2008 mortgage crisis/Clinton/notes

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2012-12-02 Much discussion here on the question of whether CRA loans led to the foreclosure crisis because CRA loans had a high default rate; the answer continues to appear to be "no".

Earlier Analysis

This page is in need of updating. Some of these questions have probably been answered by the rebuttals above in the main article; check and annotate.
  1. What's not clear is why anyone thinks that this would cause a crisis 8 years later, rather than sooner. Also, why such a huge crisis, and so suddenly?
    • Has anyone done a survey of recent mortgage defaults to see if any significant percentage of them seem to be a result of the action described?
    • For that matter, has any kind of survey *at all* been done of those defaults, rather than blaming first and aiming later?
  2. How much of a role has the subprime mortgage crisis played in the current situation? My understanding is that the dollar volume involved in the derivatives market (especially credit default swaps) versus mortgages is somewhat as Lake Superior to a farm pond.
    • What about the debt incurred by the largely unnecessary expenditures in Iraq? Just a quick Google comes up with slightly over half a trillion dollars ($559 billion) spent there -- about 70% of the proposed bailout. (This figure would probably not be diminished much by subtracting out the amount Bush claimed it was going to cost, which I suppose one might argue we had all agreed was a worthwhile expenditure and therefore shouldn't be counted, so go ahead and subtract it out if you can find it.)
    • Just looking at the subprime mortgage question: it is possible that this was a bad call by Clinton. However:
      1. Clinton was trying to do a good thing, and as I understand it the indications at the time (aside from what the AEI said) were that it would not be harmful -- unlike many things done by Bush, where everyone (except his circle of misadvisors) was telling him to stop. If Clinton made a mistake on this one, it seems to me he can easily be forgiven because it was a reasonable mistake to make and he got so many other things right. (Like, say, Osama bin Laden being a threat.)
      2. For every default on a loan to a "minority or low income consumer", how many have remained current? (Presumably 9 years isn't enough to expect that very many would be paid off... but perhaps there is a sample of 5- and 10-year loans among those made at the time, where we could actually answer the question of net loss/profit on that group of loans. Is anyone looking into this?)

I'd really like to see some discussion of these questions before the neocons go happily shouting everywhere that Clinton is to blame for the meltdown... but I doubt that will happen, because the only truth they're interested in is whatever they can convince the overwhelmingly misinformed public to believe. --Woozle 23:18, 2 October 2008 (UTC)