Mainstreamest of the MSM admits: Yes, minority loans stoked the economic crisis
December 22, 2008
For weeks, writers like Steve Sailer and Ann Coulter have been pointing out that the economic crisis was likely caused, in large part, by the massive drive to give mortgage loans to blacks and Hispanics.
The reaction was easy to predict: Loony right-wingers and racists want to "scapegoat" minorities for economic problems that are really the fault of greedy whites.
But those critics are going to find it harder to dismiss the latest outlet for that observation: The New York Times. In a lengthy and wide-ranging Sunday piece, the paper puts the minority-loan angle up high, with a front-page photo and the caption, "In June 2002, President Bush spoke in Atlanta to unveil a plan to increase minority homeownership."
An inside photo shows a proud Bush touring a new development in heavily-black Atlanta, presumably staged to show what a Great White Father he is. One sentence in the story began, "He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors."
I can overlook the NYT for wanting to append "greedy whites" to that sentence, given how surprised I am that it was written at all. In my modest role as a pro-white media critic, I sometimes wonder, "How much racial reality needs to be breaking down our doors before the media will acknowledge it?" Well, you might say this economic crisis has broken down the door — and the media leader, the NYT, felt compelled to at least mention it.
The problem with the story is that the minority-loan angle is mentioned early, but dropped. The rest of the story takes the traditional MSM tack of blaming the evil and incompetent whites in government, from Bush on down.
Still, it's a good sign. When the mortgage meltdown began, the media's coverage was expectedly misdirected: The narrative was one of greedy white bankers, brokers and other finance characters who were aided and abetted by incompetent white Republicans who were derelict in their regulatory duties. But the only "regulation" or "oversight" I can think of that would have prevented mortgage defaults is one that said, "Don't make that loan. It's too risky." Of course, that would have gone squarely against Bush's goal of more loans for minorities.
Bundled mortgages and derivatives aside, an individual mortgage is not a complex transaction. A bank extends a loan for the purchase of a house, and the purchaser agrees to pay back the loan, with interest, at certain amounts and on certain intervals. However complex the apportionment of interest (I did not realize, until the purchase of my own house, that the interest in usually heavily front-loaded), the lender will make it simple for you: Pay this amount by the first of the month, or we'll take back the house and kick you out.
It does not take a PhD-holding economist to figure this out. So, when mortgages are defaulting, there's usually a devastatingly simple reason: The homeowner isn't paying the mortgage. Who are these people? Why aren't they paying the mortgage? Yet for all the media's manpower, nobody asked that question. Nobody said, well, let's look at all the defaulters, and go out and talk to a few.
This is partly because of one media rule that applies to the controversies they cover, even beyond the context of political correctness on race: Problems are never the result of everyday people. Problems are always the fault of a big bad business, or government, or something institutional. For instance, when the topic of bankruptcy is covered, the media will focus most of its attention on "predatory lenders" who dangle credit cards in front of college kids, evil banks and their pushy lobbyists, etc. They'll never hone in on Wanda Sanchez, who, while unemployed, went on a weekly shopping spree at Saks, and now has to file for Chapter 7.
The media thinks of itself as protecting "the little guy" against bigger and more powerful forces, which doesn't strike me as a too-terrible approach. (I long ago dropped my mainstream conservative reflexive defense of "big business", and I sure as hell haven't ever felt an instinct to defend government.) But the problem with this approach is that it overlooks a fundamental truth: Some people (of all races) are problematic. They tend not to be reliable. They'll sneak a little extra where they can, and they'll free-load when nobody's looking.
With minorities, of course, this reality is magnified: Blacks do, in fact, tend to be less intelligent and less conscientious, which in turn makes them even less reliable when it comes to paying off loans. I am confident that same holds true for Hispanics, though I am not as familiar with data on the Hispanic IQ.
The lower creditworthiness of blacks in general is significant. Early on, before racial consciousness, I was motivated to concern over what was presented to me as the problem of "racism in lending," i.e., bank refusals to lend blacks money. I had started to dismiss other forms of "racism" as the explanation for black failure, but this one seemed legitimate to me, if all that were needed for black success was a loan.
But the statistics didn't bear out the concern. As Peter Brimelow has shown: They were going by the credit ratings, and, as you can imagine, it did so happen that blacks had absolutely terrible credit. I've seen plenty of anecdotal examples of this as an attorney. But never mind: Today, financial institutions face a damned-if-they-do, damned-if-they-don't quandary: If they loan to blacks, they're accused of "predatory lending," and if they don't, they're accused of "redlining."
And when it comes to Hispanics, many of whom are not here legally to begin with, the responsibility of paying off a mortgage is surely even more compromised.
Needless to say, none of these realities were contemplated by the forces that decided to gamble with America's economy in the name of racial equality. And while I don't expect the NYT's mention of this angle to shift the debate entirely, it's a welcome crack in the ice.
Christopher Donovan is the pen name of an attorney and former journalist.