
Download | play
Download | play (h/t Heather)
In times of unrest, it's amazing how quickly some people will go to finding some way to scapegoat the least powerful among us. One of the themes reverberating around right wing world is that ACORN and the Community Reinvestment Act are to blame for the sub-prime mess, as this segment on Lou Dobbs echoes here.
It goes back to something known as the Community Reinvestment Act that passed in 1977. The law ordered banks to make loans to low and moderate income people. The Consumer Rights League says ACORN stepped in and used that law to pressure banks to lend to sub prime borrowers, even those who couldn't demonstrate the capability to pay back the loan.
Catch all the barely hidden subtext? It's all these "community organizers" (hmmm....remind me, whose resume has been scoffed at for being a community organizer?) FORCING these poor, hapless banks to lend money to these shiftless low and medium income people, and worse, illegal aliens (Dobbs' personal scapegoat for all things wrong with America). How dare these leftist grassroots groups (tied to the Democratic Party, naturally) cause the ruin of the American financial system with their demands?
It's easy to see how this would appeal to right wingers like Dobbs, Malkin and Savage . Too bad it's not true:
The Community Reinvestment Act caused financial institutions to lend to people who weren't credit worthy. This is crap. The CRA was signed into law in 1977 -- over 20 years before the current crisis. The second problem with this theory is the CRA only applies to banks and thrifts. Most of the mortgage lending during the last boom came from -- mortgage lenders who aren't regulated by CRA. I explained this all in more detail here.
The CRA tried to force banks to keep from redlining neighborhoods to keep minorities out...something I'm sure gets right wingers up in arms. And the charge that ACORN was to personally benefit from the bailout? Lies. It was stricken from the bill the Republicans sabotaged yesterday, as this side-by-side comparison of the various bills shows. Admittedly, ACORN has its problems (though related to voter registration and not home mortgages), but as Rep. Keith Ellison says:
The president told the nation that the crisis is due to "the irresponsible actions of some jeopardizing the financial security of all." There are even lies circulating that blame minorities for the crisis through the Community Reinvestment Act. This is factually wrong -- and repugnantly bigoted. In fact, the root cause of the failures today is the ideological rigidity of the Bush administration, and its conservative friends in Congress and on Wall Street who oppose regulation, oversight and corporate accountability. For eight long years their mantra has been "regulation and oversight is bad" and "the free market is good."
But now, when their policies have failed and the chickens have come home to roost, taxpayers are asked to help them out. We have little choice. We cannot let Wall Street fail, because if we do, Main Street fails as well.
Transcripts below the fold
Continue reading »