Here We Go Again

History repeating itself?  First, banks are accused of discrimination against minorities in their lending practices. Then, the government forces banks to lower their lending standards so more minorities can buy a house. A real estate bubble ensues. The bubble bursts when, quite predictably, many of these loans default. Then banks are accused of predatory lending for doing what the government told them to do. Banks return to sounder credit standards. These standards mean that fewer minorities get loans. The government then goes after banks for discriminatory lending practices.

One could almost forgive government folks not knowing the economic lessons of, say, the Coolidge administration. But we haven't even dug out of the mess that this kind of intervention created the last time it was tried.

DOJ Begins Bank Witch Hunt