Now the financial crisis is our fault, too?
Karol Collymore
Hey! Did you know it's the the minorities who've gotten our country into the financial situation in which it's currently drowning? According to Ann Coulter, Neil Cavuto, and other conservatives, it is Jimmy Carter's Community Reinvestment Act for causing the meltdown. Foreclosure signs are in EVERY neighborhood; wealthy, middle class and poor. People of all colors live everywhere. But someone is going to look at my skin and assume that my alleged sub-prime mortgage and those who look like me sank an entire nation's economy?
In the process of racial reconciliation through presidential election, it seems it's two steps forward and one step back. I have a heart full of hope that Barack Obama will be president. I'm getting past the whole "he'll get shot" thing, I see citizens of all colors rising for change, and I can almost see this lovely family of color in the whitest of institutions. Then I see The Oregonian story of the Obama effigy hanging in a tree in front of the scholarship dorm. What's worse than the article? The comments section.
This doesn't make me mad, it gives me enough anxiety that I think I need a xanex. It makes me cry and it reminds me that strangers on the street might be thinking things about me that I can't control. Obama's winning in November (He'll win. Oprah said so and she's read The Secret.) won't stop this, but it move our quest for respect forward. I need this win. Our country needs this win.
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Oct 1, '08
here's a good read on this issue.
http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?pagewanted=1&_r=1&ref=patrick.net
"On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession."
7:02 p.m.
Oct 1, '08
They are desperate to retain control.
Playing the race card does two things for them.
it fires up their racist base whom they desperately need to make this election even competitive.
it diverts attention away from what they really do NOT want Americans to be talking about - the fiscal suicide that deregulation has proven to be.
Oct 1, '08
Karol,
You are absolutely correct that minorites did not create the current financial crisis. The problem with the Community Reinvestment Act is that it made it easier for people from EVERY economic class to not only purchase a home but also to speculate. This speculation eventually drove up the price of housing which in turn made it harder for minorities to not only purchase,but also to make the payments on these houses.
For a more detailed explanation see: www.youtube.com/themouthpeace
PB
Oct 1, '08
Well, I expect even more inane and insane comments as the country turns away from these neocon blowhards. As Kevin says, they are getting desperate as the McCain candidacy sinks in the polls.
As for strangers thinking something about you that you can't control, Carol - well don't give them the satisfaction by making you cry. Idiots will never disappear from the earth and all we can do is smile at them - which will probably make their heads explode.
I look forward to an Obama victory, possibly even a popular vote landslide. But I am still cautious about these evil idiots and the damage that they might be able to do in the final month.
7:12 p.m.
Oct 1, '08
It's a diversion tactic, playing on racist tendencies. It's pathetic.
The bad loans didn't even really cause the problem. They triggered the problem, which was that Wall St. had put huge side bets on the bad loans. $1 trillion worth of subprime loans and other debt had as much as $50 trillion in side bets put on them. It's the side bets that are wiping out all the Wall St. firms, not the actual mortgages themselves. I've gotten this story from more than one friend who actually worked in the credit derivatives groups at the firms that were doing this.
Even the bad mortgages aren't worthless, they're just worth maybe 60-70% of face value. The problem is that the credit default swap bets are 50x face value, and with the mark to market rules the banks have to cough up more cash to cover their positions. And the positions are simply too big, so they're getting wiped out.
Wall St. doesn't want people to know that it was their own reckless gambling that caused this, because they fear regulation, cost recovery measures for the bailout, and diminished trust from domestic and foreign investors.
These lies about the real cause of the problem are made all the worse by the racist message and the attacks on programs to help working families. But working families of all political persuasions have more in common than they do different, especially in terms of how we fix our financial system and promote safe, decent housing for everyone.
Oct 1, '08
On a side note, looks like Smith just handed his Senate seat to Jeff Merkley by voting for the largest transfer of wealth from the poor & middle class to the rich in the history of Earth (i.e. the Wall Street bailout). I for one will not let anyone forget Smith's vote... And kudos to Senator Wyden for standing up to the moneyed interests and voting NO BAILOUT.
Oct 1, '08
No one seems to be mad at Obama for voting for the crummy bill. I'm steaming. The thing is a piece of junk. I was hoping he would stand by his principles.
Oct 1, '08
No one seems to be mad at Obama for voting for the crummy bill. I'm steaming. The thing is a piece of junk. I was hoping he would stand by his principles.
You mean you were expecting him to be a LEADER and he acted like a POLITICIAN. Are you really that surprised?
8:41 p.m.
Oct 1, '08
The intellectual dishonesty of the "blame CRA" argument is breathtaking.
The first thing to remember about the original CRA is that it was an anti-redlining law. Bank discrimination tied to de facto or de jure residential discrimination not only made it harder for people living in "minority" neighborhoods to get mortgages, led to their paying higher interest rates, and led therefore to higher rates of default and loss of equity contributing to aggregate "racial" wealth disparities. It also contributed to the intensification of segregation through the phenomena of "steering" and "block-busting."
Under "steering" prospective racial minority buyers or renters were discouraged or prevented from buying or renting in "white" neighborhoods. Geographical constriction of areas where they could buy or rent led to higher prices & interest rates, and also to rack-renting of unmaintained or inadequately maintained dwellings by slumlords, who gained exploitation profits by charging higher rents while putting less into maintenance for tenants belonging to racial minorities.
Blockbusting used the same disparities and the redlining process to gain exploitation profits by using fear to "flip" the racial identity of neighborhoods. When real estate speculators decided to engage in blockbusting by selling or renting to members of racial minorities in previously "white" neighborhoods, they profited by in the first place inducing self-fulfilling panic at loss of wealth invested in homes among white property owners, whose efforts to sell out quickly drove property prices down where speculators could pick them up well below value. Efforts to avoid such processes being set in motion motivated racist attacks and ideas among whites defending their economic interests and blaming members of racial minorities rather than (overwhelmingly white) real estate speculators. Then, once the undervalued properties were bought cheap and the neighborhoods were redlined as "minority," the upside exploitation profits from raised prices, high mortgage rates and rack-renting kicked in.
Although such practices encouraged white working class and middle class racism, it was also combined several forms of class exploitation, including racialized super-exploitation of black working class persons and families, and ripping off white working class and lower middle class homeowners of the value of their home investments. Division among workers was an added perk for those benefiting from the system at the top.
The idea that before CRA banks were simply engaging in "prudent" lending based purely on financial considerations is just bunkum.
Secondly, the current financial crisis is very specifically tied to a real estate bubble that has an actual traceable history whose timing in no way matches changes in the CRA held by rightwing ideologues not merely to incentivized (itself a myth) but in some mysterious way forced bad lending practices across the board. On another thread someone linked to a very useful article in The American Prospect that is well worth reading. It demonstrates both that the timing makes no sense for attributing blame to the CRA, and that the scope of the bubble and the locus of its worst practices went well beyond the area of CRA operations.
Finally, it is worth noting that while there are race-baiting overtones to this argument, more generally it is an attack on liberalism and an effort to shift the blame for the bubble away from the "free market" ideology run amok that really created it. The race dimension makes it a two-fer -- blame liberals rather than conservative economic dogma, and blame liberal ideas about racial equity and equality in particular & thereby invoke politics of resentment at partial demise of certain historical forms of racial inequity.
8:45 p.m.
Oct 1, '08
Oh, and n.b. the relationships among racially discriminatory lower wages, racially discriminatory rack-renting, and difficulty saving that likewise have contributed to cumulative historical racialized aggregate wealth disparities.
Oct 1, '08
Karol - no comments on this document from the Colorado Democracy Alliance?
http://www.freespeech.com/images/strategygroup.pdf
Is there an Oregon equivalent? And are they running the same "education" campaign?
Oct 1, '08
And the CRA/race"card" also ensures we all are diverted into focusing on our salience, in our survivalism, engaging divisions amongst ourselves, losing our populist vocabulary - speaking in specific and narrowly.
That is the game.
This is an historic race indeed. The scabs are ripped off, this is sure. There is scar tissue on that National body part over there and an active bleedout in this internal organ here... Karol, this is a pain that is easily felt if we pay attention daily. I feel it often as a result of walking where poverty never bows its head, and the mechanics of poverty and continuing genocide are working in daylight always. It takes a toll, yes. This may sound cheesy, but I am sorry for your pain. It takes an authentic toll. Right back to back with energy, vision and nourishing hope in engagement.
I hope we see a fundamental shift in our culture as a result of this. The opportunistic, in-the-moment habits of the moneyed "above" did indeed infiltrate down in to the lower SESs (nothing about colour here). And that has me as perturbed as the up-aboves doing it.
We need a fundamental shift. More cheese: could this be the time? Campaign finance reform might just take one leg off this stool, to start with. For now, we do continue in a sort of interlocking jigsaw of beholden elements.
Oct 1, '08
I'm waiting for the GOP advertisement mimicking the notorious Jesse Helms campaign ad showing only a pair of white hands crumpling up a rejection letter while the voice-over intoned about how someone "less qualified" got the job....
Oct 2, '08
Here's where this was discussed a few days ago: The insane GOP game of Deregulation Russian Roulette
Oct 2, '08
After the election I will probably write up a more formal post for Blue Oregon on this - but nobody seems to note how the Banks are a large part of the cause of falling house prices.
Example: In west Redmond, north of the Eagle Crest Resort, a house on Larch St. sold for $1.1 million in Sept. 2006 - right at the peak of the market. The owners had financial problems, and gave their bank a deed in lieu of foreclosure for $917,000, and walked away in December of 2007. So far okay - the borrowers gave up their downpayment, nobody is hurt too much.
Then, that same bank put the house on the market for $650,000 in March. In May they accepted an offer of $500,000.
Why did the bank sell it so low? Only because they were in a hurry. If they were patient, they could have sold it for $850,000 to $800,000.
By selling that house for $500,000, they have undercut the local market. By undercutting the market, it makes it difficult for others with more expensive houses to sell them, e.g. the bank lowered all market values in that area. Now, people with similar homes are finding themselves upside down, owing more money than they can sell their homes for - because a bank was not patient enough to get market value, and then undercut market value.
That then forces others into foreclosure or its alternatives. That then gives the banks more inventory to get rid of.
--- For Republicants to blame minorities for the falling housing prices is just nuts. Odds are that the short sighted people working for these banks that are dumping real estate at these low values are in fact - Republicans. And probably, the majority of them are not of racial minorities.
But, reality never had anything to do with Republican politics did it.
Oct 2, '08
Of the loans made to Latinos in 2005 and 2006, 1 in 12 will end in foreclosure.
In 2008 we expect to see approximately 20,000 foreclosures a week.
Foreclosure rates have not yet peaked in Hispanic communities.
So who made these statements? It was La Raza at their A Stronger America Together: Advocating for Latino Families
12:10 p.m.
Oct 2, '08
Karol,
Looking at the race side of the race and away from the bailout for a minute, I found an incredibly encouraging story today about an NRA film crew that was allowed into a West Virginia mine on Monday to try to convince union workers to badmouth our guy about his stance on guns.
The miners, to a man, walked off the job for 24 hours!
The money quote:
"This was a surprise visit," explained VP Local 1702, Safety Chairman Eric Greathouse, "and a lot of the miners felt this was a direct slap in the face of the union because they were trying to coerce our people into saying things against Barck Obama."
"Consol doesn't let anybody on their property - never," said Safety Committee Member Mark Dorsey, "And for them to let the NRA come on the property and solicit our membership was totally uncalled for. We made our endorsement to our political process and we didn't bother them and they shouldn't be harassing our membership over this."
Take heart Girlfriend.......Things are going our way, albeit more slowly than we might hope.