No it's too much regulation obviously. Just like the Love Canal, if they had just left that one to the free market, the pollution wouldn't have happened.

The Exxon / Mobil merger didn't happen for 10 years after the spill. If the market was intended to 'take care' of Exxon by forcing it to be purchased, that failed.

Well that's a given man. What pisses me off is all of those damn Federal regulations that forced honest mortgage lenders to give home loans to people who couldn't afford them even when they knew they shouldn't. Those poor mortgage brokers.

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.

That doesn't sound to me like they were told to lie. And I'm sorry but it is widely thought of as a LACK of federal regulation as being the cause so sorry if I'm snarky but your logic doesn't pan out..

Yeah, the Federal government has nothing to do with it, you're right.

Here, let me copy and paste since you're too busy being snarky to click a link.

And you're way oversimplifying this, which is why DP and I have been picking on you. I have a friend who was given waaaaaaay too many loans during the buble, and loans that his income didn't merit. He wasn't some "low income" person who couldn't have qualified for a loan but got one so some mortgage broker could fill a quota. In fact, he is a real estate agent who works very closely with mortgage brokers. So he was fucked by his own industry.

I seriously doubt that my friend was an isolated example or an exception to the rule. It wasn't like these stupid loans were given out because of some government directive. Mortgage brokers all over the country fudged numbers to give loans to people who couldn't afford them, and they did it out of greed, and because no one was enforcing a reasonable standard of lending.

A federal regulation...the CRA...for the last 33 years...has been materially encouraging banks to give loans to people who would not otherwise qualify without said Federal regulation.

Investing Insights
Community Reinvestment Act had nothing to do with subprime crisis
Posted by: Aaron Pressman on September 29, 2008

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).

Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.

Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt. (Barry Ritholtz had an excellent and more comprehensive survey of how Washington contributed to the crisis in this week’s Barron’s.)

There’s plenty more good reading on the CRA and the subprime crisis out in the blogosphere. Ellen Seidman, who headed the Office of Thrift Supervision in the late 90s, has written several fact-filled posts about the CRA controversey, including one just last week. University of Oregon professor and economist Mark Thoma has also defended the CRA on his blog. I also learned something from a post back in April by Robert Gordon, a senior fellow at the Center for American Progress, which ends with this ditty:


It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA — or any federal regulator. Law didn’t make them lend. The profit motive did. And that is not political correctness. It is correctness.

My 2 points were:
The Valdez spill wasn't big enough to sink Exxon (and thanks to lobbyists and our justice system they just settled, what, 4 years ago?).
You're ignoring the bankruptcy of Texaco.

hey look, I can find an economist to back up my position too!!!

http://www.businessinsider.com/the-cra- ... ide-2009-6

Ahh I see what ya did there.

Here I was thinking that finding facts to back up my opinion (like you asked for) was what you wanted.

Silly me. Just keep drinking the Kool Aid.

Here I was thinking that finding facts to back up my opinion (like you asked for) was what you wanted.

I never asked you for anything.

Since you guys have the answers, educate me. What was the cause and contributing factors to the housing bubble?

But this is all getting off topic. The point is I think almost anyone who looks at the BP situation rationally would agree that the logical response is newer, tighter regulations on the oil industry (ones that are actually enforced would be nice too). Is there anyone here who has read through this thread besides Crosscheck who thinks the free market will make sure something like this oil leak never happens again?

But this is all getting off topic. The point is I think almost anyone who looks at the BP situation rationally would agree that the logical response is newer, tighter regulations on the oil industry (ones that are actually enforced would be nice too). Is there anyone here who has read through this thread besides Crosscheck who thinks the free market will make sure something like this oil leak never happens again?

The point I need to grasp is that if at anytime the possibility is brought up that conservatives or the GOP has made, is making or will make a mistake I need to just go smack my face into a wall instead of reading your rationalizations. Wave those pom poms proudly my friend.