There’s been a lot of stink in the air about a group called ACORN, which, prior to this election, most people had never heard of. This is the sort of thing that’s rife with innuendo and lies, so let’s set the record straight.

What is ACORN?

ACORN, the Association of Community Organizations for Reform Now, is a community-based organization that advocates for low- and moderate-income families by working on neighborhood safety, health care and other social issues. ACORN has over 350,000 members and more than 850 neighborhood chapters in over 100 cities across the United States, as well as in Argentina, Canada, Mexico, and Peru.

Oh, those evil community organizers! So what’s the stink?

More than 2,000 voter registration forms filed in northern Indiana’s Lake County by a liberal activist group this week have turned out to be bogus, election officials said Thursday.

The group — the Association of Community Organizations for Reform Now, or ACORN — already faces allegations of filing fraudulent voter registrations in Nevada and faces investigations in other states.

And in Lake County, home to the long-depressed steel town of Gary, the bipartisan Elections Board has stopped processing a stack of about 5,000 applications delivered just before the October 6 registration deadline after the first 2,100 turned out to be phony.

…

Over the past four years, a dozen states have investigated complaints of fraudulent registrations filed by ACORN. On Tuesday, Nevada authorities raided an ACORN office in Las Vegas, Nevada, where workers are accused of registering members of the Dallas Cowboys football team. And the group has become the target of Republican attacks on voter fraud, a perennial GOP issue.

OK, it sounds bad. But this issue with ACORN comes up all the time, and they’ve become something of a boogy-man. Further, while it’s alleged that some people who go out and gather the registrations are either fraudulently filling them out or having others do so, there’s never been a group wide conspiracy of election fraud alleged or proven.

Part of the problem, as Marc Ambinder points out, is that ACORN volunteers are paid, which can lead them to falsify forms in search of more money. The far larger problem, of course, is that ACORN is bound by law to turn in all collected registration forms, even those they suspect of being fraudulent. It’s up to the County Clerk to double check the forms, and weed out the bad ones. Here’s an ACORN press release:

Fact: ACORN has implemented the most sophisticated quality-control system in the voter engagement field, but in almost every state we are required to turn in ALL completed applications, even the ones we know to be problematic.

Fact: ACORN flags incomplete, problem, or suspicious cards when we turn them in, but these warnings are often ignored by election officials. Often these same officials then come back weeks or months later and accuse us of deliberately turning in phony cards.

Fact: Our canvassers are paid by the hour, not by the card, so there is NO incentive for them to falsify cards. ACORN has a zero-tolerance policy for deliberately falsifying registrations, and in the relatively rare cases where our internal quality controls have identified this happening we have fired the workers involved and turned them in to election officials and law-enforcement.

Fact: No charges have ever been brought against ACORN itself. Convictions against individual former ACORN workers have been accomplished with our full cooperation, using the evidence obtained through our quality control and verification processes.

Secondly, even if someone registers Bugs Bunny to vote, Bugs Bunny’s not gonna show up at the polls, as Ben Smith points out:

The latter is putting the names of fake voters on the rolls, something that happens primarily when organizations, like Acorn, pay contractors for new voter registrations. That can be a crime, and it messes up the voter files, but there’s virtually no evidence these imaginary people then vote in November. The current stories about Acorn don’t even allege a plan to affect the November vote.

So why is all of this in the news now? Because, despite what Ben Smith himself italicized there, the McCain camp is, in fact, alleging that.

“P.S. We’ve always known the Obama-Biden Democrats will do anything to win this November, but we didn’t know how far their allies would go. The Obama-supported, far-left group, ACORN, has been accused of voter registration fraud in a number of battleground states. Our team, through McCain-Palin Victory 2008 is working to ensure that this election is conducted fairly. With your immediate financial support, we’ll be successful. Please join our team for a fair election today. Thank you.”

And if a fundraising e-mail ain’t enough for ya, there’s Rick Davis saying it outright:

“We don’t want to see battleground states turn on ACORN,” said Rick Davis, McCain’s campaign manager. “We want to make sure not of these states are stolen.” (10/10)

Man, ACORN is so evil, it makes you wonder why McCain would attend an ACORN rally and laud them as terrific.

Here’s a photo of the event:

And the accompanying statement from Bertha Lewis, Acorn’s chief organizer:

“It has deeply saddened us to see Senator McCain abandon his historic support for ACORN and our efforts to support the goals of low-income Americans.”

”We are sure that the extremists he is trying to get into a froth will be even more excited to learn that John McCain stood shoulder to shoulder with ACORN, at an ACORN co-sponsored event, to promote immigration reform,” she said.

Oh man, we already went over this! But, you know, that was then, well over a year ago, and this is now.

The McCain campaign made a horribly wrong video:

Here’s what we quoted ABC News as saying in our piece last July:

In addition to local schools informing kindergarteners that babies do not come from the stork, the state legislation Obama supported in Illinois, which contained an “opt out” provision for parents, also envisioned teaching kindergarteners about “inappropriate touching,” according to Obama’s presidential campaign.

That’s not “teaching kids about sex before teaching them to read.” That’s teaching them not to let lecherous old men tough their no-no place in exchange for candy. That’s a good thing

What’s worse, as as Huffington Post points out, the article McCain cites in the ad is actually worse on him than it is on Obama.

What sets this ad apart is that every article save one that the McCain camp cites as being critical of Obama’s education policies either has far more derogatory things to say about McCain himself or goes on to praise the Illinois Democrat.

In the spot, the McCain campaign references a June 2008 Washington Post editorial that called Obama “elusive” on school accountability. That same editorial, however, stated that McCain “has not been forthcoming with any detailed plan.” Moreover, when the Post editorial board revisited the subject of education last month, it found that “Obama has given the issue more attention” than McCain, whose plan was “both late in coming and still a work in progress.”

Moreover, the specific “elusive” claim is in reference to a David Brooks op-ed in the New York Times that was noted by the Post. But in that piece, Brooks was far more critical of McCain. “Obama endorses many good ideas and is more specific than the McCain campaign, which hasn’t even reported for duty on education,” the Times columnist wrote.

In its press release accompanying the ad, the McCain campaign also which states that, as a legislator, Obama “hasn’t made a significant mark on education.” The same story, however, goes on to add: “Sen. Obama may have a unique perspective among the candidates seeking the presidency in 2008. As a private citizen, he led Chicago’s portion of the Annenberg Challenge school reform initiative financed by the late philanthropist Walter H. Annenberg–an experience that shaped Mr. Obama’s perspective on the critical importance of principals and teachers.”

So the ad is not only willfully disingenuous in its assertions, but the “facts” it cites are outright lies from opinion pieces over a year old. This is not the “honorable” campaign we were promised.

Did you hear Barack Obama wants to kill babies in the womb? It’s true! In the way that it’s NOT.

The issue came up during the primaries when Senator Clinton accused Obama of lacking the backbone to protect abortion rights because he voted “present” instead of “no.” What’s good for the liberal goose is good for the conservative gander, it seems, as right to life groups hit him for wanting to kill babies because he voted present.

At issue is the Born Alive Infant Protection Act, a bill in the Illinois state Senate that sought to protect against bungled abortions by requiring that a fetus that survived an abortion be defined as a person. Fearing that the legislation could be interpreted more broadly to protect fetuses that were not yet viable — thus threatening Roe v. Wade, abortion rights advocates pushed for an amendment that explicitly limited the scope of the bill to infants “born alive.”

It’s a complicated issue, spanning several years worth of bills in the Illinois State Senate. Lucky for me, The Chicago Tribune did the leg work.

The history makes it clear that Obama’s role in delaying “born-alive” legislation was minor and based on very understandable reservations of many pro abortion rights legislators in Springfield. There is simply no way to paint him as an “extremist” when multiple versions of this same legislation failed in both chambers, often over bi-partisan concerns

What does Obama have to say for himself? Check out this interview he gave to The Christian Broadcast Network.

I hate to say that people are lying, but here’s a situation where folks are lying…. What that bill was doing was trying to undermine Roe vs. Wade. By the way, we also had a bill, a law already in place in Illinois that insured life saving treatment was given to infants.

So for people to suggest that I and the Illinois medical society, so Illinois doctors were somehow in favor of withholding life saving support from an infant born alive is ridiculous. It defies commonsense and it defies imagination and for people to keep on pushing this is offensive and it’s an example of the kind of politics that we have to get beyond. It’s one thing for people to disagree with me about the issue of choice, it’s another thing for people to out and out misrepresent my positions repeatedly, even after they know that they’re wrong. And that’s what’s been happening.

So no, he doesn’t want to kill babies. He loves babies!

The McCain campaign falsely claims that Obama voted to raise income taxes on individuals earning “as little as $32,000 per year.” Hrm, let’s see…

The McCain campaign claims that Obama voted to raise income taxes on individuals who earn as little as $32,000 per year. That’s wrong.

* The resolution Obama voted for would not have increased taxes on any single taxpayer making less than $41,500 per year in total income, or any couple making less than $83,000. The $32,000 figure is approximately the taxable income of a single person making $41,500 per year, after all deductions and exclusions.

* Obama’s vote (for a non-binding budget bill) does not change the fact that his own tax plan would provide a tax cut of $502 for a non-married taxpayer earning $35,000.

But they still claim Obama will raise your taxes. Let’s take a look:

Check out Obama Tax Cut and Will Obama Cut My Taxes to see how much money you will save under Barack Obama.

A lot of us have seen some version of this image floating around. Luckily, Goon Anybody debunked it for us back in August:

Factsheet

Sportsmen

Barack Obama did not grow up hunting and fishing, but he recognizes the great conservation legacy of America’s hunters and anglers and has great respect for the passion that hunters and anglers have for their sport. Were it not for America’s hunters and anglers, including the great icons like Theodore Roosevelt and Aldo Leopold, our nation would not have the tradition of sound game management, a system of ethical, science-based game laws and an extensive public lands estate on which to pursue the sport. Obama recognizes that we must forge a broad coalition if we are to address the great conservation challenges we face. America’s hunters and anglers are a key constituency that must take an active role and have a powerful voice in this coalition.

From Factcheck:

Taking the postcard’s points in turn, the first one refers to a questionnaire his campaign filled out for a community group in Chicago when he first ran for Illinois state Senate in 1996. This isn’t the first time this candidate survey has come back to haunt him — nor is it the first time we’ve written about it. At the debate in Philadelphia last month, Obama denied that his handwriting was on the questionnaire completed for the Chicago nonprofit, Independent Voters of Illinois-Independent Precinct Organization.

He was wrong about that — his handwriting appears on a small part of the document — but he has continued to maintain that a campaign aide filled out the bulk of it, including the multipart question asking if he supported state legislation to ban assault weapons; ban manufacture, sale and possession of handguns; and require waiting periods and background checks before gun purchases. He answered “Yes” on all counts.

Obama says the answers misrepresent his position. “I have never favored an all-out ban on handguns,” he said at the Philadelphia debate.

We can’t say for sure if he did or not. We haven’t been able to find any evidence that he acted on it if he did. In the Illinois Senate, he voted for gun control, including limiting handgun purchases to one a month, but no attempts at a ban that we are aware of. And he didn’t advocate a handgun ban when he was running for U.S. Senate. Still, the reason for the answer on the questionnaire remains unclear.

He has voted on 8 different gun issues:

1, He voted on a bill to give higher penalties for using “armor piercing rounds” in a crime. (this was considered a neutral vote). (bill passed)

2,He voted for allowing persons under 17 to sue weapons manufacturers as long as it was a suit that could be won by an adult (this is labeled Vote against gun manufacturers) (amendment did not pass)

3, He voted for a trigger lock law requiring that a trigger lock be provided with every handgun transfer. Law did not apply to private sales. The law also provided immunity from liability for those that use “secure gun storage or safety device with a handgun” (this is labeled vote against gun owners) (this bill passed)

4,He voted for a change to a bill that would actually define “gross negligence or reckless conduct” in reguards to gun manufacturers (this is labeled against gun manufacturers) (this amendment was tabled and never brought up again)

5,He voted for allowing persons under 17 to sue weapons manufacturers as long as it was a suit that could be won by an adult (this is labeled Vote against gun manufacturers) (amendment did not pass) (yes they tried twice)

6,He voted for an amendment that directed the AG to take on a new job of “determining standards to decide what ammunition is capable of penetrating “body armor exemplar”. Any ammunition (handgun or rifle) that the AG determines to be ‘armor piercing’ is added to the legal list of ammunition to be ‘armor piercing’. From that point forward it would be illegal to sell that ammo. (this is listed as against gun owners) (amendment did not pass)

7, Voted against the Protection of Lawful Commerce in arms act. and I quote “this bill ends current and prevents future liability lawsuits.” Yeah you cant sue a gun manufacturer. (this is labeled Vote against gun manufacturers) (this bill passed and is now law.)

8, voted for a prohibition of any Dept. of Homeland security budget from being used to confiscate guns. that would include allocations to state and local law enforcement. (this is labeled as a vote for gun owners) (this bill passed).

There you go. All his gun votes in the Senate.

Oh and just for chuckles here are a few of Mccains “against gun oweners/manufacturer” votes.

He voted against and then for the Clinton assault weapons ban.
Co-sponsored the McCain / Lieberman Gun Show Loophole Bill (never brought to vote)
Sponsored Gun Show Loophole Closing Act of 2003 (never brought to vote)
Child Safety Lock Act of 2005 (voted against gun manufacturers)

And holy shit I just don’t really know what to say about “GIVE CRIMINALS THE RIGHT TO VOTE”

No doubt by now you have seen this video. It places blame for the current economic problems squarely at the Democrat’s feet. And while don’t know enough about economics to speak as to what the fuck is going on, we have several terrific Goons who do.

So here’s how it actually breaks down. This is going to be a gigantic wall of text, but Goon infiniteseal is working on a rebuttal video for us, to be posted here once he is done.

UPDATE: Here is the video rebuttal.

First, Goon razzledazzle lays it all out:

It’s ridiculous to blame the crisis on the or ACORN or whatever. The central thesis seems to be that the government forced lenders to give loans to risky customers, when in fact lenders chose to give loans to risky customers because there was a vast amount of profit to be made. (Reasonable people can differ on whether the CRA is good policy in principle and in practice, but that’s really besides the point here.)

It works like this:

1) The global economy was pretty good, so there’s loads of extra money sloshing around that people want to invest in something nice and safe. (It actually doubled from $36 trillion to $72 trillion between 2001 and 2007.)

2) At the same time, house prices were going up.

3) So, people decide to invest in mortgages.

4) Obviously there are lots of steps from, say, an investor in Mumbai to a homeowner in Michigan, but let’s concentrate on Wall St banks with lots of money and smaller mortgage lenders operating in communities. (Not that small necessarily, Countrywide was one, for instance.)

5) Mortgage lenders sell mortgages to wannabe homeowners. Then they sell them up the chain to Big Banks (and the investors they represent) who get the rights to the income and associated risk.

6) As things continue going nicely, Big Banks are happy to get their hands on more and more mortgages. But lenders are almost running out of people to sell houses to.

7) Fine, say the banks, who have plenty more investors who want to get in on the action. Give mortgages to more people, even those you’d usually turn down.

8 ) The lenders have a field day. Usually to get a mortgage you have to prove what money you have and what your income is. No longer! Now you can just tell the lender what you earn. Sometime later, the rules are even looser and the banks don’t even ask. (The fabled NINA, No Income No Assets loan.) And to entice people in they start giving away mortgages with very low introductory rates and all kinds of exciting offers (the fabled “predatory lending practices”) to get more and more people to sign up. Don’t forget, housing prices are still going up so lots of people are figuring they can sell the house on before the higher interest kicks in.

9) Meanwhile the banks are buying these rather dodgy mortgages by the bucketload. They mix the good and bad ones up together, whatever, who cares. Credit rating agencies reckon it’s alright, though, and give them all AAA ratings. This is partly because even if a homeowner defaults, the owners of the mortgage deal get to repossess the house and sell it at a profit. Also, who pays the credit rating agency to rate stuff? The bank with the stuff to be rated.

10) Housing bubble bursts, because that’s what bubbles do.

11) Homeowners hoping to flip their property before the higher interest rates kick in can’t sell it for what they paid for it. They’re screwed, and default. Dumber people who just magically hoped they could pay the higher interest rates coming down the line? They can’t, and default. People who didn’t read the small print in their mortgage, also screwed, and default.

12) Banks start to notice all the foreclosures. They refuse to buy the dodgiest mortgages from lenders, which is bad news for lenders as they’ve just borrowed loads of money and given out some bad mortgages and now they can’t sell them up the chain. Some lenders, therefore, go bust.

13) Obviously the fall in house prices means that the banks can’t cover their debts by selling off the property. Anyway, everyone starts to cotton on to the fact that bad stuff is going on. Investors start selling their share in the mortgages to wash their hands of them, and the price of them starts going down, so what the banks actually own in terms of capital is less and less and less.

14) Credit rating agencies start downgrading all these dodgy mixed up mortgages.

And then the rest is all Wall Street insider stuff. Banks and investment funds start writing-off assets, basically admitting that all these investments they have are worthless. Share prices go down so they can’t make as much money by potentially issuing more shares. Banks don’t know what dodgy-ass mortgages each other have and don’t want to loan each other money. But loaning each other money is what makes the whole system work, so institutions start falling over because they can’t operate without access to the loans.

For instance, Lehman Brothers ended up stuck with the crappiest mortgages (possibly because they were potentially the most profitable, possibly because they couldn’t find investors for them) and ended up losing $3 billion. Washington Mutual gave out subprime mortgages directly, and lost $8 billion. Merril Lynch lost $19.2 billion in a year. IndyMac was one of the biggest “lenders” and had $10.7bn of mortgages ready to sell up the chain, but suddenly nobody want to buy them, and they had to eat the losses when large numbers of them went into foreclosure. Countrywide had to eat losses, then their share price went down so they couldn’t raise money by issuing new shares, and then they had to admit that they were essentially including delinquent unpaid mortgage installments in their accounting as “assets” when in fact the mortgage payments would never arrive. Northern Rock, in the UK, was mostly fine but nobody would lend them money because OMG THEY DO MORTGAGES, had to get a loan from the government, which made everyone panic, triggered a run on the bank and got it nationalised. Netbank, usually a lender that would resell mortgages up the chain, tried to disguise their loans as safe, but when it was revealed they weren’t, were forced to buy them all back, and couldn’t find anyone else to buy them, driving them under.

So essentially some of the assets of some of the banks have? They’re subprime mortgages, and nobody wants to buy them or invest in them, making them worthless. If they truly are worthless, people lose confidence in the bank and the bank can’t access loans, their share prices tank, and the bank dies. (This is obviously circular in that the suspicion the bank might collapse is enough to make it collapse.) The government is planning on buying these subprime mortgages.

So there you have it.

It’s true that only a portion of bad loans had to do directly with the CRA. But you left out the part where Fannie Mae and Freddie Mac bought up all those crap mortgages largely because of political pressure.

Now Goon Blinkz0rz steps up to explain why it’s not Freddie Mac and Fannie Mae’s fault:

Basically, Fannie Mae and Freddie Mac failing are the consequences of the fallout from the subprime mortgage crisis rather than the cause. This crisis was caused by deregulation (Gramm-Leach-Bliley) that allowed banks to have investment, commercial banking, and insurance under one roof. This led to 2 separate phenomenons. First, it allowed the banking industry to create banks that were too big to fail. The sheer amount of liquid assets controlled by these huge banks makes it impossible to allow that much money in the market do be taken down by illiquid assets such as CDOs and mortgage-backed securities suddenly losing values.

Second, it allowed banks to lend money (in the form of mortgages specifically due to the rising value of homes) and then turn around and sell the mortgage-backed securities to other investment houses. The issue becomes more complicated when you have the smaller street-lenders taking out massive loans to offer mortgages and then turning around and selling these loans as MBS’s or CBOs to pay off their initial loans. When the value of houses dropped, borrowers who either couldn’t afford their mortgages* or who depended on the equity in their home to take out a home equity loan to stave off default ended up defaulting. The mortgages that were securitized dropped in value leading to financial institutions (and more specifically investment houses) losing a significant amount of money and consequently being unable to fulfill their debts. This is exactly what happened to Fannie Mae and Freddie Mac. That’s why, aside from the sheer amount of assets present in the market decreasing significantly, banks are so wary about lending other banks money.

*You have to keep in mind that the reason these people were able to take out these mortgages they couldn’t afford is because the lenders were increasingly more competitive with each other in order to make the most profit. This led to nina and ninja loans being actual services offered. For lenders, it didn’t matter whether the borrower could pay their mortgage because once the mortgage was securitized and sold, it was out of the hands of the lender.

I asked for some clarification, because I am a dunderhead. Again, Goon Blinkz0rz comes to the rescue:

The basic gist to refuting these articles is to note that both of these articles discuss a symptom of the explosion of mortgage backed securities trading. Because initially these securities were seen as a safe investment, GSEs like Fannie Mae and Freddie Mac bought and sold them without reservation. Because they represented a pretty decent amount of the actual assets the GSEs own, and the concern about them devaluing was pretty low, the GSEs treated them as almost equivalent to liquid assets even though they were, in reality, pretty shadily set up.

When the housing market went bust, the CDOs that were made up of these securities devalued like crazy. Foreclosures devalued them even further. The GSEs were left with CDOs and mortgage backed securities that were, up until recently, worth trillions of dollars, but now are worth next to nothing.

Basically the greed that caused street lenders and commercial banking institutions to push NINA and NINJA mortgages on people who couldn’t afford them and then turn around and sell them as securities while depending on an exploding housing market to keep the securities’ values pumped is what caused the failures of Fannie Mae and Freddie Mac, not the Clinton administration suggesting that Frannie and Freddie insure and issue mortgages to lower income home buyers or the CRA in 1977.

Goon Fascist Funk helps me out, too:

The NYT article distinguishes between the moderate- and low-income mortgages that Clinton and Fannie Mae stockholders advocated, and the subprime mortgages which, according to that very article, Fannie Mae itself pushed for under pressure from banks, savings & loans, and mortgage lenders, not the government.

Someone feel free to correct me if I’m wrong, but I think a failure to differentiate between low-to-moderate income mortgages and subprime mortgages is one of the chief errors of the “blame Clinton” crowd.

With us so far? Good. Goon Cav gets in to the nitty-gritty:

Mortgage defaults didn’t cause this crisis. Waves of personal bankruptcies and loan defaults aren’t anything new. The problem is that financial institutions won’t extend credit to each other, not just because some are carrying bad mortgages, but because their assets may consist principally of mortgages whose only known value was set by the company that owns the mortgage.

Every company has to have assets equal to their operating needs. A manufacturer has to have enough assets that are liquid (can be easily converted to cash) to buy materials and pay their employees. Commercial banks hold customers deposits and must have enough liquid asses to accommodate the maximum foreseeable withdrawals.

Financial banks provide working capital for business startups and expansions by underwriting stocks and bonds - they give the company the capital and then sell the stocks and bonds to recoup their investment. They’ve got to have liquid assets sufficient to cover stocks and bonds between their issuance and sale. Insurers who often insure stocks, bonds and business ventures have to have sufficient liquid assets to cover claims.

When one company can do all three types of financial business, a crisis in any of them can drain off liquid assets and cause a companywide failure. When the different types of financial institutions are intermingled, a crisis in one quickly becomes a crisis in all.

This was one of the primary causes of the bank runs that sparked the Great Depression. To insulate the different types of financial businesses, Congress passed the Glass-Steagall Act in 1933, which prohibited doing business in more then one financial arena.

In 1999, at the behest of financial institutions that wanted a piece of every pie, Phil Gramm rammed the Gramm-Leach-Bliley Act (GLBA) through a Republican controlled Congress. This repealed the Glass-Steagall firewall and opened the door to industry wide failure, again.

Now that he’d built the coffin, Gramm nailed down the lid. In late 2000, as the Clinton administration was becoming the Bush administration, Congress was rushing to pass the annual Omnibus Budget Reconciliation Act to move budget account surpluses to cover shortfalls. At the last minute, Gramm slipped in a 262 page amendment called the Commodity Futures Modernization Act of 2000 (CFMA). The dense and obtusely technical language was passed as part of the budget bill without debate.

This act almost totally deregulated derivatives, aka futures. Now each company that held derivatives, like subprime mortgages, was free to determine their value when calculating the value of their liquid assets, with little or no government verification. Any company that wanted to overextend itself could simply overvalue its derivatives and hope they didn’t get caught in a cash crunch.

They did. Companies who can’t meet their cash obligations go belly up. Normally, a company caught in a cash crunch borrows cash on short terms with its less liquid assets as collateral. But no one knows which mortgage assets are likely to fail and which ones’ value is overstated. So nobody loans and everything crashes.

The Community Reinvestment Act (CRA) of 1977 prohibited redlining, effectively saying that, if your bank or loan company’s market is Onondaga County, you can’t just loan money in Skaneateles and Manlius and decline all applications from the city. It didn’t require lenders to issue bad loans; pure greed did that.

CRA was passed in 1977. GLBA and CFMA were passed in 1999 and 2000. Things started to come apart in 2005. If CRA caused this, it took three decades to do it.

The CRA isn’t responsible for the over-inflation of house prices or banks bundling mortgages and selling them, that’s from the Gramm-Leach-Bliley Act of 1999 that basically repealed Glass Steagall.

What people who buy this shit don’t understand is that if the government was “forcing” these banks to give money to people (which doesn’t make sense but that’s what they keep saying the CRA is supposed to do) then houses would be massively UNDER-valued because banks would be fighting to give the least amount of money they could.

Instead, the repeal of Glass-Steagall allowed banks to basically sell a mortgage to whomever, bundle it up with a bunch of other mortgages, then sell that bundle as an investment that would “mature” and be worth more than what the buyer paid for it. For example, if the bank bundled up 5 $200,000 mortgages and sold it for $750,000, the buyer of the bundle would basically be assuming to make $250,000 on it when the homeowners finished paying up, which they failed to do, devaluing all those pieces of paper they’d been trading back and forth for the last decade. The bank doesn’t care, though, because they make their money back and a tidy profit off the short-term sale, it was the long-term owners of those mortgage bundles that got fucked.

The guy who made the video figures if he just throws enough shit at the audience with a “GRRRRR DEMOCRATS!” message that people will get confused and just assume it’s the Democrats’ fault. Information overload. But it’s pretty simple: Phil Gramm, McCain’s chief economic advisor, also behind the Savings & Loans scandal of the 80’s (which resulted in the biggest bank failure in history up until WaMu last week), repealed Glass-Steagall in 1999 which allowed banks to consolidate commercial and investment holdings and go wild on short-term profit by selling mortgages as investments. They overvalued every thing they had, sold it all, and then when people couldn’t pay up, every one freaked out because no one knew what anything was worth anymore, every body wrote off their investments as losses, stopped lending to each other, and then the institutions collapsed.

So you want sources, you say? Here is the best possible explanation as to the whole mess, an hour long episode of This American Life from NPR. Take the time and listen to it, and educate yourself.