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[source]

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Ratings Robbers

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Republicans Destroyed Economy

Immobility

David Callahan has a great article, The Income Mobility Myth.

• The majority of the new jobs created during the presidencies of Bill Clinton and George W. Bush were low-wage positions with no benefits.
• Today, about a third of poor families with children include a parent who is working full-time.
• The conservative mobility narrative trumpets the wealthy as "job creators" and agents of opportunity. But that story is exactly backwards in some respects. Corporations and the wealthy have embraced a set of strategies for improving the bottom line that have spelled downward mobility for many workers. For example, when a company moves its back office accounting work overseas, executives and shareholders in that firm may get a nice return as profits go up. But a bunch of college grads lose their jobs.
• African-Americans and Latino households lost over half their median net worth during the most recent boom and bust - even as the Wall Street insiders who invented the subprime securitization machine and capitalized predatory lending outfits got unbelievably rich.

Go read the entire article.

The Banker, In The Office, With The CDO

Republicans are still trying to revise history, as witnessed by John Fund on Real Time With Bill Maher last evening, by claiming the government (largely through Fannie Mae, Freddie Mac, and CRA) is primarily responsible for our Great Recession.

As I have previously noted:

Yet Ned Gramlich, of the Federal Reserve, found, "Banks have made many low- and moderate-income mortgages to fulfill their CRA obligations, they have found fault rates pleasantly low, and they generally charge low mortgage rates. Thirty years later, CRA has become very good business." Russel Kroszner, also of the Federal Reserve, states, "Contrary to the assertions of critics, the evidence does not support the view that the CRA contributed in any substantial way to the crisis in the subprime mortgage market."

Eric Alterman and George Zornick reveal, "In the 15 most populous metropolitan areas, 84.3 percent of the subprime loans in 2006 were made by financial institutions not governed by CRA."

The Journal Sentinel even notes, in the article, "The federal law [CRA] applied only to depository institutions, not private, unregulated mortgage lenders."

As Paul Krugman explained, "The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act."

"The CRA applies only to banks and savings institutions. It does not apply to credit unions, independent mortgage companies, or investment banks," details Ellen Seidman.

Neil Bhutta and Glenn B. Canner discovered, "The small share of subprime lending in 2005 and 2006 that can be linked to the CRA suggests it is very unlikely the CRA could have played a substantial role in the subprime crisis."

For Further Reading:

The Community Reinvestment Act (CRA) nor Fannie Mae and Freddie Mac are responsible for the current financial crisis.
11 Lies Conservatives Tell To Avoid Blaming Wall-Street for the Financial Crisis
Myths and Falsehoods About Purported Link Between Affordable Housing Initiatives and the Financial Crisis
CRA: The facts
CRA Had Nothing to Do With The Subprime Crisis
Misunderstanding the Credit and Housing Crises