Financial Crisis - Part 2

As we wait for the bailout solution negotiations to come to an end, it gives everyone time to place blame on how it happened. The easiest target is President Bush and yes, as a leader, he does need to accept blame because it happened on his watch. Yes, we know he warned us in 2001 and in 2003 about the systemic problems with Freddie and Fannie, but something should have been done. We had the majority in Congress for goodness sakes. Yes, John McCain offered up a bill in 2005 that addressed the situation...but we ignored that as well. Everyone was getting along fine, thank you very much. Prosperity and lax regulations benefit everyone. Then the other shoe dropped.

But how did this all happen, how did we start going from logical banking standards to the free for all situation that occured these past several years. It may have started back in 1977 with the Community Reinvestment Act. Just like welfare started with FDR during the Depression (drastic measures for drastic situations), the Community Reinvestment Act was a tool during the great Inflation era to help poor people in poor neighborhoods get loans.

The article that I am sharing with you deals with an entity that took full advantage of the Community Reinvestment Act and greatly contributed to the proliferation of sub prime loans...the back bone of this current financial crisis. What makes this information more troubling is that our current presidential candidate, Barack Obama, worked for them in his younger years.

The pressures used by groups like this helped me understand a little better why banks and regulators just "gave up" and "gave in" to the temptations. I know alot of bankers and money people and high risk is a dirty word to most of them. Something had to make them all throw caution to the wind...

http://www.consumersrightsleague.org/UploadedFiles/ACORN_AHC_Report.pdf

Hat Tip to Bill Hobbs