The Most Breathtakingly Racist Logical Fallacy In The Last Week Or So

It belongs to My Second Favorite Village Idiot, US News's Jim Pethokoukis. His thesis? N*gga Stole My Economy.

There has been a lot of push back against the idea that the Community Reinvestment Act nudged banks to give mortgages to people who should have not gotten them. But then here comes this fantastic story, courtesy of the Boston Business Journal, about East Bridgewater Savings in Boston:

Bad or delinquent loans? Zero. Foreclosures? None. Money set aside in 2008 for anticipated loan losses? Nothing. ... The bank even squeaked out a profit of $87,000. And its Tier 1 risk-based capital ratio was 31.6 percent, or more than three times higher than many community banks in Massachusetts. “We’re paranoid about credit quality,” Petrucelli said. The 62-year-old chief executive has run the bank since 1992.

Yet the FDIC has turned up the heat on Petrucelli's bank, giving it an apparently rare "needs to improve rating," for not making more risky loans under the Community Reinvestment Act. Here is how the FDIC puts it: “There are no apparent financial or legal impediments that would limit the bank’s ability to help meet the credit needs of its assessment area. The FDIC examiners also faulted East Bridgewater "for not advertising and marketing its loan products enough. The bank, which does not have a Web site, offers fixed-rate mortgages."

Let me spell Jim's fantasy out for you.

1. The collapse of the housing market destroyed the economy.
2. The housing market collpased due to subprime loans going bad.
   
3. The CRA (Community Reinvestment Act) forced more loans to be created and given to minorities.
4. Jim found a bank that didn't meet CRA standards.
5. This bank didn't have any bad loans, which proves CRA caused bad loans.
   
6. Therefore, any bank that did meet CRA standards had to have made bad loans.
7. Therefore, the CRA forced banks to make bad loans or face punishment under the CRA.
8. Most banks chose to make loans to minorities to meet CRA standards.
9. To do that, they had to make subprime loans to minorities that were bad loans.
   
10. Therefore, all minorities are poor and cannot afford a home.
11. Therefore, the subprime market collapsed and it's the fault of poor minorities, not banks.
12. The CFA and broke ass minorities wrecked the economy.

Now, considering everything after 2 becomes a logical fallacy due to the fact that banks pushed subprime loans and refinance options with ridiculous terms to as many Americans as possible in order to make as much money as possible (it was okay if they foreclosed on a subprime loan once in a while, as the house they got when they foreclosed was increasing in value) and the fact that subprime loans only became possible after Alan Greenspan's easy credit bubble, we have Jimmy here basically blaming the victims.

It's repugnant, really. We're supposed to believe that while the fnancial industry was screaming REFI NOW! HISTORICALLY LOW RATES! and making NINJA loans to anyone they could find without following up on them, that the Feds held a gun to their head while doing so.

They knew what they were doing. Preying on people and calling it "the ownership society".

[UPDATE] Or as Gavin at Sadly, No! puts Jim's bullshit:

I’m not saying that a fanciful what-if scenario that I built atop a flimsy anecdote refutes all the actual data, but to let the actual data run around unchecked is ridiculous.

Yep.