Conservatives Push Absurd Lie that Wall Street Hustlers Were Innocent Victims ... of Poor People

[G_j]

http://www.alternet.org/economy/148454/conservatives_push_absurd_lie_that_wall_street_hustlers_were_innocent_victims_..._of_poor_people/

Conservatives Push Absurd Lie that Wall Street Hustlers Were Innocent Victims ... of Poor People

Deregulation allowed Wall Street to build a house of cards on America's mortgage industry, but many conservatives live in a parallel universe in which the banks are blameless.

October 10, 2010 |
AlterNet is proud to present this excerpt from senior writer Joshua Holland's new book, The Fifteen Biggest Lies about the Economy (And Everything Else the Right Doesn't Want You to Know about Taxes, Jobs, and Corporate America).


Perhaps the most pernicious right-wing lie of late is that the Wall Street hustlers who came close to bringing the global economy to its knees in 2008 were just innocent victims of government-sponsored programs that forced them to lower lending standards in a misguided effort to increase home ownership among the poor (read: dark-skinned).

It’s an alluring story line for those who are ideologically predisposed to blame “inner city” people instead of MBAs in suits roaming the executive suite. It’s also patent nonsense—a Big Lie that has nonetheless become an object of almost religious belief for some on the Right.

Jeb Hensarling, a notably obtuse Republican back-bencher from Texas, wrote that “the conservative case is simple”:

The compelled banks to relax their traditional underwriting practices in favor of more “flexible” criteria. These subjective standards were then applied to all borrowers, not just low-income individuals, leading to a surge in lower-quality loans. . . . Blame should directed at Fannie and Freddie , and their thirst for weaker underwriting to help meet their federally mandated “affordable housing” goals. . . . This distortion has had seismic consequences as market participants, wrongly believing GSE-touched loans were sanctioned by the government and therefore safe, began to rely on a government mandate as a substitute for their own due diligence.

..more..

[KingFlorez]

1. Reagan changed the regulations about loans

His policy changes made it possible for people to get homes with no money down, which is the reason so many poor people got loans. The banks knew those people couldn't pay off those loans.

[G_j]

2. ==

[gratuitous]

3. And poor people made them pocket those commissions

And the loan origination fees and the points purchased and the transfer fees and the assumption fees and the late fees and prepayment penalty fees and the fee-fees! It's positively inhuman what those dastardly poor folks stuffed into the pockets of the banksters! Against their will! And the bonuses. Oh God, the bonuses. Millions of dollars in some cases, just crammed into banksters' pockets, year after year. It is to weep. Weep, I say!