Some of you may have seen reference to a study by Traiger & Hinckley by liberals-democrats trying to deflect attention away from the fact that the liberal affordable housing laws were the catalyst to the recession of 2008-2009 (+?). Some go so far as to say the study proves that the affordable housing laws had nothing to do with the economic downturn. Unfortunately these same people appear to just be "grasping" to engage in a debate to defend liberal government intrusion and only give the report a cursory review and do not research more explicit facts, such as:
(1)The "study" has not been published by any economics/financial journal, so without peer review one must read such "white papers" with an open mind concerning its reliability.
(2)Traiger & Hinckley is a law firm, what exactly are their economics credentials? This law firm works for banks by providing them counceling on "fair lending" to obey the affordable housing laws and anti-discrimination laws. This is a conflict of interest: write a paper saying the CRA is just fine and dandy, and get paid by clients who must meet CRA laws that provide the client base to the legal firm.
(3)The study does not indicate if "CRA banks" have a higher foreclosure rate than banks that did not have branches in CRA "assessment areas". I wonder why?
(4)The study talks about "high cost loans". But a high-cost-loan is not the same thing as a subprime loan. A high-cost-loan as defined in the Home Ownership and Equity Protection Act of 1994 is only a small fraction of total subprime loans. Why did the legal firm only focus on high-cost-loans and not all subprime loans? The answer appears obvious, the results would have negated the biased conclusion of the study.
(5)The study focuses on things as obscure as a relationship between foreclosure rates on high-cost-loans with concentration of bank branches. This is a subtle sign of "grasping" for ways to deflect the attention away from the damning facts.
The Traiger & Hinckley study does not relieve the democrats of the blame for creating the catalysts for this recession: the affordable housing laws, the creation of Fannie Mae and Freddie Mac, and the resistance to regulating Fannie and Freddie.
No comments:
Post a Comment