Thursday, October 14, 2010

The Sad Revelation that Business Man Ron Johnson’s not to Swift.

He’s dumb. He knows his business basically and nothing else, just what he reads and hears on Fox News, the network that gave him the idea to run in the first place.

jsonline: Johnson told Journal Sentinel reporters that the seeds of the collapse began in 1977 with passage of the Community Reinvestment Act. Decades after its passage, the federal law that helped low-income and disadvantaged people get loans to buy their own homes continues to be hotly debated.

Hotly debated and wrong. But the media encourages frivolous debates between fact and fiction. If you can believe that the “poor banking industry” was forced to give bad loans to free loading first time home buyers, then you’re as big an idiot as Ron Johnson. You’ll notice Johnson’s caveat “I guess” in the following statement:

In Johnson's view, the law "started forcing banks to make loans to people who couldn't afford to pay them back . . . " Asked if the banks were forced to lend to people who couldn't afford it, Johnson said: "They threatened to bring the Department of Justice in to, I guess, to prosecute banks that would be accused of redlining. Not making loans to people in certain areas."

Johnson then ran down the predatory lending practices that I assume he must consider just part of doing home loans:

…if I make the loan, I can get all of the origination fees on it, I can make a lot of money and, by the way, I don't have to incur any of the risk. You don't throw out all constraints … So what that did, that was the cause of the housing bubble."

Tea party and Republican voters love that BS, the part that blames middle and lower class families for gaming the system. Facts, who cares…

Abdur Chowdhury, chair of the economics department at Marquette University, said "You had the Community Reinvestment Act, which made it easier to buy homes and then you also had other regulations that were relaxed in terms of banking institutions investing in the mortgage market."

"If you asked me what happened in the housing market, I would say interest rates were low, it was lax regulation, and everyone was thinking the increase in housing prices in 2002 and 2003 would continue. Banks were giving loans to people who didn't have enough income."

A new study in the October edition of the American Sociological Review concluded that predatory lending aimed at racially segregated neighborhoods led to mass foreclosures that added fuel to the housing crisis. The study's authors said poorer minority areas became a focus of predatory lending with the growth of mortgage-backed securities.

Johnson just might be our fantasy league Senator, battling against lazy Americans scamming banks, and the other unknown forces still not incorporated.

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