Monthly Archives: October 2011

Guess what? Government housing policy did NOT create the subprime crisis:

A couple of economists at the Federal Reserve actually did the research, and what do you know?  The government policy of supporting home ownership didn’t encourage the unworthy peasants to borrow beyond their means, as the Republicans would like to tell the story today.

It was actually the slimy mortgage lenders who gave undocumented mortgages to anyone who was breathing.  They did it because they could sell them off to unscrupulous Wall Street investment houses.  They in turn bought them because they could buy AAA ratings from the ratings agencies for the bundles they made from them.

And then the Wall Street could slice and dice the bundles and sell them to unsuspecting pension funds and charitable organizations looking for safe yields to replace the bonds they could no longer invest in because they were only yielding paltry interest rates.  Why?  Because Alan Greenspan kept interest rates so low in the early 2000’s that charities couldn’t meet their obligations to pay out 5% of their assets and still grow with the safe investments they were used to investing in.

So let’s not drink the Kool-Aid we’re being sold.  Here it is from the horse’s mouth- first the Abstract, then the link to the entire research paper:


A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.

We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA’s effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.

We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.












Canada is the first country to sign the Ottawa Protocol on Anti-Semitism!

Canada first to sign antisemitism protocol
Breaking News
Tuesday, 20 September 2011
Fittingly, Canada is the first country to sign the Ottawa Protocol on combating antisemitism.The document was drafted in Ottawa at the November 2010 Conference on Combating Antisemitism and was signed last week by Citizenship, Immigration and Multiculturalism Minister Jason Kenney and Foreign Affairs Minister John Baird.It represents the outgrowth of a series of conferences by the Inter-Parliamentary Coalition to Combat Anti-Semitism (IC-CA), which co-hosted the Ottawa conference along with the government of Canada last year.

The protocol contains a series of measures that seek to end hateful propaganda online and in places such as university campuses and distinguishes valid criticism of Israel from antisemitism.

“Criticism of Israel similar to that levelled against any other country cannot be regarded as antisemitic,” the protocol states. “But singling Israel out for selective condemnation and opprobrium – let alone denying its right to exist or seeking its destruction – is discriminatory and hateful, and not saying so is dishonest.”

Jewish community leaders and groups hailed the government’s signing of the document last week.

The Centre for Israel and Jewish Affairs (CIJA) commended the signing. In a statement, CIJA CEO Shimon Fogel called the document “groundbreaking” in its findings and recommendations.

The Ottawa Protocol “will serve as the basis of the renewed international effort against antisemitism. The fact that this important document was crafted in Ottawa is further testimony to Canada’s leadership role in this vital global battle,” he said.

Fogel added: “We are hopeful that the recommendations of the Ottawa Protocol will not only be adopted by other countries, but will serve as a model for countering all forms of hatred and discrimination.”

At the signing, Kenney said Canada is fighting anti-Semitism in a number of ways.

“The Ottawa Protocol complements what Canada is already doing to combat hatred and discrimination, including antisemitism,” he said. “We are a member of the Task Force for International Co-operation on Holocaust Education, Remembrance and Research. Here at home, we have launched programs to promote integration and social cohesion of Canadians from all backgrounds.”

The Canadian Friends of Simon Wiesenthal Centre  (FSWC) also praised the government for becoming the docu-ment’s first official signatory.

In a statement, Avi Benlolo, president and CEO said his organization applauded the government’s “principled leadership” on the issue.

“With the exceptional and pernicious rise of antisemitism throughout the world, the Ottawa Protocol sets an exam-ple for other nations to follow,” Benlolo said. “This announcement is particularly meaningful as Jews around the world watch in sadness as the racist Durban III conference in New York provides yet one more international forum for attacking the Jewish people, while here in Canada we read about another antisemitic inci-dent in which a swastika was carved on an Edmonton hill.”

To read the full text of the Ottawa Protocol, go to