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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Tuesday, April 08, 2008

How 'Community Organizers' (like Obama) Created the Subprime Crisis

Jerry Bowyer writes:
I wrote to you previously (Meet Barry Obama, 'Fair Housing' Lawyer) about the Community Reinvestment Act, a law which compels banks to make home loans in minority neighborhoods to people who were poor credit risks. Although the CRA is well known in the financial industry, political pundits and reporters often know very little about finance and so have missed this extremely important aspect of the story. Ignorance of economics doesn't help much either. The political class seems blissfully unaware of the concept of unintended consequences which is the idea that laws which are designed to make our lives better often make our lives worse.

On a recent edition of Kudlow and Company, I debated Vermont Senator Bernie Sanders on precisely this point. He seemed not only to disagree with my point that if congress compels banks to make Subprime loans, then they share responsibility for the crisis that results when the borrowers default; he seemed not to understand it. For him once we identify the target group as bankers, nothing else matters - they're bad and he's good, no more reasoning is necessary.


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