Agent: It ain’t nobody. It’s a company.
Muley’s son: They got a President, ain’t they? They got somebody who knows what a shotgun’s for, ain’t they?
Agent: Oh son, it ain’t his fault, because the bank tells him what to do.
Muley’s son: All right, where’s the bank?
Agent: Tulsa. What’s the use of pickin’ on him? He ain’t nothin’ but the manager. And he’s half-crazy hisself tryin’ to keep up with his orders from the East.
Muley: Then who do we shoot?
Agent: Brother, I don’t know. If I did, I’d tell ya. I just don’t know who’s to blame.
The Grpaes of Wrath
Grapes
I don’t think anyone is claiming that Fannie and Freddie were brilliantly run. However, their problems were problems of the private sector, not of government interference; they were driven by concerns about market share and were being pressured by their shareholders to get into the mortgage-backed security market. As is obvious, Fannie and Freddie are not the only financial institutions that bought into MBSes and other credit-instrument derivatives. If this were just about the FMs, how is it that nearly every investment bank in America has either been bought out or requires a massive infusion of money from the government or foreign investors?
The only way to blame this solely on government interference is to ignore that the other financial institutions that had no interaction with the CRA (institutions like Bear Stearns, Lehman, Morgan, Goldman, et al) also have been damaged. Mortgage-backed securities looked like the best thing since sliced bread because the credit rating agencies gave them high ratings even when the underlying mortgages were subprime. And the credit rating agencies’ ratings are protected as First Amendment expression of opinion. These agencies don’t suffer from over-regulation — the real problem is that they have taken what in other areas is a government role, the judgment of an item’s basic safety and quality (see food, drugs, cars, toys…) when consumers aren’t able to see how it was made.
The government has turned over this assigning of ratings to the private sector, and unsurprisingly the private sector found a way to make money on it (the agencies get paid for their ratings by the people whose products they are rating!) without protecting consumers.
Fox. Henhouse.
Also, I am really sick of the lie, perpetuated by FactCheck, that the Gramm-Leach-Bliley Act passed the Senate 90-8. The 90-8 vote was on the conference report, not on the bill when it came before the Senate. The actual Senate vote on passage of the bill was almost straight party line — no Republican voted against it, and the only Democrat to vote for it was Hollings of SC.
FactCheck.org should be ashamed of itself for not understanding the difference between a vote on passage of the bill versus a vote on the conference report.
By the way, I just thought of a great plan to help get the economy back on track. We just help stimulate the multi-billion dollar wedding industry by expanding its consumer base? How? By legalizing gay marriage. It’s great, because gays make more per capita than heterosexuals. It’s not going to solve the whole thing, but it’s a start. Unless the economy-hating ultra-cons oppose it that is.