Wednesday, May 13, 2009

They sold them a bill of goods

In the Financial times, May 8, Gillian Tett writes that the housing crisis was forged from the creativity of a group of young mortgage hawks who invented the subprime paper and claimed it was Grade A.

I believe otherwise.

I believe that subprime mortgages were the policy of liberals who had one goal: Make sure minorities or "the poor" had homes, whether they were ready or not.... a redress of the badness of living in non-liberal America, if you will.

Two recent quotes seem apt:
A particularly pernicious aspect of the defaults was that when this new breed of subprime borrowers walked away from their homes, they often left them in such a bad state that it was hard for lenders to realise any value from the repossessed properties. Gillian Tett, How panic gripped the world's biggest banks.

From the Wall STreet Journal, May 13:
Since the housing bust, homeownership levels for minorities have fallen more steeply than for whites... blacks and Latinos were far more likely than whites to take out so-called subprime loans — those designed for people with weak credit records or high debt in relation to income. In 2007, 27.6% of home loans to Hispanics and 3.5% of mortgages to blacks were in the subprime category, compared with 10.5% of those loans made to whites.

Why the disparity between whites and hispanics and blacks? Were irresponsible whites just so much more savvy? Er, no... people like Barack Obama and organizations like Acorn went out to the communities and found people to take subprime loans.

Miniorities set up to fail by their so-called protectors.

These liberals are despicable.


Anonymous Kevin S. Willis said...

It's well documented that the Federal Government (and Fannie Mae and Freddie Mac) kept insisting banks lowering their standards, while insisting that the federal government would cover the loans and buy them up. If the banks had been left alone, to swink or swim on the strength of their own loans without any implicit or explicit guarantees (and demands) from the Federal goverment, none of this would have happened. When banks were the only ones in the business of making sure their loans were sound, there were no subprime mortgages. While various private entities got into the playing of the game (ratings companies, with a financial incentive to do so, rated these terrible mortgages AAA prior to their sale to international banks, etc), it wouldn't have happened without the various Federal programs to improve minority housing.

The fact that the news doesn't play all the democrats telling us how this current situation wasn't going to happen, that it was impossible, that Freddie Mac and Fannie Mae were being run expertly and would be solvent forever, is a crime that falls directly at the feat of the news media. Especially given that these are, for the most part, the exact same folks claiming they are going to fix it and blaming capitalism for this "egregious market failure".

How are even the somewhat engaged and aware folks in the electorate supposed to know how the Democrats created this crisis, and are in the process of making it deeper and more terrible, when the news forgets about all the documentary evidence implicating the Democrats, and makes each news day basically: "Wow, that Obama. Isn't he wonderful?"


9:54 AM  

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