New GOP Video Blames Dems for Wall St. Collapse

Posted by Steven Rosenfeld at 8:00 AM on September 28, 2008.

A popular YouTube video blames congressional Democrats and Barrack Obama for the Wall Street meltdown, saying they backed the Community Reinvestment Act that the video alleges forced banks to make sub-prime loans. Moreover, the video says John McCain sought to regulate the mortgage monster years ago.

As of Sunday morning, the video had 560,000 hits.

The CRA sought to ensure banks loan money to sectors of society shunned by traditional lenders. However, the banks affected by this legislation -- community banks and neighborhood lenders -- were not the corporate investments banks that led Wall Street's frenzy of irresponsible lending and packaging those loans into new securities sold to investors.

The video also handily omits is that everyone who had a stake in the housing bubble -- banks, mortgage brokers, real estate agents, appraisers -- all went crazy pushing these loans and home sales to make fortunes, and Wall Street treated these loans as hot potatoes - handing them off as soon as possible to other lenders, or hiding them in securities that were packaged to mask problem loans.

In essence, this is another lie that seeks to absolve regulation-hating Republicans and corporate titans from their contribution to the financial crisis.

According to the blog Kstreetcafe.com, the video was being promoted by Republicans such as South Carolina Senator Jim DeMint.

You can expect we will be hearing a lot more along this line of attack in coming days and weeks.

Tagged as: video, obama, mccain, subprime crisis, community reinvestment ac