"The CRA and other government mandates didnt cover Wall Street investment banks like Goldman Sachs, pure mortgage lenders like Ameriquest, nor hedge funds like John Paulson.
"The IBs, pure mortgage lenders, and hedge funds cranked out trillions of dollars worth of subprime paper and derivatives, all in the private sector and all in competition with Fannie Mae and Freddie Mac. They did it without any government pressure. They did it because they were making a ton of money in the subprime market.
"Peter Ferrara is perpetuating a politically convenient myth, that the government caused it all, which gets treated like Gospel around here because a lot of conservatives start with the belief that only government could do something so stupid and damaging, and the facts be damned if they indicate otherwise.
"Well Wall Street spent a whole lot of money paying politicians of both stripes to dismantle the Glass Steagall act and to pass laws to prevent regulation of the derivatives industry. Google GrammLeachBliley and the Commodities Futures Modernization Act of 2000. The private shadow banking sector was in the subprime market up to their eyeballs, without government pressure, and they did a whole lot of stupid and destructive things, courtesy of their refusal to price risk correctly due to their idiotic belief in David X Lis Gaussian Copula Function.
"HUD and the CRA ought to be scrapped. But so should the claim that the government caused the crisis and that the lending business was simply an innocent victim of government regulation."
the private sector can do dumb things all on their own without gubmint help or encouragement.
If left solely to their own devices, it ‘s a short cycle. Add gubmint money and “help” and it’s a long, neverending cycle (and the dumber they are free to be)
Pinto says that the Riegle-Neal Act of 1995 that allowed interstate mergers between “adequately capitalized and managed banks, subject to concentration limits, state laws and Community Reinvestment Act (CRA) evaluations.” was much more harmful than repeal of Glass Steagall.
There are still plenty of idiots from both parties still insisting everyone should own a home.