Wake Up, America

By INVESTOR'S BUSINESS DAILY Posted Monday, October 06, 2008 4:20 PM PT

A nation that doesn't know history is destined to repeat its serious mistakes. People swayed by carefully crafted political propaganda relentlessly repeated and effectively delivered can easily lose their freedom and way of life.

How many times have you been told by soaring, almost hypnotic oratory that "the direct causes of our financial crisis and subprime real estate loan mess were the greedy banks, big corporations and the failed economic policies of George Bush"?
It's common to blame the one in power. This time, however, it's 100% wrong.
Every American, young or old, must be told who was really behind the subprime loan disaster that threw our economy off track and injured the good people who lost their homes — like those now boarded up in Cleveland and other major cities — plus the millions of other citizens hurt by yet another failed Big Government-run program gone awry.
In 1977, Jimmy Carter and a Democrat Congress created the Community Reinvestment Act mandating that banks make more housing loans to lower-income and inner-city borrowers. It was for a well-intended social cause and even appeared to work in the 1980s.
But in 1995, President Clinton imposed even tougher regulations that forced banks to make dramatically more subprime loans to previously unqualified people with lower credit scores in higher-risk areas.
Government regulators rated banks by how well they performed in meeting these strict new CRA obligations. Failure to comply meant stiff penalties and limits on mergers, acquisitions and expansion.
Big Government forced the lowering of long-proven safe-lending standards. Most of the more than $1 trillion of new subprime CRA loans had adjustable rates. Many required no documentation of the borrower's income and little or no down payment.

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