The latest right wing talking point

[billyskank]

well, that has come to my eye anyway. I am often the last to know about stuff. ;)

We must all have seen that some people say the financial crisis is the fault of poor people, who shiftily took out loans that they had no intention of repaying, or greedily bit off more than they could chew. Standard blame the victim fare (the poor always get screwed the worst in a recession, just as they benefit the least from the boom years).

But I have read a few times on the Guardian's talk pages people blaming the liberals, for FORCING the banks to lend mortgages to sub-prime borrowers. According to this idea, it is all caused by affirmative action and political correctness. Just thought you should know that I am seeing this lie being spread around a bit. The Guardian's talk boards are infested with Americans who, while I would not call them Freepers (most of them can spell and write sentences), they certainly have the same politics as Freepers.

[InternalDialogue]

1. My uneducated but standard response to that point has been:

If the banks had loaned unqualified buyers money to buy houses and had verified the value of those properties and analyzed the real estate market correctly, then when the home buyers defaulted, the banks would have repossessed and recouped their loan. The only "loser" in that scenario is the unqualified home buyer.

But combine the housing bubble (which intelligent lenders should have foreseen) combined with loans that required no income or asset checks, and you've got the makings of a disaster, especially once lenders (who realized the risk of their loans) repackaged them into high-risk investment vehicles. It was like spreading the plague.

I know very little about the high-stakes economics, but I know enough to realize that a worldwide economic panic can't stem from poor people trying to buy too much house for their incomes, Butterfly Effect or no.

Don't mean to preach to the choir, just thought I'd throw in my two cents.

[billyskank]

3. No I know, I think it's bullshit too.

Even if every sub-prime borrower defaulted together tomorrow, the amount of money would not equal the losses that are bringing the banks down now. The banks made this problem themselves by vastly overvaluing their assets.

The natural question is, how could they have been so stupid? What are these wankers paid millions for, if they don't even know their own business?

Which does tend to steer me towards the cynical view, that it was not stupidity, and that this whole situation was engineered on purpose. By whom, I do not know. I imagine someone with that much power would keep themselves out of the public eye anyway. I do not tend to subscribe to conspiracy theories, but that does not mean that conspiracies never happen.

[lizziegrace]

6. Like the new shirt design!

:)

:thumbsup:

[InternalDialogue]

9. Hey, lizzie!

Yeah, I just did that today. Actually, it has changed already (shareholder input -- pfft!).

[supernova]

2. Yes, that's the rationale that has yanked ACORN into it

ACORN has been in the low-income housing advocacy biz at least since I was little, but nevermind common sense.

True story, I first applied for a job with them straight out of college. I didn't because I didn't feel like I had enough "gravitas" for the job at the time. Silly me.

[billyskank]

4. Even now I read people saying that the crisis occurred because of

too much regulation. They say that the banks failed because of moral hazard, that the bankers took irresponsible risks because they knew that the government would bail them out when their bets went wrong.

I imagine some people even believe this. What they don't understand is that the government has no choice but to guarantee the banks. It is politically impossible to let a bank fail if it would take hundreds of thousands of voters' savings with it. In fact, it is a fallacy to pretend that economics and politics can be separated.

So given that the state has an obligation to prop up the banks in the case of failure, they cannot be treated like ordinary businesses.

[Tommy_Carcetti]

5. I'm mad! I'm mad!

Do you know that I'm mad? Well I'm mad!
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at those liberals! And socialists!

I'm telling you, I'm mad!

[cwydro]

7. Yeah, America's biggest blowhard,

Rush Limbaugh, is peddling that line as well.

Too bad it made it across the pond.

[TrogL]

8. I've been hearing the same meme

Lots of stuff about "immigrants and people of colour who should never have been given loans in the first place", blaming it on Carter and praising Raygun.