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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.Tell Me a Story: Discussing the Role of CRA Initiatives in the Mortgage Crisis
Investors Business Daily this week continued playing the role of drummer boy in the relentless assault from the right on Fannie Mae, Freddie Mac and the Community Reinvestment Act as the chief culprits of the financial crisis.
In a March 3 editorial, IBD dismisses the conclusions of the bipartisan Financial Crisis Inquiry Commission that found no reason to lay the blame of the collapse of the housing markets on CRA. The editorial even perversely characterizes CRA as “redlining” legislation, demonstrating shameful disregard for the history of housing and race in America in the 20th century.
IBD’s piece is part of a meme that has taken root by way of Rush Limbaugh (“CRA was used by ACORN and their allies to wreck the mortgage market.”) and American Enterprise Institute’s Peter Wallison (“CRA …Fannie Mae and Freddie Mac ...are to blame for the financial crisis”) and brazen, over-the-line bloggers whose blame-minorities language on CRA is not fit to quote here.
OK, I can’t resist citing a few samples, at least some from writers whose not-so-subtle references give you a small, bitter taste of the more offensive, unquotable posts. For example, there are references in “investment” and “business” blogs, where the bigotry is sanitized (barely) by the use of sentences such as: “CRA’s primary purpose was to force banks and other lenders to give mortgage loans to un-creditworthy borrowers (many of whom were minorities).”
Or this: “CRA pushed by radical organizations such as Barack Obama's ACORN and Jesse Jackson's Rainbow/PUSH Coalition as a way to achieve the Marxist dream of wealth re-distribution.”
Good gracious, in the case of that last one it seems George Wallace and Joe McCarthy had a baby and became a 21st century blogger.
On one level, the whole thing is a good example of how the importance of a narrative in public debate cannot be overemphasized. We all like a good story. It’s a propensity baked into our DNA.
Narrative is not the same as story. Narrative is how the story is told. It makes it easier to take something complex and make it more easily digestible. For example, life is a story. You are born, you live and you die. What happens in between is complicated. It can’t all be told unless the storyteller makes the choice of a narrative.
That’s why the “CRA caused the crisis” narrative is so useful to slanted pundits who want to explain something to us that’s just not that simple. In the political and policy arenas, the most successful narratives are the ones that lend themselves to quick quotations and short attention spans (of both the audience and the storyteller). Often, and sadly, some conveniently connect to the heart and head via veiled symbolism and prejudices.
Here’s the rub: once the narrative is chosen, and it sticks, it is very hard to discuss the issue outside the framework of the established narrative. Take a look at an interview online this week with Kevin Hall, national economics correspondent for the McClatchy newspaper chain. Hall goes after the myth that Fannie, Freddie and CRA were to blame.
Here’s Hall’s take:
“There's a perception that has been fueled by the right that somehow Fannie and Freddie are behind this whole collapse because of the Community Reinvestment Act and the forcing [of] banks to lend to minorities. The truth could be nothing farther than that, and we've written stories about that and proved it, yet it seems to take on, you know, this national lore as if it just has to be true.”
He continued: “The CRA loans are the best-performing loans. The subprime loans—in fact, the majority of subprime loans weren't given to minorities; they were given to white folks who were buying second homes and vacation homes and flipping homes.”
Granted, Hall’s sound bite itself is a bit of an oversimplication and, what could be argued, reverse racism. Maybe in an environment where others continue to fan the flame, it may sometimes prove irresistible to fight fire with fire.
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This email was sent to you by:
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YOUR MESSAGE HERE
Tell Me a Story: Discussing the Role of CRA Initiatives in the Mortgage Crisis
Investors Business Daily this week continued playing the role of drummer boy in the relentless assault from the right on Fannie Mae, Freddie Mac and the Community Reinvestment Act as the chief culprits of the financial crisis.
In a March 3 editorial, IBD dismisses the conclusions of the bipartisan Financial Crisis Inquiry Commission that found no reason to lay the blame of the collapse of the housing markets on CRA. The editorial even perversely characterizes CRA as “redlining” legislation, demonstrating shameful disregard for the history of housing and race in America in the 20th century.
IBD’s piece is part of a meme that has taken root by way of Rush Limbaugh (“CRA was used by ACORN and their allies to wreck the mortgage market.”) and American Enterprise Institute’s Peter Wallison (“CRA …Fannie Mae and Freddie Mac ...are to blame for the financial crisis”) and brazen, over-the-line bloggers whose blame-minorities language on CRA is not fit to quote here.
OK, I can’t resist citing a few samples, at least some from writers whose not-so-subtle references give you a small, bitter taste of the more offensive, unquotable posts. For example, there are references in “investment” and “business” blogs, where the bigotry is sanitized (barely) by the use of sentences such as: “CRA’s primary purpose was to force banks and other lenders to give mortgage loans to un-creditworthy borrowers (many of whom were minorities).”
Or this: “CRA pushed by radical organizations such as Barack Obama's ACORN and Jesse Jackson's Rainbow/PUSH Coalition as a way to achieve the Marxist dream of wealth re-distribution.”
Good gracious, in the case of that last one it seems George Wallace and Joe McCarthy had a baby and became a 21st century blogger.
On one level, the whole thing is a good example of how the importance of a narrative in public debate cannot be overemphasized. We all like a good story. It’s a propensity baked into our DNA.
Narrative is not the same as story. Narrative is how the story is told. It makes it easier to take something complex and make it more easily digestible. For example, life is a story. You are born, you live and you die. What happens in between is complicated. It can’t all be told unless the storyteller makes the choice of a narrative.
That’s why the “CRA caused the crisis” narrative is so useful to slanted pundits who want to explain something to us that’s just not that simple. In the political and policy arenas, the most successful narratives are the ones that lend themselves to quick quotations and short attention spans (of both the audience and the storyteller). Often, and sadly, some conveniently connect to the heart and head via veiled symbolism and prejudices.
Here’s the rub: once the narrative is chosen, and it sticks, it is very hard to discuss the issue outside the framework of the established narrative. Take a look at an interview online this week with Kevin Hall, national economics correspondent for the McClatchy newspaper chain. Hall goes after the myth that Fannie, Freddie and CRA were to blame.
Here’s Hall’s take:
“There's a perception that has been fueled by the right that somehow Fannie and Freddie are behind this whole collapse because of the Community Reinvestment Act and the forcing [of] banks to lend to minorities. The truth could be nothing farther than that, and we've written stories about that and proved it, yet it seems to take on, you know, this national lore as if it just has to be true.”
He continued: “The CRA loans are the best-performing loans. The subprime loans—in fact, the majority of subprime loans weren't given to minorities; they were given to white folks who were buying second homes and vacation homes and flipping homes.”
Granted, Hall’s sound bite itself is a bit of an oversimplication and, what could be argued, reverse racism. Maybe in an environment where others continue to fan the flame, it may sometimes prove irresistible to fight fire with fire.
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