Acorn: Seed of the Financial Crisis

This article originally appeared at www.americanshareholders.org

Here is a list of ACORN’s crimes—take special note of number nine.
1.    This is a group that was knee-deep in voter fraud during the president’s election. 
2.    There seems to have been zero accountability for this fraud by the group’s leadership. 
3.    ACORN does not appear to have any true ‘leadership’ to speak of. 
4.    ACORN has now been deeply embarrassed by two amateur journalists. 
5.    They were embarrassed because they were assisting two people—posing as a pimp and a prostitute—who wanted help getting a loan on a house to keep 13 El Salvadorian sex slaves.  
6.    They did these things using tax payer dollars. 
7.    The government—only now—seems to be moving towards fixing the problems with ACORN.  Instead of prosecuting them criminally—as would certainly be done if these crimes had been perpetrated by Bank of America or JPMorgan—the government has finally decided to stop paying taxpayer dollars into this fund. 
8.    ACORN initially claimed that the portrayal was “false and defamatory and an attempt at gotcha journalism” and only now has put a hiring freeze on the company—a bold attempt at real reform.
9.    ACORN helped start the financial crisis.

The media seems to be missing the ninth point.  Many people may not know about ACORN is that when they aren’t registering voters such as Donald Duck and Abe Lincoln, they spend their time helping those who can’t afford a home to get one anyway.  One of ACORN’s primary objectives is to protect against ‘predatory lending’ and to fight to help people get ‘sub-prime loans.’  The videos that have been widely publicized show heinous behavior by ACORN employees—assisting a pimp and a prostitute who need help getting a mortgage. 

Now, granted, it is obscene that the pimp and prostitute were trying to get a house to hold 13 sex-slaves—but ACORN also lobbied for a broken financial system.  Steve Malanga, a senior fellow at the Manhattan institute, and a column writer for realclearmarkets.com has recently written an article bemoaning ACORN’s creation as a part of the Community Reinvestment Act.  Specifically, he mentions—over and over again—that ACORN pushed for lower lending standards, in particular for minority and low income groups through ‘alternative qualifying’ programs.  In other words, ACORN lobbied for the lower lending standards which led to the current financial crisis. This led to legislation against sound banking principles (including no-documentation loans, for instance). 

Now, however, the government is suggesting that we should go further than ACORN, and encourage even more not-home-owners to buy homes that they cannot afford, which, as Mr. Malanga notes, ‘is sort of like arguing that the cure for alcoholism is another martini.”  The government refuses to see that interference in the market causes problem—in this case, a rather major problem, which some have affectionately called the ‘great recession.’  The government’s desire for every American to own a home is bad enough—but strong-arming companies into bad business decisions ought to be illegal.

What does this say about the government’s ability to ensure that taxpayer dollars are being spent with care?  What does this say about the government’s promises to root out fraud and abuse?  In particular, if the president’s health care plan includes cutting Medicare by $500 billion, shouldn’t he cut funding to ACORN and other unmonitored groups?  What does this say generally about the government’s ability to allocate resources more efficiently than the free market?

The media should take note: not only is ACORN a prostitution abetting, tax-payer funded, bureaucratic nightmare, it also was the seed of the current financial crisis.  We shouldn’t be so surprised now that it’s in full bloom.