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.
It is not the act of home ownership that leads to accumulation of wealth - it was the act of learning fiscal discipline that led to home ownership and only then did it lead to accumulation of wealth.
If you give someone a mortgage without them learning how to manage their finances first, they will not be able to hold onto that house. There are no shortcuts. But politicians always like to think there are, because selling the concept of gain without pain is usually an easy vote-getter.
In no case will the information in the article help end the failed welfare state. What it will be used for is to increase welfare due to the evil White people having the money.
“When blacks realize what the Democratic Party has done to them, watch out.”
The converse is also true. When you take wealth from producers, you get fewer people producing wealth.
Socialism is a negative sum game. Taking wealth from producers and giving it to consumers, results in more consumers and fewer producers. Society as whole becomes poorer.
Over time, the negative wealth production compounds. Everybody is progressively impoverished until society finally collaspes when the few people who are still producing decide to leave and produce somewhere else that is less punishing of production.
Wouldn't you want to destroy the black family? How? Get the men out and replace them with a welfare check. Destroy any discipline in government schools, force all the black kids into the government schools, where simple warehousing and no learning takes place.
I could go on and on with policies to destroy blacks. Cut to the chase, THEY are LIBERAL policies. So, you put a black figurehead on top of the liberal policies, put the pedal to the metal. Only rubes and nitwits are surprised that the results hurt blacks. Actually, that's the purchase.
Speaking of rubes and nitwits, did anyone see O'Reilly's interview with Congressman Luis Gutierrez (D-Mex)? He's surprised that Obama lied to him in 2008, when he campaigned with him, that Obama was not going to push "Comprehensive Immigration Reform". Rube! Dupe!
".......As a student of the left, Jamie Glazov, has observed in an article about the middle-class defenders of recently captured Seventies terrorist Kathy Soliah: "if you can successfully camouflage your own pathology and hatred with a concern for the 'poor' and the 'downtrodden,' then there will always be a 'progressive' milieu to support and defend you." -- Huey Newton, George Jackson, Bernadine Dohrn, Sylvia Baraldini, Rubin Carter, Mumia Abu-Jamal, Rigoberta Menchu and innumerable others have all discovered this principle in the course of their criminal careers.
There is a superficial sense, of course, in which we were civil rights and peace activistsand that is certainly the way I would have described myself at the time, particularly if I were speaking to a non-left audience. It is certainly the way Mrs. Clinton and my former comrades in the left refer to themselves and their pasts in similar contexts today.
But they are lying. (And when they defend racial preferences nowa principle they denounced as "racist" theneven they must know it).
The first truth about leftist missionaries, about believing progressives, is that they are liars.But they are not liars in the ordinary way, which is to say by choice. They are liars by necessityoften without even realizing that they are. Because they also lie to themselves. It is the political lie that gives their cause its life.
Why, for example, if you were one of them, would you tell the truth? If you were serious about your role in humanity's vanguard, if you had the knowledge (which others did not), that you were certain would lead them to a better world, why would you tell them a truth that they could not "understand" and that would hold them back?
If others could understand your truth, you would not think of yourself as a "vanguard." You would no longer inhabit the morally charmed world of an elite, whose members alone can see the light and whose mission is to lead the unenlightened towards it. If everybody could see the promised horizon and knew the path to reach it, the future would already have happened and there would be no need for the vanguard of the saints.
That is both the ethical core and psychological heart of what it means to be a part of the left. That is where the gratification comes from. To see yourself as a social redeemer. To feel anointed. In other words: To be progressive is itself the most satisfying narcissism.
That is why it is of little concern to them that their socialist schemes have run aground, burying millions of human beings in their wake. That is why they don't care that their panaceas have caused more human suffering than all the injustices they have ever challenged. That is why they never learn from their "mistakes." That is why the continuance of Them is more important than any truth.
If you were active in the so-called "peace" movement or in the radical wing of the civil rights causes, why would you tell the truth? Why would you tell people that no, you weren't really a "peace activist," except in the sense that you were against America's war. Why would you draw attention to the fact that while you called yourselves "peace activists," you didn't oppose the Communists' war, and were gratified when America's enemies won?............." David Horowitz
I tend to agree. The worst oppressors of average black Americans for the past forty years are those self-appointed leaders of the black community like Jesse Jackson, Al Sharpton, Maxine Waters, and the like. They've done more harm to the aspirations of black Americans than all the white racist orgs have done for one hundred years.
I see you caught the lie in the article as well. Lending institutions had a gun put to their head by the feds telling them to either make x number of loans to unqualifed applicants or unpleasant things would happen. The scribbler didn't mention that in his article.
Talk is that Al Sharpton will have a nice megaphone to keep stirring racial hatred with a primetime show on MSNBC.
Housing Market Headed Off A Cliff. 10.8 Million Mortgages At RiskMostly Greenspan's fault but the 'to big to fail banksters' are all greedy bozos, too
* * *Obviously this is going to significantly drive home prices further down, as I reported a few weeks ago, 28% of US homeowners already owe more on their mortgage than their homes are worth. A recent survey by Fannie Mae found that 27% of American homeowners are considering walking away from their mortgage. A perfect storm is brewing.
As prices continue to drop, with 10 million now at risk of default, a strategic default movement could devastate the too big to fail banks that caused this mess in the first place. * * *
Housing Bubble Leads to Deflation of Real Estate
I predicted all this in 2005. Pardon me while I take a long laugh break . . . LOL !
“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.”
You’re absolutely right.
It is disgusting how many people are surprised by such things when they are in fact entirely predictable.
But yours are irrelevant groupings to the conversation. It's the proportion of people in those groups as a percentage of the population as a whole that tells the tale.
“The scribbler didn’t mention that in his article.”
Is is never mentioned in coverage of this problem; the banks for the most part knew who was creditworthy & who wasn’t, but didn’t have the requisite melanin profiles, so they were forced to make bad loans (with the burden borne by those customers who pay their bills).
WOW. That’s some graph.