[lbo-talk] Mortgage crisis caused by ACORN?!

pbond at mail.ngo.za pbond at mail.ngo.za
Sun Apr 6 19:31:50 PDT 2008


-----Original message----- From: Eric Romsted eromsted at verizon.net
> On another message board I was reading, someone claimed that the financial
> crisis in the housing market was really caused by community groups forcing
> banks to lend to high-risk homeowners in the name of overcoming racial
> redlining...
> Anyone know anything about the claims being made or have an intelligent
> response?

If I go down memory lane, I think of this explanation as absurd, because the Community Reinvestment Act began and remains toothless (my initial post-college job to repay student loans was as the first person hired by the Fed to enforce the CRA, from 1983-85; and I then helped community groups and trade unions file dozens of CRA protests in the mid-1980s, and was the author of the first successful CRA protest, against Continental Illinois in 1988).

For the nitwit Texan who wrote this article, and for those blaming Greenspan's loose, deregulatory credit philospophy, a dose of Simon Kuznets on real estate would be good. He and, later, David Harvey (in The Urbanization of Capital) set out the case for real estate cycles over time and space, as a structural force more powerful than even Greenspan's agency.



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