Sunday, June 28, 2009

Nobody REALLY Believes The CRA Crashed The Bubble

By "Nobody," I mean self-proclaimed wunderkinder like John Carney, a noisy, reckless sharpie who peddles his nonsense on a blog called "Business Insider." The Business part is probably self-explanatory. The "Insider" part refers to where Carney has to work his facile tongue to provide his 'sources' with lingual prostate massages. He appears to have acquired a taste for their shit. For all his pretentious leering an his incredibly WEAK face, his privileged teen-ager sneer, he's only #3 on the Google list of "top John Carney" hits (the top one being a prestidigitator, the second a pro-football place-kicker for the Giants) and he doesn't even appear on the Wikipedia list of prominent "John Carney's."

Nevertheless this aspiring "Carney" delivered himself recently of a re-iteration of an already-long-debunked Rightard/Flying Monkey history revision blaming the increased access to affordable housing for the Nations brown, black and other "poor" for the collapse of the housing bubble. Dickweeds like Carney who spread such calumnies should have their fingers mangled so that they have to type with tom-tom mallets attached to their foreheads.

Ryan Chittum, former WSJ staffer who has fled the Dark Side for the light of the CJR "Audit" blog, does a masterful job of interpreting both Carney's alarmingly misinformed speculations and Felix Salmon's adept filleting of Carney's excesses.

Because, of course, the contribution of the CRA mortgages to the sum and total of the "bad mortgages that triggered the 'securitized mortgage' crisis was and is minuscule. More than 90--way closer to 95--percent of the bad mortgages causing the problems today were written, not by banks (which were the sole authorized lenders for CRA mortgages) but by the fly-by-night scum and slime at places like "Countrywide" and HFC (now part owner of Citi, nest paw?). Here's the nutz of Salmon's complaint against Carney:
Salmon says at one point:
The fact is that the CRA did not encourage banks to extend the kind of toxic loans which ended up being such an important component of the financial crisis. Indeed, most of those loans weren’t made by banks at all — they were made by unregulated sub-prime lenders who had no CRA responsibilities whatsoever.
But Chittam's not done. He goes on to present any number of other prominent critics of Carney's methodology, style, and parentage. One example:
Here’s Federal Reserve Governor Elizabeth A. Duke talking to the American Bankers Association in February, noting that a tiny minority of loans were under the CRA:
I would like to dispel the notion that these problems were caused in any way by Community Reinvestment Act (CRA) lending. The CRA is designed to promote lending in low- to moderate-income areas; it is not designed to encourage high-risk lending or poor underwriting. Our analysis of the data finds no evidence, in fact, that CRA lending is in any way responsible for the current crisis…. In fact, the analysis found that only 6 percent of all higher-priced loans were made by CRA-covered lenders to borrowers and neighborhoods targeted by the CRA. This very small share makes it hard to imagine how CRA could have caused, or even contributed in a meaningful way, to the current crisis. Further support for this conclusion comes from our finding that serious delinquency rates for subprime loans are high in all neighborhood-income categories, not only those in lower-income areas, as might be thought if the CRA were a contributing force to the subprime crisis.
The rest of the piece, which i nice and long and full of nifty quotes, charts the trajectory of the debunking of Carney's (and the Right, in general') misleading claims, and should provide a welcom resource for folks who don't have at hand the data with which to dismiss what are fundamentally racist claims by the right that the poor are to blame for their own and our own 'diminished' conditions.

No comments: