A wee bit of wonkery

On WTOP this morning, some nutjob from the Washington Times said the current fiscal crisis is the fault of overregulation, specifically the Community Reinvestment Act of 1977.

A primer:

The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses. It has been subjected to important regulatory revisions.

Now, explain to me, Mr. Nutjob, how did a law to prohibit financial institutions from "redlining" force Wall Street whiz kids to create sophisticated credit default swaps and leverage themselves out of business? That's (CRA is, according to Mr. Nutjob) a magic bullet with an incredibly slow velocity, taking fully 31 years to pierce the heart of global finance. No less a personage than the estimable Warren Buffet criticizes these pieces of hokum as "financial weapons of mass destruction". But, again, Mr. Nutjob says it's not the whiz kids and their FWMDs, it's the poor folks who used CRA to get a house, that are to blame for this mess.

But that's not the point of this post. The point is when I pointed all this out to my wife, who was driving me to work, she asked why I don't do political work instead of political armchair quarterbacking.

Good question.

I holler at the TV a lot. Maybe one day I'll be on TV hollering instead. I dig this wonkery stuff.