Wednesday, September 2, 2009
Thomas Sowell - The Housing Boom and Bust
Comment: When some conservatives noted that the Community Reinvestment Act had some factor in the housing collapse, liberal commentators responded by saying that the CRA program and those that participated in it had very little default rates. While this is true, the point that is missed by liberal critics is that the CRA created a culture outside of the CRA program where "affordable" housing activists via progressive politicians effectively influenced financial regulators into pressuring banks to make more loans to less-than-creditworthy borrowers than they would normally be willing to risk. The political epitome of this is Mr. Barney Frank. He constantly pushed public policy to address a "housing affordibilty problem." The results of his work is the housing bubble and collapse.