As economists and the Wall Street Journal have noted, the Community Reinvestment Act was an important ingredient of the financial crisis, by pressuring banks to make risky loans to people in low-income, predominantly-minority neighborhoods, even if such loans were unlikely to be repaid. Now those loans, which were economically unjustifiable, are defaulting, resulting in pain for both banks and borrowers alike.
So what does the New York Times recommend as a solution? To “strengthen” and expand the Community Reinvestment Act’s provisions “requiring banks to lend, invest and open branches in low- and moderate-income areas,” by making it even more onerous and inflicting it on even more lenders! As if we don’t already have enough risky subprime mortgage loans fueling the mortgage crisis. The mindset of a Manhattan liberal is truly beyond belief. If the definition of insanity is doing the same thing over and over again (even after it has proved unsuccessful), and expecting a different result, then the editors of the New York Times must be insane.
The New York Times is getting criticism for its role 75 years ago in concealing Stalin’s “terror famine,” in which the Soviet dictator deliberately starved to death six to ten million Ukrainians, in an artificially-engineered famine that the New York Times denied was occurring, even as its Russia correspondent, Walter Duranty, was writing glowing reports about Russian harvests, and receiving expensive gifts from the Soviet government. (The Times has refused to return the Pulitzer prize that Duranty and it received for their misleading coverage of life in the Soviet Union).