Friday, February 20, 2009


OK, this is probably the thousandth time I've seen or heard this nonsense repeated, so let's set the record straight (again).

MYTH: Making home loans available to poor communities and poor people created toxic mortgages and caused the financial markets to collapse.

REALITY: Only the morally bankrupt and the truly clueless make this argument.

Here are the goods on the poor-people-caused-the-meldown myth, as drawn from Media Matters:

On MSNBC, Pat Buchanan perpetuated the myth that government efforts to expand affordable housing to underserved communities caused the financial crisis, a charge that has frequently taken the form of attacks on the Community Reinvestment Act. In fact, as Fed chairman Ben Bernanke has stated: "Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties."
Got that? Poor people did not cause the market meltdown!

If you want to know what caused financial markets to collapse look no further than (1) the the financial sectors willingness to lend to anyone with a heartbeat, (2) their efforts to package and sell these loans to anyone looking for a quick buck (which generated significant fees), and (3) their decision to "insure" these packaged loans with "insurers" who had neither the means nor the intention of following through if the market collapsed (this is what happens when you have no one regulating "insurers").

In real simple terms, it was greed and stupidity on the part of the financial sector that got us into this mess. Conservatives need to leave the poor out of this ...

- Mark

UPDATE: As if on cue, here's former Senator Phil Gramm blaming the poor for the market meltdown in the Wall Street Journal. The deregulation policies he spearheaded, incredibly enough, had nothing to do with the market collapse. Imagine that ...

No comments: