Sep 28th, 2008 at 4:07 pm
Did Minority Homeowners Cause The Financial Crisis?
This is one of these wingnut talking points that I can’t even begin to unpack in a coherent argument, but white supremacist sentiment has always been an important element of the modern conservative movement so it’s not surprising to see it rear its head even in odd contexts. Stephen Bainbridge knocks this business down and proclaims the people making these arguments the folks who “mae you embarrassed to be a conservative.”
48 Responses to “Did Minority Homeowners Cause The Financial Crisis?”
Register
RSSLogin
Advertisement
Visit Our Affiliated Sites
Books By Matthew Yglesias
Topic CloudView topics sorted by popularity
Abortion
Afghanistan
Basketball
Blanche Lincoln
Budget
China
climate
Congress
Crime
DC
Demographics
Economics
Economy
Energy
EU
Finance
Gender
Health Care
History
Immigration
Inequality
International Law
International Relations
Iran
Israel
Labor Markets
Media
Monetary Policy
National Security
NATO
NBA
Palestine
Political Reform
Public Health
Public Opinion
Race
Regulation
Russia
Sarah Palin
Sports
Stimulus
taxes
Technology
Trade
transportation
Featured
Subscribe to the Progress Report
Contact Matthew Yglesias
Use this form to contact blog author Matthew Yglesias.
ArchivesBlog RollAbout Matt YglesiasContact Me
Donate
September 28th, 2008 at 4:18 pm
The commercial real estate market is about to collapse as well. Surely this is because the niggers all went out and built office parks and manufacturing space they couldn’t afford as well.
September 28th, 2008 at 4:21 pm
Damn black people, always sneaking into your neighborhood and leaving funky mortgages behind. It always happens.
September 28th, 2008 at 4:38 pm
Bainbridge sells himself short. There’s so many other reasons to be embarrassed to be a conservative.
September 28th, 2008 at 5:00 pm
I heard this crap on a call-in radio show and about had apoplexy. The ass was blaming it lenders not being allowed to red line anymore. Maybe he knew what red lining actually was, but regardless it was pure racist code language. To think that stuff likes that has entire radio networks devoted to it is humiliating.
September 28th, 2008 at 5:03 pm
I don’t see this line of argument as racist since no one is (or needs to be) blaming minorities. Instead it is an attack on the dems for a cheap, nonsensical plan which undoubtedly worsened the housing market. But what conservatives need to do now is convince Americans that dems were just as opposed to housing market regulation as republicans. Show the quotes of Barney Frank and others saying any regulation would make home ownership unaffordable and other nonsense. And for those of you who feel this is all a right wing lie just read the nyt archives for the last 15 years (search “minority housing”). it was real and changed the way banks did business.
September 28th, 2008 at 5:08 pm
The right wing morons are free to keep blathering that this was all the fault of Barney Frank and Fannie Mae and Freddie Mac, but it’s a load of horse-sh*t and each and every economist who’s asked details why.
And read the New York Times today, to see why the biggest cause of this entire crisis was the fantastically idiotic Commodity Futures Modernization Act by financial terrorist Republican Phil Gramm, stuck into the federal omnibus budget act only 2 days after the Supreme Court stole the election from Al Gore and gave it to the nimrod idiot gift to the super-rich, George W. Bush Jr.
September 28th, 2008 at 5:14 pm
it was real and changed the way banks did business.
.
How? Who told these people to write bullshit loans to everyone? What law encouraged this?
September 28th, 2008 at 5:21 pm
I heard this crap on a call-in radio show
And I heard this crap being spewed by a Republican undergrad Saturday night. It was definitely “test-marketed” 6-9 months ago in preparation for being “rolled out” to the mass market, given my discussions with conservatives over the past year when the housing market started to implode.
hat conservatives need to do now is convince Americans that dems were just as opposed to housing market regulation as republicans.
What conservatives need to do is stop lying and stop fomenting class and racial resentment, and only after that we can discuss what else they “need” to do. For now, they seem either too dishonest or ignorant with their current set of talking points to be trusted with making any economic policy suggestions whatsoever. So, to conservatives: stop being dishonest ignoramuses first, and then your policy concerns can be addressed after, if you have any.
September 28th, 2008 at 5:24 pm
I can’t find anything to back this up, but I rememeber in the days after 9/11 seeing Phil Gramm on C-Span freaking out about the Patriot Act. Specifically, he was freaking out about the provision that requires banks to file Suspicious Activity Reports on wierd transactions. To act that way in that climate…I swear he’s got some serious pile of cash stashed out in the Cayman’s for his handiwork in letting the financial industry do any damn thing they want to.
September 28th, 2008 at 5:33 pm
Ed Marshall
The CRA of course. But there were also several state laws too. Besides the main argument conservatives should be making is not that CRA caused this mess. They didn’t. Instead conservatives need to show that democrats were just as complicit as republicans in opposing housing regulation (albeit for different reasons).
September 28th, 2008 at 5:35 pm
Are you bullshitting me!!!
The CRA from 1977 is to blame!!!
You keep saying “conservatives need to”, do you believe this bullshit!!!
September 28th, 2008 at 5:47 pm
The liberals are at fault here for backing the Magna Carta in 1215AD. If the king had had the kind of power he needed, he could have fixed all this. Hrmph. Libruls.
September 28th, 2008 at 5:59 pm
5
Here is a Village Voice article saying similar things.
September 28th, 2008 at 6:13 pm
It’s an article about the guy that your candidate wanted to replace the current head of the SEC with.
September 28th, 2008 at 6:16 pm
This is one of those times when there’s only one appropriate response: “GOP, STFU.”
These assholes support discrimination that white people only experience vicariously through a hidden camera. We’ve all seen the GOTCHA! segment: a Black man shows up to view a house and the agent tells him, “I’m sorry. It just sold.” It has nothing to do with predatory subprime lending because people with the wrong skin color never even got to fill out an application.
September 28th, 2008 at 6:22 pm
The CRA of course.
Yeah, sure. And, of course, even though it was thirty years ago, the problem was that Clinton changed the enforcement, blah blah blah.
Thing is, I looked in the Washington Post yesterday, where they have the listings of all of the Trustees sales of properties that have been foreclosed. In a surprise to me, they actually list the original loan, lendee, and rate on the property.
Damned if I couldn’t find a single property whose loan had originated before 2004.
So, in addition to the wealth of data that debunks this by showing that CRA lenders have lower rates of default, I also have my own lying eyes telling me that most of the mortgages are not of the 5-to-10-year-old variety, as you might expect if CRA and Clintonian rule changes were really the problem.
This whole line of thought is either laziness, stupidity, or mendacity.
September 28th, 2008 at 6:40 pm
“Homeboys in Office Space”
September 28th, 2008 at 6:44 pm
Needless to say, MattY is being stupid again by confusing support for our laws and the point out of facts with being a supremacist.
And, for those not familiar with Bainbridge, he’s an idiot as well. For instance, he was a fan of one of Bush’s worst plans.
In the current case, Bainbridge didn’t understand Krikorian’s point; in a later post Krikorian made it clear what he was referring to.
As for the current crisis, I haven’t looked into it in depth, but I am very familiar with things like this program that Bush allowed. Everyone here is a fan of Bush, right?
See also things like this and these:
24ahead.com/blog/archives/007420.html
24ahead.com/blog/archives/006300.html
24ahead.com/blog/archives/005029.html
24ahead.com/blog/archives/004827.html
24ahead.com/blog/archives/004635.html
All that illegal activity is something that MattY implicitly supports.
September 28th, 2008 at 6:51 pm
To paraphrase The Terminator, blaming minorities is what they do. It’s all they do.
September 28th, 2008 at 7:19 pm
You aren’t trying hard enough, Lonewacko.
Tell me a story about how the MexicanGovernment actually pulled all the strings on this and collapsed Wall Street. I know you have it in you.
September 28th, 2008 at 7:34 pm
14
It’s an article about the guy that your candidate wanted to replace the current head of the SEC with.
McCain is not my candidate. I don’t like either of them much but Obama is probably the lesser evil.
September 28th, 2008 at 7:35 pm
Oops! Looks like MattY and Bainbridge made a major mistake in their rush to support illegal activity.
Don’t blame MattY too much: he relies on others to do the thinking he can’t do, and when they fail he fails too.
September 28th, 2008 at 8:53 pm
Do the MATH, dude.
The total amount at risk in bad mortgages is about $250 billion. Even if it ALL evaporated (which it won’t, because if you sell a $300k house for a $200k loss you still have a $100k asset), that’s not enough to sink the US economy, much less destroy the use of credit around the world.
What can do THAT, is the $45 TRILLION in interlocking derivatives, etc., sloshing around the planet.
When somebody bought a $300k house in 2005, the mortgage was immediately bundled with a couple thousand others. The bundle was sold as a mortgage backed security, then the risk that some of the mortgages would go bad was sold as a credit default swap, then everybody changed partners and did it again… and again… and again.
That’s how a few hundred billion in mortgages became TRILLIONS in interlocking debt.
But that’s not the kicker: a credit default swap is like you sold me insurance against the theft of a car that you and I agree is worth $50k, that is, the 2% or so of the mortgages bundled by the thousands that you figure is the worst case of how many would default. You bet 2% or less, I bet more — that’s why you sell me the insurance, and why I bought it.
BUT THE WAY IT WORKS, as the buyer, I get to decide, in effect, what the car is worth when it is stolen — and remember, I don’t own or drive the car (the financial markets didn’t make the mortgages, they just bundled ‘em): but in effect, the way I file the claim, the car you thought was worth $50k is going to cost you a MILLION dollars to pay your obligations under the insurance claim.
That’s what happened to AIG. Nobody wants to buy a contract that would have made money with 2% defaults, when the default rate is 6%: but AIG still has to pay it off. So without Uncle Sam’s cash, they couldn’t stay in business — Lehman couldn’t keep trading, and Washington Mutual couldn’t make loans: same pattern.
When Gramm stuck in the ban on regulating derivatives and credit default swaps in 2000, he was making this ’spinning straw into gold” theory of wealth creation possible. But it’s a scam, nothing more.
So whenever anybody brings up homeownership, just ask ‘em to do the math: if the problem was $250 billion in bad mortgages, nobody would have blinked. It isn’t the billions in bad mortgages, it’s the trillions in derivatives and default swaps.
That’s where the real money is — and they are worth so much MORE when the real estate bubble burst, ya gotta wonder if these sharks caused the subprime bubble in the first place.
But it’s not about homeboys becoming homeboyers: ain’t enough money in that to cause a credit crisis.
September 28th, 2008 at 9:34 pm
Do the MATH, dude.
They can’t.
That’s the sad truth of it. That’s why you wind up with the ignorant rednecks out here flogging this thing while their betters are embarassed.
You are asking them to unwind derivatives and make sense of them and they can’t do elementary math.
September 28th, 2008 at 10:20 pm
We’ve had housing bubbles in Spain, Ireland, and the United Kingdom that have now busted and are wreaking havoc on these countries. The primary cause of these bubbles is the same as the one in the United States, too much cheap money (or in other words, too much liquidity in the system). Alan Greenspan’s Federal Reserve kept interest rates too low for too long. When central banks print too much money over a long period of time they create asset bubbles and inflation.
Those who choose to blame minorities are fools who should be ignored.
September 28th, 2008 at 11:12 pm
Those who choose to blame minorities are fools who should be ignored.
I don’t know who “rosh” is, but isn’t that something that one of the crooks who got us into this mess would say? I mean, they’d try to smear those who point out facts as, say, “white supremacists” (see the post). Wouldn’t they try to hide their questionable activity behind unassailable victims of some kind, kind of like human shields?
P.S. Bainbridge strikes back.
September 28th, 2008 at 11:12 pm
consdiering that Bainbridge is too much of a wimp to keep his comments open when too many people challenge him, I doubt that he really has the courage of his convictions.
In any case, I am by no means saying that lowering credit standards for minorities is the single cause or even the most important cause of the housing crisis. Rosh is certainly correct about the government printing too much money.
But the facts that Bainbridge musters hardly prove his point. He claims that the fact that blacks comprise 12.4% of the population and 16.2% of the sub-prime mortgages means that are not given loans in disproportionate amounts. But he automatically assumes here that blacks are on average equally creditworthy with non-blacks, so that in a fair system blacks should get about 12.4% of sub-prime mortgages. If based on credit history they would get (for example) 8 or 9%, then Bainbridge’s figures start looking a lot worse.
September 28th, 2008 at 11:27 pm
Those who choose to blame minorities are fools who should be ignored.
I’m not blaming minorities. I’m blaming the politicians who like to pretend that they are helping minorities by imposing equality of results.
Isn’t it interesting though, that in order to prove his point that “housing affirmative action” did not cause any part of the banking crisis, Bainbridge makes the same affirmative actiony assumptions that are being criticized?
September 29th, 2008 at 7:00 am
rosh: It’s clear that black people snuck into all those countries and stole all the good mortgages and replaced them with shoddy ones. You gotta watch those people.
September 29th, 2008 at 7:04 am
I’m not blaming minorities, and I’m not blaming the politicians who like to pretend that they are helping minorities by imposing equality of results.
I’m blaming 30 years of glibertarian idiots who think that because they can spew pseudo-philosophical phrases about such as “imposing equality of results” that they are to be treated as anything other than barking gibbons.
I’m blaming 30 years of right wing anti-regulatory fools who think that because they made gigantic and idiotic fantasy assertions about how ‘the market’ would work based on their masturbatory coloring books, they ought to be allowed to blame the nigra-loving liberals for any problems which are the direct result of their manias.
September 29th, 2008 at 8:55 am
Cal Thomas was regurgitating this horseshit in my local paper Saturday. It made him sound original for a change since he usually just keeps recycling the same column every week.
Cal Thomas is a racist? Who knew?
September 29th, 2008 at 3:15 pm
Minorities are: All White Women, Asians, Native Americans, Hispanics, Blacks, Disabled Persons, etc. according to the government. So when minorities are blamed for the mortgage crisis these are the people they are referring to.
Only by direct experience do I blame hisppanics more than any of the other groups simply because, I know hispanic realtors, mortgage worokers, title reps, escrow company workers, and notaries. They work together to get home loans for legal and illegal aliens who do not qualify and/or who cannot document employment. The daughter of my maid who is NOT a legal citizen or green card holder told me she went to the escrow signing when they closed on their home and she used her sisters identification with the notary, she was actually age 17 at the time.
There are many hispanics doing this. She also told me that they all vote in elections even though they are not citizens. This kind of foolishness goes on because, no one is willing to stop it. Everyone is afraid to stand-up to hispanics, even though they are destroying this country. Making hispanics obey our laws is not hateful or racist. They are not paying taxes because they use fake social security numbers, they make money from the U.S. economy, but send it to their country to support their economy. Politicians are so worried about the hispanic vote.
That they fail to protect this country and economy.
If they want to be part of this country, they have to do right by it and obeying our laws.
January 13th, 2009 at 9:59 am
laptop battery
laptop batteries
February 8th, 2009 at 8:59 pm
laptop battery
February 9th, 2009 at 3:20 am
laptop battery
March 2nd, 2009 at 5:19 am
levitraIncredible site!
March 11th, 2009 at 4:46 am
I want to say – thank you for this!
March 14th, 2009 at 5:28 am
I want to say – thank you for this!
xanax
March 22nd, 2009 at 6:20 am
tramadol
If you have to do it, you might as well do it right
April 2nd, 2009 at 5:25 am
Incredible site!
buy cheap viagra
April 9th, 2009 at 6:33 am
Incredible site! viagra