Debunking the "Blame CRA!!" Myth

Conservatives are desperate for the current economic crisis to be someone's fault, anyone's fault, other than the unbridles excesses of the marketplace. Ideally, if big government could somehow be blamed...if poor people, if minorities could somehoe be blamed...maybe even the biggest bogeyman of them all, Bill Clinton, could be blamed?
Got it! Community Reinvestment Act (CRA)!! We can even blame this one on Jimmy Carter, that liberal pantywaist!
Jimmy Carter signed CRA into law in 1977 to help promote homeownership for broader swaths of society, and to dismantle the prejudicial redlining practices of banks that made borrowing almost impossible for the wrong color or class of borrower. Conservatives would like you to swallow whole the fallacy that this law, and the engines of Freddie Mac and Fannie Mae, are to blame for the collapse of the housing market and the resultant woes on Wall Street.
Don't buy it.
Read this article on McClatchy. Federal Reserve Board stats illuminate the complicity of private lending as opposed to quasi-publics. For instance, more than 80% of subprime loans to low- and moderate-income borrowers in 2006 were made by private firms. Community Reinvestment is not the bugaboo.
This conservative myth, aside from satisfying the right wing desire for people of color and limited means to be the villain in any story, serves a deeper purpose. It is a bald attempt to demonize federal regulation. The claim is that if heavily regulated entities like Freddie and Fannie went under, there should be less regulation! Government interference is the problem!And oh, yeah, let's take a look at who's been failing and who has survived in this disaster. Commercial banks that are regulated under CRA have endured, while non-bank lenders and investment banks who make the same loans but are not regulated, have been failing left and right. Go look where Ameriquest ended up.
What is the answer? Obviously, vigorous federal oversight. Punishment of those who gamed the system. And investment in the vast majority of Americans working hard every day at the bottom half of our economic divide. The theoretical conservative creed is that money is better off in the hands of people than government. Then why push $700 billion into the hands of the few at the cost to the many? I've long believed that income redistribution is fine with the right wing as long as it only goes in one direction.