I disagree. He is pointing out that politics, specifically the urban populism as he terms it, was largely responsible for the problem. You can't lay political blame without being political to a degree, but he also says republicans were complicit. Liberals want to say that CRA was not a problem, but that is clearly untrue. You don't encourage sound lending when you start making mergers contingent on payoffs to groups like ACORN. Or when you start pushing FNM/FRE to buy up no doc loans from iilegal immigrants et al. Similarly, he points out we had the benefit of the S&L crisis of the late '80-s-'90 era to demonstrate the danger of government-backed entities, yet pols like Barney Frank and Chris Dodd blocked efforts by the GSE's regulator to rein them in. Whether it was because Frank's boyfriend was an exec there or because the GSE's were run as slushs funds for out of work democrat politicians, I can't say.
Basically that article in 1999 predicted the future. And the other important learning lesson here is that Democrats have to buy votes in order to stay in power...this was exactly what they (Slinton and Frank) wanted with the easing of lending requirements....buy more votes.
your remark is typical liberal nonsense propounded by university professors, who lead a life of leisure that most people aspire to. absolving the leaders of blame is to say that they do not need to rise to the level of responsibility that goes with being a leader.
That assertion is falsified by a whole variety of factual evidence. It's not about liberals or conservatives. CRA can be seen as part of a larger problem, but, yet again, there's all sorts of evidence that pretty much disproves that the issues had a lot to do with CRA. I also would like to point out that "it's all the CRA" argument, for which Pinto and Wallison are the main standard-bearers, is something that is pushed very aggressively by the banking lobby, because it absolves the industry of pretty much all responsibility. Given that Calomiris is getting on this bandwagon and judging by his attitude to the Volcker Rule and Glass-Steagall, I suspect he's yet another advocate of letting the banks carry on as before. That, regardless of your political leanings, is criminal, IMHO. Well, I don't think it's sensible to single out the Democrats or specifically Barney Frank. The entire political establishment in the US, Republicans and Democrats alike, didn't have a good idea of the risk represented by the GSEs. In 2003 and 2005 both Democrats and Republicans suggested very similar ideas for reform of the GSE regulatory framework (neither of the two made it into law), but the Republicans have repeatedly stressed how important the GSEs are for the US economy. So it's revisionist history to somehow suggest that it was all the evil Democrats' fault and the angelic Republicans were pure as the driven snow. Again, in my view, any serious analysis of what happened and how things went wrong can't start with a politically-motivated bias. IMHO, the issue at its root has to do with the US financial-political oligarchy (both Republican and Democratic alike) that has been consistently able to engineer outcomes favorable to itself. If you want a much more eloquent description of the problem, read "The Quiet Coup" by Simon Johnson. Inasmuch as the GSEs were simply part of the oligarchy, they're most certainly to blame.
That sounds just like a campaign slogan from Call Me Dave in the UK. "We are all in this together" so fuck off and ask me the next question. (OK so the second part of the sentence was not a direct quote.) The fact is that many of the culprits have not suffered and they need to have their bubble burst or can we just finally give up on this pretense of capitalism and democracy?
start around minute 17:00, everybody college finance major should see this.... http://www.youtube.com/watch?v=RLWIPyQXcRE
Well AAA, the moral of the story....don't post articles from colombia.... Seriously though, I read a lot and early on I learned to take a pass on articles from Colombia, There is better stuff out there. The CRA has been around for a long time in one form or another I think since Carter, we would have had problems long before "08.
JPM Chase, Goldman Sachs, Morgan Stanley, CitiGroup, Bank of America. Too Big To Fail. The NEW GSE's...
Most subprime lenders weren't subject to federal lending law CRA. Fannie. Freddie. Coup de grâce. More CRA Idiocy I know the Fed has quite a few papers but there are those people out there in the wildnerness who don't believe anything their govt tells them unless it's happy thoughts from a republican govt that is running things into the ground. Maybe the Columbia prof is just trying to get on Team Republican the way Mankiw is on it. Mankiw, btw, is to be Romney's chief economist.