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I put this together from several sources. But some good general articles

http://www.clevelandfed.org/re...
http://www.theatlantic.com/bus...
http://www.bls.gov/cex/2010/st...
http://visualeconomics.creditl...

You can Google and find a ton on this.

You would think the banks would have an obligation to protect investors' money.

Banks were securitizing the bad loans and selling them off immediately.
They protected their investors money, it's the poor assholes who bought those fraudulently rated AAA bundled loans that weren't protected.

The people who want to blame this on government housing policy or sub-prime borrowers are the financial equivalent of climate change deniers (yes, I'm talking about the GP).
All of the official reports blame widespread fraud on the part of lenders.
Anyone who disagrees with this is in an alternate universe.

This was written in 2009 by the Federal Reserve Bank of Cleveland:
Ten Myths about Subprime Mortgages
http://www.clevelandfed.org/research/commentary/2009/0509.cfm

This is the Senate Oversigh Report from 2011:
Wall Street and the Financial Crisis: Anatomy of a Financial Collapse (646 pages PDF)
http://www.hsgac.senate.gov//imo/media/doc/Financial_Crisis/FinancialCrisisReport.pdf

This is the Congressional Report from 2011:
The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States
http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf (663 pages PDF)

They lay out in extensively footnoted detail who was responsible and who wasn't, but I'll save you the trouble of reading them:
The collapse was caused by weak regulatory controls, conflicts of interest in the banking sector, lending fraud, credit ratings agencies' fraud, massive failures in risk management by the financial sector, and insufficient capital reserves.

These financial deniers need to cite legitimate research that supports their position.
At the bare minimum, supporting documents would need to lay out (with numbers) what deserves the blame.
Because the official reports say things like

Research indicates only 6% of high-cost loansâ"a proxy for subprime loansâ"had any connection to the [1977 CRA] law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.

The facts are out there, if only you'd look past the media noise machines.

it's pretty clear to me that most (or all?) farming jobs can be automated with a combination of current machinery, sensors and some reliable software.

During the 20th century the proportion of the total workforce employed in agriculture declined from 34% to 3%, so your prediction is already about 90% fulfilled!

Funny, those 'out of control' unions have no negative impact on productivity. Of the top 10 states with highest union participation, only 3 score below average in productivity growth (Alaska, Nevada, and Michigan).

Sources: Wikipedia and the Federal Reserve Bank of Cleveland. True, the Cleveland numbers only go up to 2004, but I assume that union participation has not changed significantly in the intervening years. If anyone has more recent numbers showing otherwise, I'd like to see them.

Mart

So, assuming you study this stuff: please explain why "deregulate, lower taxes, and eliminate minimum wage bad"?

Deregulation - do you really need me to provide examples of why unfettered deregulation is bad? The banking example I provided above shows that simplifying regulation but ensuring enforcement can be much more effective than just straight deregulation.
Lower taxes - I'm assuming that you like civilization and the benefits provided to you by your government - things like roads, sewage treatment, fire and police services, courts of law etc.? These things generally cost money and since society as a whole benefits from having them, it makes sense that they should be provided by the government, as otherwise you'll be creating huge social unrest when people who cannot afford to pay for the services run by private companies decide they've had enough. Taxes pay for these services.
Eliminating minimum wage - here's a decent pdf that sums it up in clear language: http://www.clevelandfed.org/research/commentary/2007/0501.pdf

Pretty much everything I said applies to our situation in the US. For example, my parents at one time had their house paid off. They used the equity in this house to upgrade to a larger property further out of town (sort of as a nice retirement spot since there is a nice pond they share with neighbors and a place for horses). They did this almost 10 years ago. Once the housing bubble hit, it wiped out most of the excess equity they had from using their previous house to upgrade, and now they owe basically what their house is worth on the mortgage minus some from their payments over the years. I don't disagree that investments are important for some things, nor that the person investing deserves something for it, I am just saying that the argument "the wealthy being able to invest for start ups is beneficial for the economy" is over-exaggerated. First off, the wealthy aren't even investing due to fear and even if it that weren't true the things they tend to invest in are not small businesses. Having an economy where only the wealthy can invest in anything, and everyone else can't even save to invest to get wealthy ends up with something like feudalism. I.e. you owe them their investment plus interest and/or part of your company, they do no work in the company but you must send a portion of profits their way. Meanwhile, they exert control over you through their investment. This isn't bad in itself until this becomes the only way to start a business. Since you can't even start a business without the investments of the wealthy, the wealthy end up owning a piece of everything. You could possibly buy out their stake over time, but this of course is at the discretion of both parties (of course depending on how their contract is set up). Essentially, the distribution of wealth is causing a middle class capable of small business entrepreneurship to shrink and have to go to the wealthy class whenever they try to start anything. I say entrepreneurship is shrinking because it is. Most people are becoming employees rather than small business owners because they can't find investors, and they can't save (at least enough in a short enough period of time). http://www.clevelandfed.org/research/commentary/2011/2011-04.cfm

the community reinvestment farce is indeed a misstep by the government, and was wrong, and contributed to the 2008 meltdown, absolutely.

Actually, the CRA had little-to-nothing to do with it. There are a lot of arguments for why it had little to do with it, too, the most important being:
1. The institutions engaged in most of the sub-prime lending weren't CRA-regulated banks, they were mortgage brokers (DiTech, Ameriquest Mtg, Countrywide, etc) who weren't subject to the CRA.
2. The default rates of CRA-qualified loans were comparable to the default rates of similar loans that weren't CRA-qualified.
But hey, don't trust me on this, trust the Cleveland Federal Reserve (that's just the easiest to read of the many economic studies on this)

The reason the CRA came up early had a lot to do with wanting to blame government rather than banks for the financial crisis, and a bit to do with wanting to blame poor black folks in the inner cities around the country rather than rich white folks in New York City. But the claim is basically hogwash.

The parent is correct, but a bit terse. I thought I'd elaborate a bit:

"Federal Reserve Board data shows that:

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."

- http://www.mcclatchydc.com/251/story/53802.html

The stats don't back up the idea that any public institution or law bears the brunt of the responsibility for problematic lending.

It also doesn't make much sense. Take the fingers pointed at the CRA. It didn't force banks to make risky loans. They could deny an application based on income, credit rating, or any other relevant factors. What it *did* force them to avoid was "red-lining": denying loans based on the current living location (used as a proxy for the applicant's race). A person's race and living location might have some correlation with risk of defaulting, but as we all know here on slashdot, correlation is not causation, and a responsible financial institution would deal with the more directly relevant information: an individual's income/asset information and their credit history.

Here's some other links:

http://www.ptmortgage.com/blog/2008/10/01/pointing-fingers-was-it-cra-and-minority-lending-that-caused-the-mortgage-mess/
http://debatebothsides.com/showthread.php?t=73500
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
http://www.frbsf.org/news/speeches/2008/0331.html
http://www.ccc.unc.edu/news/news.021809.php
http://www.clevelandfed.org/research/Commentary/2000/1100.htm
http://www.treas.gov/press/releases/ls564.htm

Wikipedia also has a summary.

Some citations for those interested:
http://www.ccc.unc.edu/news/news.021809.php
http://www.clevelandfed.org/research/Commentary/2000/1100.htm
http://www.treas.gov/press/releases/ls564.htm

All are very clear that the CRA had little to nothing to do with the subprime mortgage foreclosures.

The idea that the CRA caused this mess has been debunked repeatedly by every study done on the subject. If you want some real sources on this, I'd suggest studies put out by a university, the Federal Reserve, or the US Treasury Department.

Oh, yeah! _Those_ are impartial sources.

First off, your source is not appropriate for a serious argument. It's an op/ed by a columnist with accusations of plagiarism to his name, not a news article.

The loans that caused the vast majority of the current mess were issued by mortgage brokers (firms like Countrywide Financial, Ameriquest Mortgage, and Ditech), not banks. Brokers are not held to the CRA standards. The idea that the CRA caused this mess has been debunked repeatedly by every study done on the subject. If you want some real sources on this, I'd suggest studies put out by a university, the Federal Reserve, or the US Treasury Department.

Some real reasons behind the arguments about the CRA:
1. Banks have hated the CRA for a long time. They were trying to dodge it or get rid of it back in the 1990's as well.
2. Conservatives oppose most government regulation on principle.
3. By blaming the CRA, it absolved the bankers of any role in creating the problem.
4. It creates an image of a foreclosed subprime homes is owned by a black person in a bad urban neighborhood. In reality, the areas with the most subprime loans are in suburbs near LA, San Diego, Denver, and Miami. In short, racism.

>>The Community Reinvestment Act had nothing to do with the subprime crisis

Don't believe the hype. I've read that article before (or a close enough cousin to it), and found it to be not just wrong, but deceptively so.

To wit, it's points are:
1) The CRA is a well-respected law that's been on the books since 1977.
That's a whopper. What it doesn't say is that it was a limited program until the Clinton administration rewrote and expanded it in 1995. (http://en.wikipedia.org/wiki/Community_Reinvestment_Act)

Claiming that it's been "on the books since 1977" is deceptive. The CRA as we know it was started in 1995 under the Clinton Administration.

2) CRA doesn't require loans to be made, to minorities or anyone else.
Hugely deceptive. Banks make loans, and the CRA requires loan making to follow diversity targets (including neighborhood, income, and race) which include forcing banks to make loans to low-income populations that they would prefer to avoid. This means the CRA forces banks to make bad loans.

(I mean, sure, technically, a bank could just choose not to make any loans at all, but then the CRA would be shutting down banks from lending entirely, which would be worse. I think that's how they're trying to weasel out of that claim.)

The CRA requires banks to write reports on how they're achieving diversity targets with their loans, and exposes banks to lawsuits if they do not meet diversity targets. Let me rephrase: If banks do not make loans to poor people they would not otherwise give a loan to, they will be sued by someone -- like Obama, who sued Citibank for not issuing enough bad loans.

3) CRA only applies to federally-regulated banks and thrifts whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC).
Sure. Maybe a zillion non-CRA bad loans were made. What difference does it make?

This does not excuse the CRA forcing banks to make bad loans.

4) Federally-regulated banks, which are covered by CRA, have operated under more supervision, and therefore the failure rate for mortgages made by those institutions has been significantly lower
Deceptive again. What difference does bad loans made by others make?

Even before the housing meltdown, CRA loans had much higher default rates, and lower profitability than other loans. Here's a report from the Fed in 2000: http://www.clevelandfed.org/research/Commentary/2000/1100.htm

CRA default rates are much higher than normal mortgage default rates, and securitized CRA loans, pioneered by Wachovia and Bear Stearns (sound familiar?) are some of the premiere poison assets that congress then wanted to bail out.

Why did we get securitization in the first place? Because banks could meet their CRA targets by making a bad loan and then passing it off to someone else. Why did these securitized loans have higher default rates? Because banks issuing the loans didn't have to bear the risk for them any more. why did securitized loans have a high credit rating? Because banks normally bore the risk of the loans they issued, so the default rate was lower. It sounds like a circular argument, but the base engine for the entire mess was the CRA.

CRA only applies to designated low-income neighborhoods
Why, yes. Yes, it does. And it tries to do away with traditional checks on bad loans, like "low income" and "credit history" in the loans it forces banks to make. Like I said, bad loans made elsewhere are irrelevant... unless one claims (and with some evidence, too) that the subprime craze was triggered by the CRA forcing banks into bad loans, and thus pioneering vehicles to deal with such loans, which were then used in non-low-income neighborhoods, since they were an easy source of money.

The state does not pay those kinds of damages. The state can accuse and prosecute an innocent person costing them tens of thousands of dollars in legal fees; and when the person is found innocent the state doesn't have to pay a penny in compensation--even if the defendant can prove their innocence.

Even if the state had to pay some compensatory damages (governments never pay punitive damages) the taxpayers wouldn't notice it. Just imagine the state were ordered to pay $1 billion in damages (which would never happen). Ohio's two-year budget exceeds $100 billion. That makes it 1% of the budget. In reality, if someone successfully sued the state over this law, they would be lucky to get $100,000. I suppose the owner of a small business could claim a few million dollars in lost sales but even that would not make a noticeable impact on taxes.

You might want to try again. Blame a screwed currency exchange rate for example.

I'd rather not. It is generaly agreed that the U.S. dollar is overvalued (of note, the pdf ends by saying that "overvalued" doesn't mean much when private market forces hold sway and the government doesn't intervene...but check out what G.W. Bush has been doing as of late.)

As for the bloated lifestyle, I would like to ask you the following: how much do you spend a year on cable, satelite, cellphone, laundry services, fuel, restaurants, computer games, music, clothes, electronics. That list isn't all encompassing, its just to give you an idea.

Next, tell me how much on average how much do you spend on a new shirt? On a pair of shoes? On a tie? On sunglasses? How much did you spend on your SUV (yes, I'm assuming here, but don't forget in my original post I said Americans (in general)).

Do you see where I'm getting at? Now contrast this to a country like Russian, which person for person could more or less get any given US job done just as well. How much do they own? How much do they spend for one shirt (hint, as a rule of thumb, they ain't buying polo and hilfigger)? Ok, then turn it up a notch and think India, think China!

That is what I was talking about when I refered to bloat.

Fact is, this shit has already happened (think Canada!) and its only a matter of time till it happens on a grander scale (and if you're saying "it happened to Canada and we're fine, so what?" don't forget that Canada only has 30,000,000 people, and its own economic sectors to keep them busy, all the other countries I've listed have significantly more people, and not necessarily other economic sectors to fall back on, which makes them more eager to take yours).

I'm starting to ramble a bit but what I'm still saying is unless Americans cut back you won't be able to stop this from happening. If you still don't understand what I mean by now, then unfortunately you are one of the masses who doesn't realise not just how good they've got it, but how excessive they've got it as well.

A downturn in the economy (think black monday 1929 + drought) would seriously change your response to the questions I asked above. What if that downturn was spawned by an exoduse of jobs from the US, and the crash of an overinflated U.S. dollar? And since the US has a massive trade deficite, if its dollar lost a significant amount of its value, wouldn't that affect its purchasing power? Do you think you'd still own/enjoy the things you do right now?

Oh, and one final note. Although I don't expect the above to happen tomorrow, has it occured to you that the reason you don't hear about this sort of stuff in the media, is because they have a vested interest in not alarming/letting you know? That's right, just keep giving them your money so that when the time does come, they have a pillow to fall on. What will you fall on?

Although my arguments may not be entirely right or convincing, I hope they gave you though, and I hope you at least now see where I'm coming from.