Wallet Watch

This one really gets me fired up: the conservatives — the same ones who have had the presidency from 2001 to 2008 and the Congress from 1994 to 2006, when most bad lending happened — are blamed a 1977 anti-discrmination law for getting us into the financial mess that now requires a $700 billion bailout. They’ve also desperately blamed Fannie Mae, Freddie Mac, and immigrants for getting us into this mess. Media Matters has a terrific page collecting the TV clips, radio clips, and columns where these bogus claims were made.

A couple of things come to mind. First is the sheer boldness of the false claims of the conservatives on this one. Here are two great rebuttals on why CRA has nothing to do with our current problems, as well as additional background. But to summarize: first, CRA has been in place since 1977, and most bad loans weren’t made until the late 90s and this decade. So somehow it took CRA 30 years to totally push us over the edge into needing a $700 billion bailout. Second, the obvious point is that CRA only covers depository institutions — aka banks and thrifts — and does not cover nonbank mortgage companies. During the height of the subprime years, it is estimated that nonbanks — not covered by CRA — made 75 percent of subprime loans made. Nice try.

The next thing that comes to mind is how forceful conservatives have been in making the case. This viral video that blames CRA, impressive for all the production and effort that went into it — had nearly half a million views. (I could spent several blog posts pointing out all the false claims in it.) And a Wall Street Journal op-ed by Russell Roberts, a George Mason professor, uses some pretty flimsy facts to make the case against CRA, Fannie and Freddie. Although its laughable that Roberts, in his own blog, says that the case is still “a work in progress” to see if the case is “sturdy or just suggestive.”

This terrific video rebuttal against the conservatives from the op-ed page of the Detroit Free Press finally leaves you feeling justified.