The root source of the financial crisis is found in the Community Reinvestment Act, which was passed under Jimmy Carter and reinvigorated under Bill and Hillary Clinton. Put simply, it forced banks and other financial institutions to lend to unqualified candidates for home and other loans. The classic loan under the scheme was the "NINJA" loan, which stood for "no income, no job, no access," and folks with none of those things were able to get loans they clearly could not afford. But they did fit the profile of people Democrats are always trying to socially engineer their way up in American life. Banks then resold the loans and pulled other manuevers to try to spread out their risk, and of course when those "no job, no income" people started defaulting because---duh---they couldn't pay, the whole system blew apart.
This is what happens when liberals attempt social engineering in the private economy. And yet, the Obama adminstration is doing it all over the place, from the health care to the auto to the energy industries. And now, it appears they want to do it again in the financial industry.....by forcing the banks to loan to unqualified people.
Here's the story from Politico regarding a trip VP Biden took to Cleveland this week:
A top banking source emails POLITICO's Ben White about Tuesday's meeting between Vice President Biden and some bankers in Cleveland:
"Administration asked banks to increase their small business lending by committing to a three year goal. ... Most banks have already increased goals and are doing all they can to make loans since they are losing money with historically high deposits. ...
"The problem is lack of demand from credit worthy businesses worried about high unemployment rate and higher taxes. Not to mention a total collapse in real estate market. Administration sent VP Biden who arrived 90 minutes late and berating banks to lend more since they were 'bailed' out under TARP. Bankers left scratching their heads hoping the administration does not expect them to lend to unqualified borrowers."
Berating the banks. Bankers left scratching their heads. Seriously: with the Obama/Biden Team, thebankers should have known better. Of course this was coming. Team Obama just can't help itself.