his bizarre effort to foist the blame onto the Democrats

Can’t be any worse than Pelosi’s idiotic speech proclaiming that the Republicans were solely to blame for the bail-out bill not passing when the fact of the matter is that 95 Democrats opposed it too.

Moreover, all this goes to prove that the CRA did it theory is controversial and Henderson ignored that in his bizarre effort to foist the blame onto the Democrats

A good comment by poster “Adoseoftruth”:

This article is incorrect in its premise.

In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect on January 31, 1995 and featured: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks.

The new rules, during a time when many banks were merging and needed to pass the CRA review process to do so, substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans, some of which were "risky mortgages. Banks set up CRA departments, a CRA consultant industry was created and new financial-services firms helped banks invest in packaged portfolios of CRA loans to ensure compliance. Established and new community groups began marketing such mortgages. The Senate Banking Committee estimated that as of 2000, as a result of CRA, such groups had received $9.5 billion in services and salaries. As of that time such groups also had received tens of billions of dollars in multi-year commitments from banks, including ACORN Housing $760 million; Boston-based Neighborhood Assistance Corporation of America $3 billion; a New Jersey Citizen Action-led coalition $13 billion; the Massachusetts Affordable Housing Alliance $220 million. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

The CRA was public policy that DROVE the market. To cast a blind eye that obvious econic fact and simply blame "the profit motive" is ludicrous.

It is equally ludicrous to blame Wall Street and investment banks when what they did was buy up the risky mortgages that became so prevalent in the market place.

Granted, no one intended to lose money, but, to lay blame on capitalism when the real source of the problem was government in the first place indicates to me a fundamental lack of economic understanding.

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

BTW congrats on the new blog home