Economic what if

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Even though they were promised (falsely) that they could afford it. The housing market was presented as a self inflating, self sustaining expanding balloon.

The lure of easy money is very hard to resist. Ponzi built his fortune on this weakness. As for me, I go by the axiom: if it sounds too good to be true, it is too good to be true. There is no money tree and there never was.

ruveyn

I would imagine that things wouldn't be tremendously different. Being president means trying to have an ongoing popularity contest. This means staying in the center to a great extent.

No, the Community Reinvestment Act is not the reason for the financial crisis.

The culprit is deregulation. Fraud became OK. People were selling things that were supposed to make money out of money. One scheme was to chop mortgages into little pieces and create securities out of them. They needed raw material - more mortgages and people willing to keep paying even if they could no longer really do so instead of walking away. This is how they came to offer these things to people with less money than before - a demand for more mortgages and they decided that these people were less likely to walk away. So they decided to offer these mortgages, it was not the Community Reinvestment Act that forced them. The Community Reinvestment Act was designed to take care of a serious problem - red-lining that contributed to a serious urban blight problem. As you can see, the Bronx doesn't look quite so bad now.

Why do people blame the Community Reinvestment Act? Partly, it's for partisan reasons. Also, recently there's been a cult of Capitalism expressing deep fervour. They claim Capitalism is perfect and that all problems are caused by distortions resulting from government intervention. There's also this sense that certain kinds of people don't deserve certain things, and often times race factors into that. There's even this conspiracy theory that claims that ACORN twisted the arms of the banks to force them to lend to unworthy people... and this is more proof that ACORN is a cancer that must be expunged... not only destroying the electoral system, they claim, but also the financial system itself, and some have suggested that this crisis is engineered to force socialism/progressivism down people's throats... Glenn Beck in particular does this.