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BLAME BLACK PEOPLE!
Sure, it's a reflexive conservative technique, but it's tried and true, and after all, there is a black guy running for president. The easiest way, after all, to obscure the fact that conservative deregulation policies are at the heart of the credit crisis is to blame black folks, and doing so has the added advantage of making the guy running on the other ticket the reason for the meltdown. Investors' Business Daily sets the tone:
To hear today's Democrats, you'd think all this started in the last couple years. But the crisis began much earlier. The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas.This line has been echoed by Neil Cavuto and Lisa Schiffren (who you might remember from such racist insanity as "miscegenation is a product of communism"). As Robert Gordon explained back in April, this is hooey. But even if 100 percent of bad debt had been produced by people of color, the reason for the financial collapse is that debt was chopped up and marketed as mortgage-backed securities to financial institutions all over the world. If the debt hadn't been sold, making many people very rich, the bad debt wouldn't have been integrated into the rest of the financial system and it would have just led to the collapse of the original institutions providing mortgages. In other words, it wasn't the debt itself; it was the very lucrative selling of the debt that got us where we are today.Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race.
But never underestimate the dedication of conservatives to using white resentment as a political tool, or the resolve of the party of personal responsibility in blaming everyone else for their problems. Never mind that those who got rich off of selling the bad debt will remain rich, while the people who will lose their homes are not rich and may end up quite poor.
--A. Serwer
COMMENTS (5)
Kinda like the Left using the hooey of black resentment as a knout for subduing white folks, isn't it?
Posted by: 3 cwt | September 22, 2008 4:12 PM
No 3 cwt. It isn't.
Playing on white resentments of blacks in order to divert attention from the real source of a national crisis is very serious.
Why don't you actually list how white people have been "subdued" by black resentment as you so claim? I think you'll be hard pressed to find any serious national phenomena. The same can hardly be said for what this article is about.
Posted by: Awkward Silence | September 22, 2008 6:57 PM
See what they are really saying is that this is a result of "over-regulation". The banks were pushed into this corner by the regulations from the Carter administration! Very shrewd. I thought this was the result of the unregulated free market and greed, but clearly my thinking is just plain bat poop crazy...
Posted by: Dave Smith | September 23, 2008 11:49 AM
If the Community Reinvestment Act was such a bad law why didn't any the Republican presidents since Carter try to get it repealed? They managed to get almost every other regulatory law affecting financial services eliminated.
Considering what the banks and mortgage companies have been doing I doubt such a repeal would have been popular. Once the financial service sector managed to pass the risk along to someone else things like sub-prime mortgages became all the rage.
The Community Reinvestment Act may have affected banks but no one was holding a gun to the head of the investment banks forcing them to buy the illogical, and possibly illegal, derivatives based on the sub-prime mortgages.
Greed drove the market into the ground, not any act passed by Congress.
Posted by: John H | September 23, 2008 12:19 PM
The regulators who fell asleep at the switch and failed to regulate exotic loans are the same ones who have gutted the regulatory provisions of CRA by giving virtually every banking institution a "satisfactory" or "outstanding" rating in the past 5 years.
The organizations protesting the exotic predatory lenders - have been advocating LIMITS on abusive loan terms not the freewheeling "sell it if you can" that mortgage lenders engaged in. They have also been warning of the impending crisis for years.
Posted by: ck frank | September 29, 2008 4:59 PM