Lil White Lies: No Way CRA Redux

Bryan White published a hurried response to my “Lil White Lies: No Way CRA” by, first off, plaintively demanding why I am calling him a liar. That’s been dealt with in another post. This post is only to respond to his CRA “argumentum ad nauseum”.

Along with that, he spent nearly half the piece going on about why John Carney could not be so conservative because he “attacked the content” of books by Mark Levin and Sean Hannity. Well, Carney may attack their books, but there’s one point they are all mostly in agreement on, which is the subject of this blog post: The CRA and its “significant” role in the subprime crisis. Levin and Hannity’s names both link to articles attesting to that.  I will admit I don't have anything on Glenn Beck in this regard, because he's gone more in the conspiratorial direction of the CRA's connections to ACORN.

Sidebar: More toxic than Chinese Drywall

So, the Chinese were sending us toxic building materials….and held the toxic debt they were bought with.

While looking into the role of the CRA in the subprime crisis, I also did some research on Fannie Mae and Freddie Mac, the two GSE’s that many Republicans like to say were complicit in the debacle due to their buying the mortgages to free up capital for the banks and mortgage companies to make more subprime loans.

Some of the information was quite contradictory. First there was this from Businessweek published in September, 2008:

“Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.”

Lil White Lies: No Way CRA

My "blog nemesis" Bryan White seems to revel in criticism of his local newspaper columnist, Robyn Blumner, whose credentials include having been a director for the ACLU.…Well there ya go!

At his blog there’s a *Topic of Note* section devoted to “Bashing Blumner” which includes his numerous write ups. One recently piqued my interest.

As stated by Bryan in his write up, the essence of this particular column by Blumner was that she… “perhaps once again inspired by a book from a liberal author, attempts to explain why Republicans are wrong to pin the financial crisis on the Community Reinvestment Act [CRA].” The liberal author Blumner drew from was financial expert and author of book Bailout Nation Barry Ritholtz, which  explains why the CRA was not to blame. The basis of Bryan’s contention of Blumner “buying” Ritholtz’s faulty reasoning was a critique by John Carney of Business Insider. This is the John Carney who wrote this article at the website American Conservative where he stated “We’re the backbench of a minority.”