Posted on 03/16/2010 5:08:43 PM PDT by Kaslin
Sunday night's "60 Minutes" interview with author Michael Lewis took Wall Street bashing to a new level.
His new book, "The Short Game," chronicles the recent financial crisis. In the interview with Steve Kroft, the talented writer railed against Wall Street's irresponsible handling of subprime mortgage-backed securities. But he conveniently neglected to say a word about the government's role in creating these securities in the first place.
Throughout history, class warfare has been used by aspiring leaders to galvanize support for their agendas.
Emperor Nero, in the year 64, found it convenient to blame Christians for the burning of Rome.
Adolf Hitler blamed the Jews for the economic collapse of the 1930s and rode that horse to the chancellorship.
Barack Obama has brought class warfare to new heights in America, fanning resentment of "the rich" and of Wall Street for causing the recent economic catastrophe. He constantly harps on this theme while pushing his social agenda of wealth redistribution with programs such as government health care and cap-and-trade.
Lewis and Obama are both justified in highlighting Wall Street's mistakes during this financial crisis. But it's disingenuous of them to ignore the crucial role the Community Reinvestment Act played in forcing banks to downgrade the quality of their mortgage portfolios.
Enacted in 1977 under Jimmy Carter, the CRA forced mortgage initiators to lower credit standards to less qualified borrowers in poorer communities. The act was expanded further during Bill Clinton's administration, creating a higher percentage and a larger pool of subprime mortgages.
Banks were criticized by the government for being too conservative in their lending standards in the 1970s, '80s and '90s and are now being vilified by Lewis, Obama and others for taking on too much risk. You can't have it both ways.
(Excerpt) Read more at investors.com ...
And, look how “cheaply” they took down the world with credit derivatives, beginning with the “subprime” mortgages. CHSmith, in an elegant piece a couple of years ago, showed how, using the Pareto Mathematial Principle, that only 4% of subprime, toxic mortgages were enough to bring down whole central banking systems:
http://www.oftwominds.com/blogaug07/pareto-housing2.html
Additional piece featuring the Pareto Principle at work:
http://www.oftwominds.com/blogaug09/housing-pareto08-09.html
Reading Jack Cashill’s new book “Popes and Bankers” A cultural history of credit & debt from Aristotle to AIG. Fabulous book! You can buy a copy at Amazon
Or, visit www.cashill.com to purchase a signed copy.
Liberals coined the policy and financial market was forced to implement it. Liberals are highlighting the flaws in policy implementation but not the policy itself that was flawed to begin with. They have to keep blaming somebody to divert the attention away from real blame.
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