The Community Reinvestment Act Zombie Lie

THE COMMUNITY REINVESTMENT ACT ZOMBIE LIE…. The Wall Street Journal ran yet another op-ed today claiming that home loans made “under the pressure of” the Community Reinvestment Act helped to “fuel the greatest housing bubble our nation has ever seen.”

Former House Majority Leader Dick Armey (R-Texas) recently pushed the same line. It leaves Paul Krugman with a feeling of hopelessness.

There’s a persistent delusion, on the part of many pundits, to the effect that we’re actually having a rational political discussion in this country. But we aren’t. The proposition that the Community Reinvestment Act caused all the bad stuff, because government forced helpless bankers into lending to Those People, has been refuted up, down, and sideways. The vast bulk of subprime lending came from institutions not subject to the CRA. Commercial real estate lending, which was mainly lending to rich white developers, not you-know-who, is in much worse shape than subprime home lending. Etc., etc.

But in Dick Armey’s world, in fact on the right as a whole, the affirmative-action-made-them-do-it doctrine isn’t even seen as a hypothesis. It’s just a fact, something everyone knows.

Truly, sometimes I despair.

It’s probably the single most frustrating aspect of our political discourse. The right will make an outrageous claim; the claim will be proven false; but instead of moving on to a new claim, conservatives just continue to repeat the debunked point.

It’s the crowd that creates their own reality.