interesting background on the home loan crisis

[tomturbomatic]

From Friday's (05/23/08) NYT editorial page by Adam Cohen Editorial Observer

What Ever Happened to the Good Kind of State' Rights

In February, the day after his infamous encounter at Washington's Mayflower Hotel, Eliot Spitzer, then governor of New York, published a remarkable opinion piece in The Washington Post.

He wrote that several years earlier, state attoneys general noticed a spike in predatory lending that the federal government was doing nothing about. When the states tried to rein in abusive mortgage lenders, the #### administration finally did something. The Office of the Comptroller of the Currency issued rules nullifying state predatory lending laws over the objection of all 50 state banking superintendents.

The clampdown, which paved the way for the subprime mortgage crisis, was done by "pre-mption," a little-understood doctrine that allows the federal government to wipe away state laws.

 

[conate]

this is why I cannot...

....understand why everyone wants EVERYTHING federalized.

Huh?

 

[tomturbomatic]

I don't think that it is a question of wanting everything federalized. It's a matter of having regulations to protect the citizens. The states had the regulations against predataory lending practices and could have regulated the lending themselves, but a very anti-consumer bunch of people in the executive and legislatiave branches wiped out the protections that the states could have provided their citizens. No one heard anything about this when it happened which shows the danger of having uninformed citizens in a democracy; it won't stay a democracy for long. Thomas Jefferson said that a free press was essential to a democracy. When people control large blocs of media, the people controlling the media decide what they want people who depend on the media to know.