LittleDavid, I didn’t say CRA forced the banks but rather incentivized/encouraged them to make risky loans. Freddie Mac and Fannie Mae, both govt sponsored institutions, pushed for low income loans to increase the percentage of home ownership in the country and meet CRA goals. Of course the Iraq war, govt waste and the Federal Reserve didn’t help our current condition either, so you’re right its not all CRA’s fault.

Your deposits in banks (up to a limit) are safe because of the Federal Deposit Insurance Corporation (FDIC) and not because of enforcement of contracts. One way out of a contract is to file for bankruptcy, and that is what banks were doing back during the Great Depression depriving even small depositors of their money.

As for the “investors we hire” being smart enough: it is difficult for even the smartest people to figure out what he good investments are when information is withheld from them. Look at the Madoff Wall Street fraud as a recent example.

Blaming the Community Reinvestment Act (which only prohibited redlining) for the mortgage meltdown is BS. The act did not force anyone to give loans to bad credit risks. It only prohibited not giving loans to people with good credit who just happened to live in the wrong neighborhood.

Yes, and that is why I said the govt does have a role in enforcing contracts

2. do you enjoy investing in stocks of companies that have to provide information to shareholders – rather than hiding bad news from the people that own their company?

I only directly invest in companies I understand well and have proven they will be in business long term. Day traders that are making a trade a minute without understanding the business they are putting their money into are taking a high risk. That being said, companies that want you to invest in them have to provide information to the investors truthfully. There is a difference between not mentioning bad news and lying about it. The investors we hire need to smart enough to ask the right questions and perform the research before they put the money in. That’s what we pay them for.

3. do you own your home? Prior to the initiation of FHA loans home ownership in this nation was less than 20%

Yes, I own two homes. While home ownership has many advantages, artificially increasing the percentage is exactly how we arrived into our banking crisis.

Blaming deregulation of the banks and the Free Market for the current economic crisis is flat out wrong. The govt intervened where it should not have and through the Community Reinvestment Act incentivized banks to give out loans to people with bad credit with little to no documentation because there was no risk involved. The govt socialized the risk and privatized the profits. That is not Free Market! What did you think was going to happen? Alternatively, Capital One made money on high-risk individuals during the same time because they carefully vetted who and how much credit they gave.

4. do you desire a stable market?
Of course. Do you think the market performance should be based on companies performance or the Federal Reserve bank?

While I hope that the GOP isn’t pounded too badly, as we do need some kind of an opposition, I think we can already see where this is going to go.

Amit – before your overly critique our bastardization of the free market you should ask yourself:
1. do you appreciate knowing that the money you have deposited in your bank is safe?
2. do you enjoy investing in stocks of companies that have to provide information to shareholders – rather than hiding bad news from the people that own their company?
3. do you own your home? Prior to the initiation of FHA loans home ownership in this nation was less than 20%
4. do you desire a stable market?

There are litterally dozens of ways that our government, and others, have used the market to create wealth while also trying to stabilize catastrophic events – if anything the deregulation of the banking industry in the late 90s, early 00s – to a more “free market” approach is the most recent counter-argument for your stated desire to have a pure free market. After all, in a free market only those with wealth and power have the knowledge to trade and gain wealth, the rest of us are just the peons upon which that wealth is built.

while Hoeft is correct in saying many Republicans were against the banking bailout, they lost their backbone because McCain came out in strong support for it and just weeks before the election the GOP preferred to show unity than principle. guess what? they paid for it.

Honestly, I should be more thankful, on a daily basis the GOP is helping to justify my choice of political party.

Reality? Life?

Us middle class voters have more votes then you white collar types.

We called out the calvary for Wall Street. Is it wrong to sound the trumpet only because those rescued might have some sweat on their collar?

Reality? Life?

The Unions are the ones who refuse to change one line of their precious contracts but want the bailout anyway from the people they’ve tried to defeat.

I’m not convinced that agreeing to that is “best for America.”

Didn’t the Democrats agree to hand over the loot to Wall Street?

The idea that is supposed to be running through Republicans’ heads is what is best for America, not who coughs up the dough for their election campaigns.