Chicagoan Jonathan Hoenig, who runs Capitalistpig Asset Management, is a frequent guest on conservative outlets like Fox News, as well as numerous financial networks. He's previously burnished his reputation as a hardcore right-winger by urging a military strike on North Korea in order to boost the stock market and arguing that the economy's ability to "thrive" depended on the execution of convicted September 11 mastermind
Zacarias Moussaoui. Now he's on the national airwaves spreading the bogus claim that the Community Reinvestment Act (CRA) is a root cause of the current financial crisis.
Here's his plan for how to deal with the meltdown, as explained during a recent appearance on Bill O'Reilly's radio show (as captured by Media Matters):
HOENIG: Let the bad actors fail, let bad banks fail, kick deadbeats out of their homes, get rid of the Community Reinvestment Act that makes banks give loans to bad risks, no more easy money from the Fed, no more bailouts for anybody, and no Fannie, Freddie ...
Media Matters provides a great rebuttal to the idea that the CRA is to blame for the current situation. For more, check out Adam's post from earlier this week in which he explains why the act is worth preserving.
matthew (not verified) on Sat, 10/04/2008 - 12:22
The CRA did not force Moodys, S&P etc to rate junk paper as Triple AAA!!!
The CRA did not force banks to make "Interest Only" loans!!!
The CRA did not force banks to NOT VERIFY income and credit history!!!!
The CRA did not force investment banks to repackage and sell these risky mortgages as safe investments!!!
The CRA did not force banks to make "No Money Down" mortgages!!!
In fact, 80% of all subprime loans were not subject to the CRA. Countrywide is a perfect example. They were not a FDIC bank and were therefore not subject to the CRA
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