I know this video is bullshit. But I don't know enough to know why exactly it's bullshit but I'm having to, wanting to, argue with McCaininites about this... it's one of these ploys with lots of stats, quick flashing pictures of graphs and time lines.
It blames this crisis on Democrats (surprise) and it blames Obama because of alleged (bullshit, guilt by association) ties to Fannie Mae, claims donations to Obama from Fannie Mae, and so on.
Seriously, I would like a bullet point of fact checks to debunk this vile piece of garbage.
points from comments if/as they occur after fold (got too big):
And if no one here can or will do it then what use is DailyKos..?
But I know you can do it!
But if you can't, I really have no reason to hang out wasting time here.
- well correct me if I'm wrong but the GOP had majorities in both houses and GWB as president, they could have passed any law they wanted to regulate Freddie and Fannie. They didn't do it.
Facts are on our side.
From yesterday, Business Week:
"The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA."
From the same article:
"Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley. (http://www.traigerlaw.com/...)."
From the same article:
"...keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks."
A helpful timeline from yesterday's Barron's:
"1999: The Financial Services Modernization Act repealed Glass-Steagall, a law that had separated the commercial-banking industry from Wall Street, and the two industries, plus insurance, came together again. Banks became bigger, clumsier, and hard to manage. Apparently, risk-management became all but impossible, even as banks had greater access to larger pools of capital.
"2000: The Commodities Futures Modernization Act defined financial commodities such as "interest rates, currency prices, and stock indexes" as "excluded commodities." They could trade off the futures exchanges, with minimal oversight by the Commodity Futures Trading Commission. Neither the Securities and Exchange Commission, nor the Federal Reserve, nor any state insurance regulators had the ability to supervise or regulate the writing of credit-default swaps by hedge funds, investment banks or insurance companies."
"2001-2003: Alan Greenspan's Fed dropped federal-fund rates to 1%. Lulled into a false belief that inflation was not a problem, the Fed then kept rates at 1% for more than a year. This set off an inflationary spiral in housing, and a desperate hunt for yield by fixed-income managers."
- McCain and Gramm caused crisis
- The Community Reinvestment Act required mortgages in the sub-prime market. It did not require low-doc, no-doc and interest-only mortgages. Banks were permitted to demand higher interest rates in subprime situations; they just weren't supposed to shut the door. Instead, they used deregulation to sell mortgages with inadequate documentation and poor underwriting, then sold them off with CDOs and CMOs that were effectively unregulated and poorly packaged. CRA had nothing to do with the greed that caused this mess.