NO POSSIBILITY, HUH BARNEY?

"Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis. Among the Congressional 'leaders' invited to the White House to devise a bailout 'solution' are the very people who have for years created the risks that have now come home to roost. Five years ago, Barney Frank vouched for the 'soundness' of Fannie Mae and Freddie Mac, and said 'I do not see' any 'possibility of serious financial losses to the treasury.'"

- Columnist Thomas Sowell

BLAME PEANUT MAN

"The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and 'redlining' because urban blacks were being denied mortgages at a higher rate than suburban whites.

"The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. In 1977 Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of 'low-income, minority, and distressed neighborhoods.'

"In 1995, under President Clinton, the law was made even more stringent. Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. . . . All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices."

- Columnist Jeff Jacoby

BLAME BUBBA

"The Community Reinvestment Act was pushed hard by Bill Clinton, although it originated under Jimmy Carter. . . . As you can imagine, wonderful things happen when the government strong arms corporations as to how they should spend their money and, better yet, how they should assess the qualifications of home buyers. So the country's biggest buyers of mortgages were pressured into lowering the qualifications of applicants, in order to increase the percentage of poor that got mortgages. By 2006, 30% of all mortgages went to people who in any other circumstances wouldn't qualify.

"...The best thing that can emerge from the current financial crisis is the realization that the government needs to stop directing economic decision making. In a sense, the government is putting out a fire it started when it both created the CRA and assessed lending institutions by how well they were doing in response to the program. When Clinton decided, in his usual arrogance, that he knew better than the market how banks should lend money, the seeds were sown for the current financial disaster."

- Former House Majority Leader Dick Armey

REPEAL CRA

"Repeal the Clinton-era regulations encouraging reckless lending practices under the Community Reinvestment Act (CRA). In the 1990s, the Clinton Administration used the CRA as a club to pressure lenders into giving loans to marginally-qualified borrowers. The government should not be in the business of pushing lenders into making loans they would not make in a free market."

- Grover Norquist, Americans for Tax Reform, 9/30/08

THE ROOT CAUSE

"(Today's financial) crisis can trace its roots to Bill Clinton's signature on legislation making it easier for minority constituents with bad credit to obtain mortgages. In 1995, he had his Treasury Secretary, Robert Rubin, rewrite the lending rules for the Community Reinvestment Act, opening the flood gates of mortgage lending to unqualified borrowers. This legislation, in effect, applied affirmative action to the lending industry, which is to say that the current crisis is NOT a 'free market failure' but the result of socially engineered financial policy by the central government."

- Columnist Mark Alexander