Skip to comments.Feds' shortcut to closing wealth gap backfired on minority homeowners (50 yrs in still impoverished)
Posted on 07/28/2011 1:24:09 AM PDT by Cincinatus' Wife
Did you see the devastating numbers about the wealth of minority families?
Their savings have largely been wiped out. White households now have 20 times more wealth than black households and 18 times more wealth than Hispanic households.
When you consider the large number of minority households in the middle and upper classes, you get a sense of how devastated lower-income families must be to create such an overall disparity.
Nearly 50 years after President Lyndon Johnson began the War on Poverty, we are as impoverished as ever.
There are various reasons. But a big one is this: The federal government turned home ownership into an affirmative-action program, complete with quotas. And a lot of people who had no business buying houses bought them and then lost them.
"As sad as it is to say, this began in the Clinton Administration as a response to the argument that the poor and minorities couldn't get credit and were being left out of the home-ownership dream," says James Wright, a sociology professor at University of Central Florida. "They couldn't meet credit requirements. There was a lot of pressure in progressive circles" to change those requirements.
To further this goal, Fannie Mae agreed to buy high-risk subprime loans in 1999. This meant lenders could sell the loans to unqualified buyers and then dump them on Fannie and the taxpayers.
The Department of Housing and Urban Development set a goal that, by 2001, half the portfolios of Freddie Mac and Fannie Mae should be composed of loans to low-income and moderate-income buyers.
Once Freddie and Fannie were fully engaged in the subprime business, the market went crazy. Lenders enticed unqualified and unsophisticated borrowers into signing loans they couldn't possibly pay off.
This was social engineering run amok.
(Excerpt) Read more at orlandosentinel.com ...
(Here's more fascinating Jamie Gorelick trivia: That giant wall she built between the FBI and the CIA, making 9/11 possible? It was financed with a risky loan from Fannie Mae.)
Under the Democrats' 2010 "Financial Reform" bill (written by Chris Dodd, Barney Frank and Goldman Sachs), Raines keeps his $90 million, Jamie Gorelick keeps her $26.4 million, and Goldman keeps its $12 billion from the AIG bailout.
Let's get it back. Twelve billion, one hundred and sixteen point four million dollars might not sound like a lot to you, but it starts to add up."
NRO- July 21, 2011: Dodd-Franks Fannie Trap "One year ago today, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Despite the Wall Street moniker, the tentacles of Dodd-Franks 2,315 pages and hundreds of pending rules reach across many American streets to many types of businesses, from manufacturers that use derivatives to hedge inflation and interest rates, to small stores that extend credit through layaway plans.
Ironically, about the only two firms Dodd-Frank doesnt touch are the two most responsible for the crisis: the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In their new book, Reckless Endangerment, New York Times financial columnist Gretchen Morgenson and market analyst Joshua Rosner write that Fannie led both the private and public sectors down a path that led directly to the financial crisis of 2008. At the end of the book, the authors note with dismay, as have many conservative critics, that the law doesnt lay a glove on Fannie and Freddie.
GSE reform is coming, promises the Obama administration. In an op-ed yesterday in the Wall Street Journal, which largely consisted of blasting Republicans for efforts to lessen Dodd-Franks impact, Treasury Secretary Timothy Geithner proclaimed, We have started the process of winding down Fannie Mae and Freddie Mac and reforming the overall mortgage market.
Yet Fannie and Freddie are bigger than ever, securitizing nine out of ten home mortgages and receiving unlimited guarantees from the taxpayer, thanks to the Obama administrations Christmas Eve bailout of 2009. And one provision of Dodd-Frank has not only slowed the momentum of reforming the GSEs, but threatens to make them even bigger....."
But factions have been so dumbed down and so much dependency created daily, that now more Americans CLING to government. Now that they've been compromised, progressives can easily scare minorities, old people and suggestible groups.
Obama and the Democratic Party want all of us clinging to government and their dictates.
You’re right; they mention “minority families” in the first sentence, and you have to wonder if that is a family in the traditional sense or baby-mommas paired with Uncle Sam’s money.
Ain't gonna happen.
First, any non-black authority who says it gets slapped with the 'racist' tag, or is discredited by the lib media.
Next, for the revelation to be credible, it would have to come from one of their own, and that person would have to be a conservative to be willing to educate them. Such a person would, of course, be discredited by the lib media.
Finally, it would require support and unity of message from the African American leadership -- not the political leadership but leadership within the community. Those traits would not be forthcoming from leaders who have built their careers and comfort on the message they would have to destroy to truly free their own people.
When U.S. blacks find out? It so ain't gonna happen.
There is a HH panel survey, called the Survey of Consumer Finances (SCF), conducted by the Fed every three years.
The SCF shows a larger % decline in net worth among minorities than among white HHs, but not to the extent showed by this Pew study, which was based on the Census Bureau’s SIPP.
Also, this research was based on the most recent SIPP, which was conducted in 2009. There has been a lot of economic turbulence since then, so I doubt that this research reflects the current state very well.
Do you think the current situation is even worse (or perhaps improved)?
This doesn’t reflect just people who have actually lost their homes, but the decline in value of the homes themselves even for people who have kept them (since a house is the biggest asset most people - of any ethnicity - own). So I suppose it’s probably even worse.
Yep...all of that and they ALL voted for it...and they will again, and so on, and so on, and so on!
For about a decade the Left has been transitioning their human rights/social justice platform from “race” to the broader one of economics (the one they’ve been creating) ie “the poor.”
Minorities who weren’t qualified for loans made it a race issue until they were magically qualified; when they were unable to pay them back they were “duped by the banks” (the same banks that were forced by the government to make the bad loans).
Personal responsibility is as abstract to our permanent underclass as education is; the number of poor immigrants who come here (legally or otherwise) and leave them in the dust is embarrassing.
And why TURN OUT for the general election is so critical. Any hint of a close race will be pulled across the finish line with voter fraud by the Left, or tied up in activist courts until the Left can manufacture the right outcome.
Definitely not improved. I would guess that the overall condition of U.S. households is worse, and that minority HHs have been hit harder than white HHs. The stock market recovery has disproportionately improved the condition of white HHs. But most HHs, white or otherwise, don’t have enough assets in the stock market for the recovery to make a significant difference.
Generational poverty -- learned at the knee of mothers waiting for the check in the mail -- destroyed family unit, courtesy of the great society and government is your daddy = crippled, dependent society.
Gunwalker, minority home ownership etc, all examples of leftists rejecting the worlds reality for their own.
It’s gonna’ lead to bloodshed, you know.
Race was always just a proxy for “poor” for the left. With the rise of a prominent black elite, it has become difficult to make the case that racism contributes to black poverty. The experience of the white middle class in the US is replete with examples of mediocre black professionals quickly ascending the corporate ranks. The election of an Affirmative Action President was probably the culmination and last hurrah of the drive to make racial amends. There is very little tolerance for further racial reparations. So I think the left is simply responding to what the polls are telling them.
Yeah, I. Think that was the idea. I think their plan was to instead of trying to bring minorities up to the middle class, they would bring the middle class down to the poor minority level. It’s easier to control poor and uneducated people, which is why it is the preferred method of choice employed by third-world dictators.
Participation in affirmative action requires abandonment of any sense of personal responsibility by whites as well as minorities. Without the prior 40 yrs of saluting bullshite and mouthing bullshite and enforcing bullshite this particular form of affirmative action would have been turned back by the bankers as asinine and un enforceable and stupid. The whole point of AA was not to advance the position of the poor and put upon, rather it was to erode the larger societies sense of right and wrong. (See the tagline)
Post of the day.