How to Prevent the Next Financial Crisis

Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate

Everyone is running around trying to figure out what legislation we need to keep us from having a financial meltdown ever again. The proposed legislation runs to thousands of pages. This is totally unnecessary.

We do not need new laws, just get rid of those that caused the current mess. We Only need to do the following:

  1. Repeal The Community Reinvestment Act (CRA), a Federal Law forcing commercial banks to lend in lower income neighborhoods without charging more for the risk. In other words, forcing banks to lose money on loans.
  2. Repeal the Home Mortgage Disclosure Act of 1975, a law requiring banks to collect racial data on mortgage applicants which gave Liberal extortion groups like ACORN the ammunition they needed to force banks to be more "fair" (to use Obama's favorite word) to blacks and other minority poor in granting mortgages the poor could not afford and should never have entertained.
  3. Close down Fannie and Freddie. If private firms will not package loans because they are toxic, then having government-sponsored enterprises buying and securitizing them does not make them wise investments.
  4. Stop helping the poor - it only makes them more poor. The War on Poverty only made things worse, it discouraged blacks from obtaining education and job skills. Today, after almost 45 years of supposedly helping the poor, more children (17.4%) in America today live below the poverty line than in 1969 (14%).

There are Americans who were brought up to believe that the epitome of moral behavior consists of supporting programs to help the poor, even if those programs actually do not really help the poor at all. What is important is to be able to announce to the world, "I am a Liberal - I care for the poor - I am a decent, compassionate human being."

I say, "F*ck your compassion, take your boot off the neck of the poor in this country." Anyone with even a modicum, a shred, a sliver of decency would feel responsible enough to read the statistics and realize that all those programs are failures and stop them. But no. They have to keep pretending they care and so they keep expanding the failed programs even more.

Despite all the lessons we have learned from the toxic loan crisis, there are legislators today asking for even more money to help people get mortgages they cannot afford. Hey, it was in all the papers, doesn't anyone read?

### End of my article ###

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