Wednesday, October 8, 2008

Marsha Blackburn and the Bailout PART DEUX

Marsha has a pretty thick skull and my letters to her have not had much of an impact on her thinking about the causes of the credit meltdown.  So I am not going to write another one with a bunch of facts since she has no interest in facts.  I mentioned in my very first post  titled "Marsha Blackburn and the Bailout"  that the seminal event of the current crisis was the 2004 rule change by the SEC that allowed investment banks to leverage their balance sheets and thereafter finance the expansion of the subprime mortgage originators like New Century and Ameriquest, to name just a few.  I just read a NYT article that had a good account  about this very issue from October 2, 2008. The Reckoning - Agency’s ’04 Rule Let Banks Pile Up New Debt - Series -

No matter how many facts I throw at Marsha over the past three weeks her staff comes back with the same statements about the Community Reinvestment Act of 1977.  So maybe no fact can penetrate that thick skull conditioned to ignore any information inconsistent with her ideological beliefs, which she still clings to, about freeing business from government regulation and her solution is to dismantle the Community Reinvestment program and get rid of Fannie and Freddie or privatize them.  

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