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It's not at all surprising to see the Republican candidates for president pushing the myth that the whole housing boom and bust wasn't at all the banks' fault, but instead the undeserving unwashed who took the loans. But, really, the supposedly liberal New York City Mayor Michael Bloomberg should know better than to peddle that crap.

BLOOMBERG: I hear your complaints. Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was plain and simple Congress who forced everybody to go and give mortgages to people who were on the cusp. Now I'm not so sure that was terrible policy, because a lot of those people who got homes still have them, and they wouldn't have had them without that. But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody.

And now we want to go vilify the banks because it's one target, it's easy to blame them and Congress certainly isn't going to blame themselves. ... Having said all of that, we've just got to focus on how we move and get the mortgage business and construction going rather than how we got here and who did it. It's fun and it's cathartic, I dunno, it's entertaining to go and to blame people and look to the past, but it doesn't do anything for the future. And most of the protesters down there are complaining, I think they should be out there trying to change the world and make it better.

Yeah, not true. The subprime loans that the private banks and lenders who drove the housing bubble with all those subprime crap loans are not subject to the Community Reinvestment Act, the 1977 law Bloomberg is referencing. That's just for a start. Read that whole link from Paul Krugman for the full debunking.

It'll make Bloomberg's 1 percent buddies happy to hear him stick up for them, but it's still a lle.

Originally posted to Joan McCarter on Tue Nov 01, 2011 at 04:04 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Tip Jar (32+ / 0-)

    "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." —Warren Buffett

    by Joan McCarter on Tue Nov 01, 2011 at 04:04:34 PM PDT

  •  It's VERY Widely Believed in the Population nt (6+ / 0-)

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Nov 01, 2011 at 04:13:15 PM PDT

  •  The Financial Crisis Inquiry Commission report (17+ / 0-)

    is very clear about this. The vast majority of the banks' bad loans were NOT even subject to CRA. The least regulated mortgage originators had the worst default rates & were most involved in subprime.

    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

    by randomfacts on Tue Nov 01, 2011 at 04:20:38 PM PDT

  •  Ah, "innocuous Mike" strikes again (6+ / 0-)

    He's with us on everything but the war economy right?

    Mayor Conflict of Interest.

    Slap happy is a platform.

    by averageyoungman on Tue Nov 01, 2011 at 04:20:58 PM PDT

  •  Oh boy now the one percent (8+ / 0-)

    are officially pulling on their victim costumes. Guess they felt uncomfortable as soul chewing zombies....

    •  Yeah, whenever I hear this (5+ / 0-)

      zombie lie I think: yeah, right.  The banks are so fucking scared of what passes for regulation of the financial sector they were forced, forced I tell ya, to make what they knew were unsound loans.

      Does anyone really think the government would make them do anything they didn't want to?  I mean, they blow up the fucking economy and nothing happened.

      A little tender courage at that rare right instant, and things might well have turned out differently -- Ken Kesey

      by Frankenoid on Tue Nov 01, 2011 at 05:52:28 PM PDT

      [ Parent ]

      •  This is how (0+ / 0-)

        all the crap started 3 years - and laying it on the Community Reinvestment Act and the 'stupid' borrowers.

         Like we're all supposed to believe minorities brought down the global financial network

  •  He must resign. Citizens must hold him to account (4+ / 0-)

    for abuse of his leadership position.  In New York!  This is what must be done to all that break the public trust and blame the very citizens he is to represent.

    These things cannot be brushed off by us, no one is going to do anything unless we do it.  Even if you like them -- cannot protect peers ever.  That us why police clap at their crooked peers, we are not there for the honest ones.

    He should correct his lie, even children in New York schools know the truth.

    Scratching around in the ancient dirt of repellent prejudice instead of tackling the real issues is amateur hour. ~ Henry Rollins

    by mawazo on Tue Nov 01, 2011 at 04:31:08 PM PDT

  •  again, don't confuse us with facts...n/t (1+ / 0-)
    Recommended by:
    pickandshovel

    My forthcoming book Obama's America: A Transformative Vision of Our National Identity will be published in Summer 2012 by Potomac Books.

    by Ian Reifowitz on Tue Nov 01, 2011 at 05:24:31 PM PDT

  •  lying sack...i mean, republican (3+ / 0-)
    Recommended by:
    pickandshovel, HoosierJay, flavor411

    the facts mean NOTHING to these people

    Kick a "job creator" in the balls today!

    by memofromturner on Tue Nov 01, 2011 at 05:34:21 PM PDT

  •  Why did New Yorkers give this a-hole a 3rd term? (3+ / 0-)
    Recommended by:
    JC from IA, HoosierJay, WheninRome

    The man needs to go away and enjoy his billions with his other 1-percenter pals.

  •  This could give Tom Friedman... (2+ / 0-)
    Recommended by:
    Bob Love, a2nite

    ...a major frownie face.

    (Assuming Friedman isn't spouting the same crap, which he may be.)

    2010: An Unforced Error Odyssey

    by Minerva on Tue Nov 01, 2011 at 05:34:59 PM PDT

  •  As I said when this whole thing got going, (4+ / 0-)

    Bloomberg is way out of his comfort zone, dealing with citizens instead of city players.  He is foundering, and any potential plans he has to be Mayor for Life are looking bad.

    Who in the world ever characterized him as a liberal, anyway?

  •  Bloomberg speaks... (0+ / 0-)

    that's abuse of air.

    Things are more the way they are today than they ever were before. -Jimmy Flynn

    by onionjim on Tue Nov 01, 2011 at 05:35:28 PM PDT

    •  Excellent summary, bosdcla14 (0+ / 0-)

      I printed it, bookmarked it, and saved it as a Word document. LOL, I am old and my memory is short. I don't want to forget this one.

      Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

      by RJDixon74135 on Tue Nov 01, 2011 at 06:20:12 PM PDT

      [ Parent ]

  •  The Burlesque History of Wall Street (0+ / 0-)

    This burlesque routine describes the state of Wall Street:

    Monopoly Man

    http://youtu.be/...

  •  Oh, give me a break (6+ / 0-)

    Hint: BLOOMBERG!

    He's not just in bed with WS, he exemplifies WS.

    Why would any sentient being ever think he would not lie, cheat, steal, frame, alter facts, and deny reality, to protect himself and his billionaire brothers in crime?

    What we call god is merely a living creature with superior technology & understanding. If their fragile egos demand prayer, they lose that superiority.

    by agnostic on Tue Nov 01, 2011 at 05:38:11 PM PDT

  •  It's the blacks and the poor that brought (5+ / 0-)

    this country to it's knees financially. The blacks and the poor swindled the educated rich to lend them money they couldn't pay back. The rich bankers were swindled  by the blacks. Because you know how powerful the blacks are at swindling money from the fat cat bankers. It's always the blacks fault  for all our problems.

    If Kasich says State Troopers are assholes, What does that make me?

    by buckshot face on Tue Nov 01, 2011 at 05:39:13 PM PDT

    •  Yup, it was the MBS that rich (0+ / 0-)

      people were sold and all of  these deals that caused the trouble. but that is way to complicated, like tax cuts create jobs....big lie there, also.

      When all else fails blame the  n. That is the  real reason why we are here.

      Love ur sig, Prince John is monster  like his radical R brethren.

      The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

      by a2nite on Tue Nov 01, 2011 at 06:21:55 PM PDT

      [ Parent ]

  •  Even if you assume, for a moment, that (4+ / 0-)

    Congress FORCED banks to give the loans, we wouldn't have the problem we have today. The problems are not the loans. The problem stems from chopping the loans into thousands of pieces, assuming that every single payment would be made, then selling one $100,000 loan as 1,000 $1,000 securities.

    Done with politics for the night? Have a nice glass of wine with Palate Press: The online wine magazine.

    by dhonig on Tue Nov 01, 2011 at 05:45:10 PM PDT

    •  exactly. If instead of bailing out the banks, we (0+ / 0-)

      just paid off the 'bad' loans, we would still be in the same predicament. The bad loans are such a small percentage of the total 'bad debt'.

      "We can't solve problems by using the same kind of thinking we used when we created them." - Albert Einstein

      by pickandshovel on Tue Nov 01, 2011 at 06:02:05 PM PDT

      [ Parent ]

  •  I heard St. Tom Brokaw on Scarborough's show (3+ / 0-)

    this morning propagating that same lie.

    Politics is not arithmetic. It's chemistry.

    by tamandua on Tue Nov 01, 2011 at 05:53:18 PM PDT

    •  again and again (2+ / 0-)
      Recommended by:
      HoosierJay, JohnnySacks

      In my daily arguments (fights) with my wife it dawned on me that no matter how correct I am, she has her story and she is going to stick to it no matter what the truth is or what I would say.
      Arguing just increased the room temperature and brought into play all the old scores (Against the mutual wishes of letting the sleeping dog lay)
      It is the same with the conservatives and rest of the American population. It does not matter what the truth is. Whoever controls the narrative, and it is usually the one with the money to control the media, feeds the fairy tale to the population and they buy it not just graciously but endearingly.

      Ah, the American dream...It is yet another myth perpetuated by the top 1% to make the the rest 99%, slave for them, to make their dreams come true.

      by brown american on Tue Nov 01, 2011 at 06:30:00 PM PDT

      [ Parent ]

      •  You're A Saint (0+ / 0-)

        Honestly, I don't know what I'd do if my wife was in that corner.  Do you not watch political news?  Do you have to watch an hour of O'Reilly and Hannity and she has to watch an hour of Maddow and O'Donnell?

        Bad enough I have to  listen to it at work (and I work at the heart of the source of all the free money of the 90's and 2000's that added the fuel to the fire)

  •  Does no one remember (5+ / 0-)

    that it was NOT the mortgage defaults that caused grown men to wet their pants?!?

    The failing mortgages were bad enough -- but the banks and the financial world could have survived those. It was the bundling of the mortgages into CDOs, and the subsequent insuring of those CDOs through CDSs, that were the REAL problem.

    IIRC, you would only need 5% of the mortgages to default, in some instances, to have the junior tranche of the CDO to go under. Some of these bundles of shit had default rates around 35% -- but still they were rated AAA.

    And let's not forget that ANYONE could buy a CDS on the CDO. That's right -- I can buy a CDS on YOUR mortgage, and so can 10 other people, and if you default we ALL have to be paid!

    And who came up with these amazingly risky ways to use YOUR money from your savings and investments?

    That's right -- WALL STREET!!

    When Wall Street comes to its senses, then we'll stop blaming it. Until then, they get the blame.

    The bad mortgages were a leaf fire in the back yard. Wall Street laid down gunpowder paths from the leaf fire to every other house in the neighborhood, then threw a 55-gallon drum of gas on the fire. You're damn straight we blame them.

    Bruce in Louisville
    Visit me at brucemaples.com

    Follow me on Twitter: @brucewriter

    by bmaples on Tue Nov 01, 2011 at 05:53:51 PM PDT

  •  No, I won't (2+ / 0-)
    But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will.

    Fannie and Freddie don't make loans to individuals.

    The loans made by community banks subject to the Community Reinvestment Act are outperforming the loans made by the big mortgage brokers like Countrywide.

    BTW, Angelo Mozilo, chairman of the board and CEO of Countrywide settled with the SEC early this year for a $67.5 million fine and a lifetime prohibition from serving as a director or officer of any public corporation. Peanuts for him, and it gets him off from any criminal prosecution.

    Bloomberg did not make a mistake about this. He knows better. He's a lying SOB.

    Men never do evil so completely and cheerfully as when they do it from a religious conviction. -- Blaise Pascal

    by RJDixon74135 on Tue Nov 01, 2011 at 05:57:17 PM PDT

  •  I would never call Bloomberg "liberal" (3+ / 0-)

    but I would expect the guy whose fortune is based on the dissemination of acurate financial information to be a bit more reality-based...and to have a little more respect for the intelligence of his audience. This is tea-party banana oil.

    "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

    by Alice in Florida on Tue Nov 01, 2011 at 06:11:38 PM PDT

  •  Psssst he's one of them the evil 1% he just plays (0+ / 0-)

    a reasonable human being on he TV.

    Tipped and rec'ed.

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Tue Nov 01, 2011 at 06:15:17 PM PDT

  •  He keeps flirting with a Presidential run. He must (0+ / 0-)

    literally be Romney's worst nightmare. Romney, in his striped pj's, circa 1954, awakes with sweat pouring from his brow. His wife has swiftly come to his aid from the adjacent twin bed.
    "You screamed, Mitt...was it..."
    "Yes, yes,  yes, yes!"
    "...Bloomberg."
    "Don't worry, dear...the evangelicals will never accept
    a Jew."

  •  Wow.. (3+ / 0-)

    ..an opportunistic, party-hopping  billionaire 1%er games  the system so he can get a 3rd term as mayor, & during his 3rd term as mayor, he's not the trustworthy man of honor everybody who went along with his 3rd term power grab thought he would be.

    Nobody could have seen this one coming.

    When Fascism comes to America it will be wrapped in excess body fat and carrying a misspelled sign.

    by wyvern on Tue Nov 01, 2011 at 06:22:48 PM PDT

  •  It is not surprising at all. (2+ / 0-)
    Recommended by:
    Dr Erich Bloodaxe RN, flavor411

    I would expect nothing less from Mayor Bloomberg. It has been several years since he has had the ability to voice his own opinions. He is one of the most beholden politicians in the system. Just look at how many Bloomberg terminals are in the Wall street firms.

    It will be interesting to see people start to abandon the rich. It will happen as we get closer to the elections.

    People like Mayor Bloomberg are backing the rich but know in their heart of hearts that Occupy Wall Street is correct and will grow stronger.

  •  He's a Perfect Example of what OWS is all about (2+ / 0-)
    Recommended by:
    flavor411, davidkc

    He has been bought out by Wall Street and corporate interests, and is a perfect example of things that need changing in this country.

  •  CRA did not cause this crisis according to the fed (1+ / 0-)
    Recommended by:
    oxfdblue

    The Subprime Crisis: Is Government Housing Policy to Blame?

    Robert B. Avery
    Senior Economist  

    and  

    Kenneth P. Brevoort
    Senior Economist

    Division of Research and Statistics

    Board of Governors of the Federal Reserve System
    Washington, DC 20551

    August 3, 2011

    ABSTRACT

    A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.

    We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA’s effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.

    We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.

    http://www.federalreserve.gov/...

    Time to put this lie to bed.

  •  Bloomberg is supposedly liberal? (0+ / 0-)

    Do tell.

  •  sidebar: corruption in neighboring New Jersey (0+ / 0-)
    Mafia Takes Over Publicly Traded Company

    "The defendants gave new meaning to 'corporate takeover,' " said U.S. Attorney Paul Fishman


    http://en.wikipedia.org/...

    United States Attorney for the District of New Jersey

    As Occupy Wall Street protestors chant about the criminals in the boardroom, actual thieves -- including men associated with the mafia -- have spent years quietly running FirstPlus Financial Group (FPFX), a Texas-based company and a one-time subprime lender that boasted former Vice President Dan Quayle as a board member, and used NFL Hall of Famer Dan Marino in its ads.

    9-9-9 Is so simple it turns out to be a simple trick to enrich the 1%. - Flat Tax Proposals Are Perpetual Fount of False Promises. Underwater Pizzas, Upside Down Pizzas Etc. Etc.

    by anyname on Tue Nov 01, 2011 at 07:44:46 PM PDT

  •  Community Reinvestment Act? (0+ / 0-)

    Oh okay, I get it now: Poor people caused a banking crisis.

    That's good. Tell me another one.

    Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. - Groucho Marx

    by Joe Bob on Tue Nov 01, 2011 at 07:50:44 PM PDT

  •  Bloomberg really plays the voters 4 suckers (1+ / 0-)
    Recommended by:
    flavor411

    He rules but he clearly stands with the corruption of Wall Street, as they prey on the American people.

    I'm an American Liberal. Blogging in between family, work and activism time.

    by AlphaLiberal on Tue Nov 01, 2011 at 08:15:34 PM PDT

  •  Mike bets the Rs have a deadlocked convention (0+ / 0-)

    We know he wants to be President but can't figure how a New York Jewish former D can pull it off.

    But this kind of bull that he knows is a fiction just might make him palatable when Mitt can't get over the finish line and the money guys start to panic about Obama getting re-elected!

  •  yeah, that's a lie (0+ / 0-)

    I worked for a subprime lender for a while (disclaimer: I was just a wage slave and didn't make loans) and I know that's not the case. Easy money and lack of oversight created just what you'd expect: a feeding frenzy for greedy crooks.

  •  Three words. Loan origination fees. (0+ / 0-)

    Those boys made a killing on loan origination fees. The higher the price the higher the fee.

    Then, bundle it up, and sell the risk to a pension fund.

    It's not illegal. And it will make money on the front end.

    If it fails, well, we're TBTF, they'll have to bail us out.

    And we're insured by AIG.

    There's a sucker born every minute.

    The Republicans are bunco men.

  •  Bloomberg is the mayor of the city where most of (0+ / 0-)

    the financial industry works.  Like he's going to say that it's their fault?  Besides, his wealth is from that financial information network and news reporting system, who is going to talk to a Bloomberg reporter if he says that everything is the banker's fault.  Facts are very convenient things to ignore when the perpetrators are paying your salary.

    And it feels like I'm livin'in the wasteland of the free ~ Iris DeMent, 1996

    by MrJersey on Tue Nov 01, 2011 at 10:57:42 PM PDT

  •  A REPUBLICAN LYING (0+ / 0-)

    about the too big to fail banks!!!!!  SAY IT ISN'T SO!!!!!

    Bloomberg knows which side his bread is buttered on.

    I'm afraid those days are over.  People aren't buying it.  They can see who is getting special treatment and WHO got out of the recession not only unscathed but with bonuses and parties.  The greed of the banks caused this, and THAT is what the 99% know!!!!  Lie through your teeth, Bloomberg.  It won't do any good.  

    It's the optics that put the lie to your words.

    While the banks party hearty, the 99% are losing food and medicine and housing and jobs.  

    Yes, let's all feel sorry for too big to fail, but apparently NOT too big to whine.

  •  The banks are worried (0+ / 0-)

    no matter what "spokesmen for BofA" say.  The fact of the matter is, the 99% are waking up to the fact that the BANKS NEED US MORE THAN WE NEED THEM.  WE ARE THE POWER.  WE JUST FORGOT FOR AWHILE.  

    Who do you think put Bloomberg up to this?

  •  Wouldn't call it lies (0+ / 0-)

    Read the comments from Krugman's blog. Congress (and Barney Frank) hold responsibility, as do banks. Its not an either or. Fannie and Freddie started the mess, then were passed by banks during the peak bubble. But they still started the trend.

    Congress subsidized housing (which will always help bubbles form), banks committed fraud (some of it actually legal), and borrowers reached for more than they could afford. Because all 3 were involved, the scale was massive. If it were only 1, would've been a much smaller bubble.

    •  'Fannie and Freddie Started the Mess'? (0+ / 0-)

      Some of those comments are fairly insane, and I don't know what qualifications any of the authors have.  I would like to hear a rebuttal from another PHD economist in a debate against Paul Krugman but I try not to read newspaper comments, makes me feel like I'm lving on Mars.  Can you 'splain me how Fannie and Freddie Started the Mess?

      Because if you're looking for how it started, in my admittedly unqualified opinion, Fed monetary policy might be a better target.  Free money perpetrating unwise borrowing, which in turn resulted in price inflation.  The $150,000 house at 8% ended up being a $300,000 house at 4%, the only difference being the 30 years of debt servitude on twice the principal.  Add Wall Street 30x leveraging masquerading as 'financial innovation' to the mix and you've got a real bomb.

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