Sunday, June 28, 2009

Last Call

How many times must people drive a stake through the bullshit that is "Broke-ass black people caused the housing collapse" anyway? The Community Reinvestment Act (CRA) did not cause the housing depression. Greed did.

Barry Ritholz kills this garbage once again:
Assume arguendo that CRA legislation forced banks into making high risk, ill advised loans. And, let’s further assume a huge percentage of these government mandated mortgages have gone bad. The buyers who could not legitimately afford these homes or otherwise qualify for other mortgages have defaulted, and these houses are either in default, foreclosure or REOs.

What would this alternative nation look like?

Given the giant US housing boom and bust, this thought experiment would have several obvious and inevitable outcomes from CRA forced lending:

1) Home sales in CRA communities would have led the national home market higher, with sales gains (as a percentage) increasing even more than the national median;

2) Prices of CRA funded properties should have risen even more than the rest of the nation as sales ramped up.

3) After the market peaked and reversed, Distressed Sales in CRA regions should lead the national market downwards. Foreclosures and REOS should be much higher in CRA neighborhoods than the national median.

4) We should have reams of evidence detailing how CRA mandated loans have defaulted in vastly disproportionate numbers versus the national default rates;

5) CRA Banks that were funding these mortgages should be failing in ever greater numbers, far more than the average bank;

6) Portfolios of large national TARP banks should be strewn with toxic CRA defaults; securitizers that purchased these mortgages should have compiled list of defaulted CRA properties;

7) Bank execs likely would have been complaining to the Bush White House from 2002-08 about these CRA mandates; The many finance executives who testified to Congress, would also have spelled out that CRA was a direct cause, with compelling evidence backing their claims.

So much for THAT thought experiment: None of these outcomes have occurred.


In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

As the Master Control Program famously said, "End of line." Good old fashioned greed killed the housing market. The CRA is nothing more than a convenient dupe, when it turns out it might have actually been the only positive thing going on in the entire housing market during the Bush years.

Just A Little Closer To The Truth

Steve Benen comes a bit closer to the truth of the GOP and health care reform:

Maybe now would be a good time to remind the relevant players that there are different political parties for a reason. Democrats and Republicans are -- I hope you're sitting down -- supposed to disagree.

They have very different policy agendas, driven by different worldviews. That they're struggling to agree on how to pass the most sweeping overhaul of the health care system isn't surprising; that they're trying to overcome this is.

A.L. noted this week:

For as long as I can remember, the Democratic party has fought to increase the government's role in providing health care coverage for Americans while the Republican party has fought to reduce the government's role. The Democrats are responsible for Medicare, Medicaid, and S-CHIP; the Republicans fought all of those initiatives. On a policy level, the Democrats believe that the best health and cost outcomes can be achieved by increasing access and encouraging widespread use of routine and preventative medical care. Republicans, on the other hand, have routinely identified the problem as over-consumption of care. Their proposals to fix the system inevitably involve significant deregulation with the goal of encouraging the use of high-deductible policies to try to discourage personal consumption of health care. Nearly every Democrat (including the blue dogs and "centrists") believes this to be bad policy.

In other words, there is virtually no common ground between the parties. The parties don't even see eye-to-eye regarding basic goals and policy assumptions.

There's nothing wrong with this. It's nice and pleasant when both sides can agree, and President Obama probably hoped the situation was so severe, Republicans would put aside many of their preconceived ideological objections to reform, and work in good faith towards obvious, common-sense solutions. That's not going to happen, of course, but that's not necessarily awful. The political system expects the parties to argue with one another. It's a feature, not a bug.

It looks like the opposition party is going to criticize and object to the Democrats' health care reform effort. That's what opposition parties do -- they oppose.

Sen. Jay Rockefeller (D-W.Va.) asked the other day, "[D]o you want to be non-partisan and get nothing? Or do you want to be partisan and end up with a good health- care plan? That is the choice."

The process will probably go much smoother once negotiators come to grips with this.

And from there, it's just a couple small steps to the realization that the GOP never, ever, ever will accept health care reform in any way. There's a big difference between simply opposing the plan and actively working to destroy it by any means necessary. Steve has finally accepted the former, but the trick is of course that the GOP is actively engaged across the board in the latter.

If Obamacare passes, the GOP is done for a generation. I've said that for quite some time now. Any Democrat behind passage can turn to their constituents and say "Democrats helped get you and your family health insurance. What have the Republicans done for you? They did everything they could to try to stop this." And the voters will nod their heads and go "You're right. Thank you."

They know it's a generational bribe, but it's a necessary and useful one. One in six Americans lacks health insurance. The Republicans will never spend a dime to fix that. Ever.

So the Republicans are scared, truly frightened. This is why we're seeing such hateful, over-the-top rhetoric and accusations against Obama, such an ardent effort to dehumanize the President and his supporters as something less than American, something less than human, as Those Who Are The Enemy. If Obama is successful on health care, he'll go a long way towards dismantling the Pretty Hate Machine that has sprung up since 1990 or so. Most importantly, he'll prove that government can actually help the people.

The Republicans can't afford that. They've bet the farm on using fear and hatred to control America for far too long. If Obama comes along and dismantles that, they have nothing. They become powerless.

It has to die, or the GOP does. It is, quite honestly, an existential battle.

John Boehner Has Quite A Mouth On Him

He used it to try to basically filibuster the ACES bill and to swear at it, calling it a "pile of shit".

Minority Leader John Boehner (R-Ohio) had a few choice words about House Speaker Nancy Pelosi's (D-Calif.) landmark climate-change bill after its passage Friday.

When asked why he read portions of the cap-and-trade bill on the floor Friday night, Boehner told The Hill, "Hey, people deserve to know what's in this pile of s--t."

Using his privilege as leader to speak for an unlimited time on the House floor, Boehner spent an hour reading from the 1200-plus page bill that was amended 20 hours before the lower chamber voted 219-212 to approve it.

Eight Republicans voted with Democrats to pass the bill; 44 House Democrats voted against it.

Pelosi's office declined to comment on Boehner's jab. But one Democratic aide quipped, "What do you expect from a guy who thinks global warming is caused by cow manure?"
Thers at Whiskey Fire on the other hand has a much worse (better?) pottymouth.

A Possible Coup

The BBC is reporting that the President of Honduras has been arrested and detained by that country's army in what one of his supporters is calling a military coup.

President Manuel Zelaya's secretary said he had been taken to an airbase outside the capital, Tegucigalpa.

Mr Zelaya, elected for a non-renewable four-year term in January 2006, wanted a vote to extend his time in office.

The referendum, due on Sunday, had been ruled illegal by the Supreme Court and was also opposed by Congress and members of Mr Zelaya's own party.

Reuters news agency reports that soldiers fired teargas at about 500 supporters of Mr Zelaya who had gathered outside the presidential palace, as air force jets flew over the capital.

Early on Sunday, a reporter for the Associated Press news agency said he had seen dozens of troops surround Mr Zelaya's residence.

The arrest comes after President Zelaya defied a court order that he should re-instate the chief of the army, Gen Romeo Vasquez.

The president sacked Gen Vasquez late on Wednesday for refusing to help him organise a referendum.

Mr Zelaya, who under current regulations leaves office next January, also accepted the resignation of the defence minister.

The referendum was to ask the population if they approved of a formal vote next November on whether to rewrite the Honduran constitution.

Seems Zelaya wanted to pull a Hugo Chavez and the Honduras military was having none of it. We'll see where this goes.

Related Posts with Thumbnails