On Wed, Oct 8, 2008 at 10:43 AM, David B. Shemano <[EMAIL PROTECTED]> wrote: > Raghu writes: >>> This is all completely irrelevant to the main question of this thread: >>> did political pressure (specifically the CRA) force lenders into >>> making even a single loan that was otherwise considered unprofitable >>> or uneconomic by the lender? There is zero, repeat ZERO, evidence to >>> suggest this ever took place. Lenders made subprime loans because they >>> were enormously profitable. Period. > > Agreed. Nobody was forced to make a loan.
Excellent. So lets stop blaming the CRA then for subprime mortgages then. At worst, the CRA was ineffective. At best, it helped reduce discrimination in availability of credit for minorities. >>> The poor and the minorities, as always, make convenient scapegoats >>> after the fact, for problems created by rich bankers. > > Yes, but. Nobody forced the bankers to make the loans, but nobody forced the > borrowers to take the loans. A good case can be made that predatory lending practices were borderline coercive. http://www.hud.gov/offices/hsg/sfh/pred/predlend.cfm In general, poor people are easier to coerce and intimidate than rich people. >>> Whether or not increased homeownership is a desirable political goal >>> is a completely different question that should be discussed on its own >>> merits. Lets not confuse two different issues here. > > You can't. Political goals manifested themselves in the rules of the game. Sure. Why is that a bad thing? >>> Can you provide some sources for the above? I don't know of any >>> politician or policymaker who said we need to prop up homeprices or >>> that we need to bailout homebuilders. Many politicians and other have >>> said foreclosures need to be stopped. That is a completely different >>> thing. > > Hard to pick just one. Let's try a statement from the esteemed Senators > Baucus and Grassley on April 2, 2008. You can find the statement through > this link: > http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=aBAqIZIOUWf4. > This was their statement in support of the "Foreclosure Prevention Act of > 2008," which proposed to change the tax laws to permit the homebuilders to > carryback their present losses to the bubble years when they made their > profits, at an estimated cost of $25 billion. Fair enough. But as far as I know these were throwaway lines. No one ever took them seriously enough to bail out homebuilders or prop up home prices. And I agree with you that that is a good thing. -raghu. -- Today is National Existential Ennui Awareness Day. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
