4 CEO's agree: Poor people did not cause the current economic crisis.

[deminks]

Whew, I'm glad that's settled. /sarcasm off.

http://thinkprogress.org/2008/12/09/myth-fannie-freddie/

Today, four former CEOs of Fannie Mae and Freddie Mac testified before the House Oversight Committee on how their companies’ actions may have “contributed to the ongoing crisis.” Blaming Fannie, Freddie, the Community Reinvestment Act (CRA), and low-income people is one of conservatives’ favorite talking points. In September, Rep. Michele Bachmann (R-MN) touted an article criticizing the CRA for pushing “Fannie and Freddie to aggressively lend to minority communities.”

But as the Wonk Room’s Pat Garofalo points out, at the beginning of today’s hearing, Chairman Henry Waxman (D-CA) said that 400,000 documents amassed by the committee showed that the right-wing claim is nothing more than a conservative myth. Later in the hearing, Rep. Edolphus Towns (D-NY) asked the four CEOs whether poor people caused the current financial crisis. All said “no”:

(snip)

Congress passed the Community Reinvestment Act in 1977, requiring banks “to lend throughout the communities they serve.” In the 1990s, greater mortgage lending to lower-income households by CRA-coveed banks increased the homeownership rate for lower-income and minority families. As CAP scholar Tim Westrich has written, “The real culprits in the mortgage mess are non-bank mortgage companies — not covered by CRA — that originated the lion’s share of bad mortgages at the heart of the crisis. They made an estimated 50 percent of subprime loans in 2005.”

Numerous other scholars, including Nobel-winning economist Paul Krugman and Center for Economic and Policy Research co-director Dean Baker, have also explained that while Fannie and Freddie made many bad decisions, they weren’t primarily to blame for the financial crisis. At a hearing in September, former top government economic experts agreed that conservatives were pushing myths, rather than facts.

[Hannah Bell]

1. Well, glad that's cleared up.

[Sherman A1]

2. Agreed

I was seriously worried that it was in fact all those pesky poor people. I was just thinking the nerve of them causing all these bank failures, because they would know how to out fox those guys in their air conditioned corner offices. Now I don't have to worry about that any more...

Had this discussion with my Republican MIL about the mortgage thing.

"If I have $100.00 to loan to you and knowing that you cannot repay me, but go ahead and do it anyway, just who is the dumb one... You or Me?" The response was just silence

[Waiting For Everyman]

3. Predatory interest did it.

If the foreclosed homeowners were paying the "good credit" rate and still defaulted, that would be one thing. That isn't the case. We have a 2-tiered credit system - low rates for the "haves", and sky high rates for the "have nots". That's the problem.

It's only benefitting the banks, which is why I don't understand why we allow it, when it's cutting all of our throats.

Rates in general now are overvalued compared to the rest of our deflated economy. They need to come down too. If not voluntarily, then by law. The "market" on interst isn't working. So it needs to be set.

We will get there eventually. The question is, how much more unnecessary damage will be done before we admit it.

[Lochloosa]

K/R Thanks

[burythehatchet]

4. The funniest part was Patrick McHenry (Idiot - NC)

when he asked the leading question: Did you feel pressure from congress to make loans to poor people?

No

No

No

No.

McHenry (Douchebag - NC): Well I'm here to tell you that you were pressured by congress to make bad loans. Thank you.

[Iggo]

5. All of 4, huh?

:rofl:

[MrsBrady]

6. oh my, that one had me worried

i just knew all those poor people with political, social, and economic power were bringing down the man.
yea, that's it.

how could I have been so wrong?

:sarcasm:

[conspirator]

7. No shit! The top 1% have more power to change or screw the world than the bottom 99% nt