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27 March, 2010

Designed Dysfunction

"Obama's regulatory blueprint disingenuously claims that the Community Reinvestment Act, which pressures banks to make low-income loans, can't have contributed to the mortgage crisis, because it existed for years before the crisis began. But it is not the Act's passage, alone, that economists credit causing the mortgage crisis, but rather the unrealistic regulations adopted to implement the Act many years after the Act's passage. Economists, investment bankers, and historians have long noted the role of the CRA and its regulations in promoting the risky lending that spawned the financial crisis.

"Banks and mortgage companies have long been under pressure from lawmakers and regulators to give loans to people with bad credit, in order to provide "affordable housing" and promote "diversity." That played a key role in triggering the mortgage crisis, judging from a story last year in the New York Times. For example, "a high-ranking Democrat telephoned executives and screamed at them to purchase more loans from low-income borrowers, according to a Congressional source." The executives of government-backed mortgage giants Fanni Mae and Freddi Mac "eventually yielded to those pressures, effectively wagering that if things got too bad, the government would bail them out.

"As a Washington Post story shows, the high-risk loans that led to the mortgage crisis were the product of regulatory pressure, not a lack of regulation. In 2004...the U.S Department of Housing and Urban Development helped fuel more of that risky lending. Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more 'affordable' loans made to these borrowers."

So what we have here is that the U.S. Congress-government (which is simply a rigged two-party dialectical system directed by numerous private banking firms which own the Fed: Citigroup, BoA, JPMorgan, WellsFargo, Goldman Sachs et al) "commanded" themselves to issue loans to "minorities" and other low-income liabilities to manufacture an economic "collapse" to commence the development of their unfolding communist socioeconomic scheme. Nothing was lost by the billionaire banks, since they were all "bailed out". But that's what happens when the economic and political apparatus of a nation is controlled by congenital ravenous scum.

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