Posted by
On the Right on Tuesday, July 22, 2008 3:57:12 AM
In one of those front-page editorials disguised as "news" stories,
the New York Times blames "the lucrative lending practices"...
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Blaming the lenders is the party line of congressional Democrats as
well. What we need is more government regulation of lenders, they say,
to protect the innocent borrowers from "predatory" lending practices.
Before going further down that road, it may be useful to look back at what got us into this mess in the first place.
It was not that many years ago when there was moral outrage ringing
throughout the media because lenders were reluctant to lend in certain
neighborhoods and because banks did not approve mortgage loan
applications from blacks as often as they approved mortgage loan
applications from whites.
All this was an opening salvo in a campaign to get Congress to pass
laws forcing lenders to lend to people they would not otherwise lend to
and in places where they would not otherwise put their money.
Shocking as it may be to some, lenders are in the business of making
money, and they don't much care whose money it is, so long as they get
paid. Politicians, on the other hand, are in the business of getting
votes, and they don't much care whose votes it is — or what they have
to say or do in order to get those votes.
It was government intervention in the financial markets, which is
now supposed to save the situation, that created the problem in the
first place.
Laws and regulations pressured lending institutions to lend to
people that they were not lending to, given the economic realities.
The Community Reinvestment Act forced them to lend in places where
they didn't want to send money, and where neither they nor politicians
wanted to walk.
Now that this whole situation has blown up in everybody's face, the
government intervention that brought on this disaster in is supposed to
save the day.
Politics is largely the process of taking credit and putting the
blame on others — regardless of what the facts may be. Politicians get
away with this to the extent that we gullibly accept their words and
look to them as political messiahs.