More On The Community Reinvestment Act As A Selective Filter
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A reader responds to my new article on the subtle but pervasive way in which the Community Reinvestment Act changed the culture of mortgage lending in America.

... my husband was working at [Famous Old] Bank at that time and was dealing with the pressures of CRA mandates during merger talks with other banks. He saw the kinds of promises [Famous Old Bank] had to make to get approval and he actually had to work with bullies at ACORN to get the job done. As I am much more to the right and more aware than he was, I pointed out that this would eventually skew the banking system in a very corrupt and unprofitable ways just to go along with the new government rules. As a banker, he just saw what he had to do to accomplish the ends.
This is like a car that can only go straight or turn left, not right. You'd initially think that if you could drive it straight down a highway no problem, but each little random shock aims it farther to the left with no way to go back to the right. And so it eventually ends up in the ditch on the left. (Interestingly, to get the banks out of the ditich, the federal government ignored the CRA process last fall in approving emergency buy-ups of broke banks.)
Ultimately, the failure of the banking system can be narrowed down to one set of core beliefs that nearly everyone in our society ascribes to: all groups are equal. There is no reason for them to believe, despite the mounds and mounds of evidence, that this premise is fatally flawed. So the Carter, Bush, Clinton, and Bush administrations operating under this false premise with near religious certainty saw no problem in pushing the banks in the direction of lending to peoples and groups who could or would not conform to the standard values of this society. This religious belief in the equality of groups is still enshrined in our value system. I don't know what it will take to change this — but rest assured it will result in greater calamities ...
You can see how the CRA, along so much else, filters the culture. By wielding a veto over bank acquisitions, it announces, "You can lend money, invest, and give away money as you see fit, as long as you want to be the hunted, not the hunter in the mergers & acquisition game." Combine that with the constant patter of discrimination lawsuits where any mention coming up in discovery of bank executives mentioning the different default rates of the races would likely lead to an instant settlement, and, combined with the education and media systems, you can see how we bred an entire generation of Kool-Aid drinkers.
Meanwhile, the capitalist were "doing well by doing good", the government could further their social engineering objectives, and the masses of Americans were kept in ignorance by a vile and corrupt media, even though they are left holding the bill and will pay the price for a fallen America.

Thanks for writing about these important subjects. It seems as if very few people have the knowledge and ability to do so (or the courage).

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