This was posted on the math blog of Maria Miller, the woman who created Math Mammoth. It helped *me* to understand this whole “credit crisis” better and I found it very interesting. I thought some of you might be interested in this for yourself or your older children.m4givenParticipant
Thanks Rene for this link. It does explain it well.HazelMember
I really like this! Thanks
There’s a problem with this. There was not one mention of the Community Reinvestment Act, originally passed in 1977 to increase mortgages to low-income families. The involvement by the gov’t, in this Act’s various reincarnations, caused a major impact on the housing market. Many Congreessman have a utopian vision of things; that it’s “not fair” for some people to own a home and others not. The promotion that this ‘crisis’ was caused solely from Wall St. is absolutely wrong.
Remember ACORN; from the Presidential Race? They were involved in bullying banks in some areas of the country. They literally would go to these banks and protest, bringing people from the community to apply for loans in mass, then if the banks turned these loans down, they would threaten discrimination suits.
Here’s an one article on CRA (there are others, it’s dry but necessary reading):
This comment is very telling:
Bob McTeer, president of the Dallas Federal Reserve Bank from 1991 to 2004, said “There was a lot of pressure from Congress and generally everywhere to make homeownership affordable for poor and low-income people. Some mortgages were made that would not have ordinarily been made.” He also said “When a bank made a decision to purchase mortgaged-backed securities, they would somehow determine if some of them were in zip codes covered by the CRA, and therefore they could get CRA credit.”
There’s much more to this situation. The gov’t doesn’t want to take any responsibility for their involvement, manipulating the free market and contributing to this problem; they just want us all to believe it was a failure in Capitalism using their favorite buzz word “greed” and promote their class warfare; it’s just not true. Has there been greed; sure, since the beginning of time. But this video, though informative on one level, promoted what the gov’t would like for us to think about this situation and keep our attention off of them.
Also, housing prices/values, haven’t always gone up in history, as the video mentioned, and it’s interesting to notice through time and the influences:
Not trying to be argumentative; there’s just more to it, and it’s so important.
Very good points, Rachel – thank you for sharing. I agree that they are an important part of the overall picture.
ITA with Rachel. I was surprised recently when we all watched It’s A Wonderful Life- the “bad guy”, Potter, doesn’t want to loan money to the poor. He says they should save up for a house, not be given loans they can’t afford. Oh my goodness! I had never noticed that before.
This all started with Jimmy Carter’s administration and Obama is another Carter. Gov’t still thinks that debt will somehow make the poor richer. When will they admit that debt just makes the poor even poorer?ReneParticipant
Rachel, LOL, I was going to come back and post a different video and somehow totally missed that you posted a Glenn Beck video.
Have you seen this one?
Look Behind The Curtain
I totally agree with you, btw, but still thought the first video was good from a purely economic standpoint. I did not understand how all this mortgage stuff worked.
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