The Atlantic - Latest Comments in When all else fails blame the Negroes

Re: When all else fails blame the Negroes

Renata Nicole — Tue, 30 Sep 2008 21:11:54 -0000

If you want to give Ms. Bachman a call and let her know what you think about her comments her numbers are as follows:

Washington DC Phone: (202) 225-2331

Woodbury MN Phone: 651-731-5400

Waite Park, MN Phone: 320-253-5931

Re: When all else fails blame the Negroes

JonF — Mon, 29 Sep 2008 20:58:04 -0000

Re: Many of the securities are worthless, because the default rate is going to be near 100%.

This is nonsense. Do you really think almost 100% of mortgages will fail? I think it would take nuclear war to achieve a default rate that high.

Re: When all else fails blame the Negroes

Steel7 — Mon, 29 Sep 2008 19:10:10 -0000

They bake it into every argument like cannabis in a brownie...adds no nutritional value, but makes them feel gooood...

Re: When all else fails blame the Negroes

Joel — Mon, 29 Sep 2008 18:22:19 -0000

To whom it may concern: why are you bending over backwards to implicate race in this crisis? Especially in the absence of evidence? What benefit do you get from endorsing racist points of view? Does it give you pleasure? Is it simple misanthrophy?

Re: When all else fails blame the Negroes

professordarkheart — Mon, 29 Sep 2008 18:06:32 -0000

Fred writes:

Sorry, securitization has been going strong since the 1970s. What was different this time was the quality of the loans securitized.

Sorry, the CRA has been going strong since the 70s, too. What's different is that the subprime mortgage market took off in the 80s and then the securitization of subprime debt increased dramatically in the 90s. So while you're right about the quality of the loans, you're wrong about who made them: non-CRA lenders made twice as many subprime loans than CRA lenders and securitized them at a much higher rate. Responsible lenders didn't get into any trouble making CRA loans, while independent non-CRA lenders who didn't care too much about assessing the risk they were going to pass along anyway made bad loans to buyers of every race and income level.

Juan writes:

Blacks and "Latinos" are way over-represented among those who default on their mortgages. It's the defaults that have wobbled the whole house of cards.

Blacks and Latinos are disproportionately poor compared to whites as a group. Poor people are certainly over-represented among defaulters, but black and Latino mortgage holders do not default at rates any higher than whites of comparable income levels do (and there are a lot fewer of them).

The really ironic thing is that, back in the 90s when evidence of pervasive discrimination against minorities in lending was coming to light, people who denied that discrimination used the fact that default rates were the same to argue that lenders couldn't have been discriminating, claiming that the matching default rates were proof that lenders were finding borrowers of the same quality across racial groups. The idea was that if minorities were excessively scrutinized, they should have lower default rates than whites. It was a bogus argument, because it didn't account for the documented fact that minority borrowers were likely to get worse loan terms, and so their risk of default was artificially inflated. But the fact remains that when conservatives want to blame minorities for their own inability to get credit, the default rates are the same, and when they want to blame them for an economic meltdown, they're suddenly irresponsible borrowers who take out mortgages they can't afford on a mere whim.

Re: When all else fails blame the Negroes

B-Rob — Mon, 29 Sep 2008 16:01:22 -0000

Doubting Thomas --

The Fed later did an study that showed the disparities existed even when credit scores were controlled. You know how it happens? Like what I saw when I was dong commercial lending through a branch. A sixty year old Black small business man comes in with a piece of property in an inner city area. The White female rookie lending officer looks at the address and says "that land could not be worth very much." The branch manager rolled his eyes and ignored her because he KNEW THE GUY, who happened to be a good, longtime customer. The small businessman got his loan because the young lender was not permitted to screen him out based on the location of his property.

But how many other credit worthy people ARE screened out? Or are nudged toward the subprime lending arm, even thouugh they have good enough credit to get a lower rate loan with lower fees? And how many of them, because the higher fees push them just beyond the margin of making it, end up in a default that would not have occurred but for that dismissive nudge?

Racism as the "thumb on the scale" is the problem. But you know what's funny about that? How many of those "nudge" loans tinged in racism are now causing the downfall of the whole friggin system? It is the chickens of racism coming home to roost!

Re: When all else fails blame the Negroes

McKingford — Mon, 29 Sep 2008 13:46:00 -0000

Michelle Bachman has been making this point for over a week now.

I've only become aware of this woman in the last month or so, and she has already shot to the top of the list as one of the most sociopathic, mendacious, partisan hacks I've ever seen. She truly is loathsome.

Re: When all else fails blame the Negroes

FGS — Mon, 29 Sep 2008 12:43:25 -0000

These are people who wouldn't let a Black man even fill out the application if they could help it. Forget about the predatory terms; these are the people on the shooting end of a hidden camera.

Black man tries to check out a house and he's told, "Sorry. It just sold." A month goes by and the house is still for sale. These are the people burying their nose in their forearm and slamming the door in Giraldo's face.

Re: When all else fails blame the Negroes

Doubting Thomas — Mon, 29 Sep 2008 12:17:27 -0000

I hate to be a stickler for facts, but the 'study' only says that racial disparities in sub prime loans still existed after controlling for income, and admits they know nothing about whether after controlling for credit scores a disparity still existed.

In other words, the 'study' demonstrates exactly nothing in terms of whether or not minorities got more sub prime loans because their credit wasn't good or because they were preyed upon.

Re: When all else fails blame the Negroes

KarenZ — Mon, 29 Sep 2008 12:05:35 -0000

T-N:

Not that I've read it all yet, but The American Prospect has devoted an entire issue to "The Color of Opportunity: Narrowing Racial Divides and Expanding Prosperity for All." It goes far beyond the "Did Liberals Cause the Sub-prime Crisis?" article that you referred to earlier.

Oh, and Michelle Bachman is a troglodytette. C.f. Wonkette.com.

Re: When all else fails blame the Negroes

Steel7 — Mon, 29 Sep 2008 11:58:22 -0000

Since we're introducing anecdotal evidence, Blue Moon, my 99.9% black middle-class neighborhood (I'm the .1%) has had no foreclosures at all, that I am aware of. Those adjustable rate mortgages appealed to people's greed, not their ignorance.

Re: When all else fails blame the Negroes

Juan — Mon, 29 Sep 2008 11:10:15 -0000

"Folks, minorities are not over-represented among sub-prime mortgage holders relative to their percentage of the population!"

Freddie,

Try to keep your eye on the bouncing ball. Blacks and "Latinos" are way over-represented among those who default on their mortgages. It's the defaults that have wobbled the whole house of cards.

Re: When all else fails blame the Negroes

Blue Moon — Mon, 29 Sep 2008 11:09:16 -0000

This is a terribly un-American thing to say, but maybe we need to stop making "owning your own home" such a ne plus ultra part of the "american dream." In my 85% white upper middle class neighborhood where everyone has a college degree and there are many advanced degrees, there have been several forclosures. People of all races, incomes, and education have such a limited concept of basic economics. I have friends who are lawyers that agreed to mortgages with low teaser rates that escalated 5 years later into double-digit rates. If you can't figure out that your payment is going to skyrocket when the rate goes up... Some people just need to rent.

Re: When all else fails blame the Negroes

Freddie — Mon, 29 Sep 2008 11:07:10 -0000

Folks, minorities are not over-represented among sub-prime mortgage holders relative to their percentage of the population! Black people are slightly over-represented, which can be chalked up to the fact (and this has been amply demonstrated) that black people were more likely to be sold sub-prime mortgages than white people who had identical qualifications. Hispanics and Asian-Americans are significantly under-represented in the number of people holding sub-primes relative to their population. This whole line of thinking is just bunk, man, just pure political opportunism.

Re: When all else fails blame the Negroes

Dan — Mon, 29 Sep 2008 10:25:32 -0000

I find Rep. Bachman's comments reprehensible, but I have no doubt they will play very well in her (largely rural, largely white) district. She's hurting her party for her own reelection interests, but few pols rise very far without mastering that bit of math.

Re: When all else fails blame the Negroes

JordanT — Mon, 29 Sep 2008 10:21:55 -0000

1) The mortgage-backed securities aren't "worthless".

Some of them are worthless. Banks would take toxic loan portfolio's, slice them up and combine them with other toxic loans and then do a magic credit rating dance (bribes) and all of the sudden the paper is rated AAA. Many of the securities are worthless, because the default rate is going to be near 100%. If you think banks aren't going to be unloading the worthless crap first, you're very mistaken.

Re: When all else fails blame the Negroes

DougEFresh — Mon, 29 Sep 2008 09:51:45 -0000

The fact that a lot of CRA loans did not go bad does not absolve Democrats for their role in falling down on looking after things. Many of them, but certainly not all, did not want tighter regulation, they wanted the opposite. Part of this goal is admirable and was echoed by Republicans: to bring the benefit of home ownership to millions who were locked out for many reasons including financial ones.

Democrats favored less regulation because higher standards kept lower income borrows from qualifying for the best loans or any loan at all. More regulation would mean higher costs and fewer loans. Many Republicans were willing to look the other way because it set off a building boom and boom in the financial markets. So no one gave a damn about what was going on because for a while, everyone was winning, so shit got overlooked.

Re: When all else fails blame the Negroes

Aaron — Mon, 29 Sep 2008 09:24:23 -0000

The Republicans are shameless in blaming this on minorities. Look at this video they put together blaming Democrats in Congress for covering up for Fannie Mae and Freddie Mac and causing this crisis. Notice that most of these Dems are black. They do include Frank, who is white, but probably only because he's gay. So maybe the plan is to blame it on the blacks and the gays.

Dude,

Barney Frank is in that video because he used his position on the banking committee to block tighter regulation of Fannie Mae and Freddie Mac, not because he's gay. If they wanted to go after the gay angle they would have pointed out that his ex-boyfriend was a Fannie Mae exec.

Re: When all else fails blame the Negroes

Fred — Mon, 29 Sep 2008 09:19:43 -0000

Barbar,

"What about the bad loans made to white people?"

I explicitly wrote in my first post on this thread that marginal white borrowers took advantage of the same lowered standards. Again, read what I wrote and engage with it if you want; don't make shit up and pretend I said it.

B-Rob,

"Fred -- You don't know what you are talking about linking "affirmative action" to the bailout."

I didn't. That was Steve Sailer. I explicitly said I don't agree entirely with his position, but it's a well-thought out one and worth reading for another viewpoint. Read what he wrote and post your responses.

Re: When all else fails blame the Negroes

really? — Mon, 29 Sep 2008 09:11:26 -0000

@Epicurean Quaker: Who the hell gave you the right to post under my old pseudonym!?

Find your own.

Re: When all else fails blame the Negroes

Steel7 — Mon, 29 Sep 2008 09:07:17 -0000

Here’s how I see it- this ludicrous attempt to blame our economic difficulties on blacks is just one episode in along-running series called “Turn back the Clock”. As in, back to the ‘50s. The 1850s. When you hear “activist judges”, you might think the issue is abortion, but what they really are still pissed about is Brown vs. Board of Education. These same morons think the rebel flag is about “heritage”, and that the Civil War was not about slavery. They will never relinquish their prejudiced worldview, because, among other reasons, it’s in their financial and political interest to keep racial animosity alive. These tendencies will only get worse as the economy continues to nose-dive. On my good days I can convince myself that the majority of white Americans don’t really think this way…but lately I’m not having many good days.

Re: When all else fails blame the Negroes

really? — Mon, 29 Sep 2008 09:06:26 -0000

It isn't right to blame the financial crisis on minorities, but it is true that government policies designed to increase lending to minorities led to a lowering of credit standards across the board.

So essentially, the CRA is about seven steps removed from being tangentially responsible for the SPM bubble. If that's the new standard of evidence, then the idea of causation has basically lost all meaning.

Re: When all else fails blame the Negroes

B-Rob — Mon, 29 Sep 2008 08:59:00 -0000

Fred -- You don't know what you are talking about linking "affirmative action" to the bailout. It is, to say the least, a crock 'o sh*t. First, I used to be a banker and used to police CRA loans for an East coast bank that is now part for Bank of America. The CRA has been around since I was in middle school and the text if ht elaw has not changed. It is an anti-"red lining" statute that is about linking deposits to loans; where you take in deposits, you should be lending money, too. It is aspirational, not punitive. In the 80s, my bank's expansion into Massachusetts, for example, was challenged by ACORN because of dirty subprime lending in Boston. So to get the permits through, you do community development lending.

CRA is not a retail lending mandate, so there are many ways to comply. So the typical "CRA loan" was not considered a home loan in a minority area; it was a relationship with a community development corporation, for example, which is rehabbing storefronts or developing land in the inner city. It is providing SBA loans in a urban development zone, or underwriting a bond deal to build a charter school. Or you give money to an established inner city business who would have gotten the money from a competitor bank. It is NOT about retail lending, especially on subprime mortgages.

Most of the banks that are covered by the CRA did not do subprime lending through their deposit operations. So even if the CRA extended to retail lending, it might not have counted anyway. No, they set up subsidiaries to do subprime lending or, like my old bank, lent money to subprime lenders. And here is where the melt down began, though:

1) loan broker gets a marginal candidate approved, the loan is booked and the broker gets paid. The loan is bundled with others and sold at a discount and the package is eventually purchased by someone else. Why? Because the return is higher than average. You can borrow to buy the package and make money on the spread. If the borrower can make it fly, great. But if they can't, neither the broker nor the original lender is on the hook. The one left holding the bag is the last person who bought the package -- like Citicorp.

But

2) a dirty loan broker bribes an appraiser to up the value of a property, thereby booking a higher fee since he is paid on the gross loan amount. That loan will go under. Rinse and repeat, now you know why we have a meltdown.

If "colored people" were the reason for this meltdown as conservatives seem to be implying in this election year, then the meltdown would be restricted to inner cities and in states with high minority populations. But it is not. It is George Clooney not being able to build his casino and condo project in Vegas and $900,000 condos in Miami sitting empty. It is as much a suburban problem as anything else.

Blaming the darkies is nothing more that an effort to divide us by race in a year when a biracial candidate is trying to point out commonalities across race -- as in "I have never seen a Hispanic foreclosure or a White foreclosure". And every time you see a McCain commercial with Franklin Raines in it (Raines who was out of office two or three years when Fannie melted down), remember that they chose to run his picture -- instead of the White male who presided over Fannie's demise -- for a reason.

Re: When all else fails blame the Negroes

Ivan Ivanovich Renko — Mon, 29 Sep 2008 07:32:30 -0000

"Flip This House."

That's who's to blame for this godawful mess.

People thinking they could make a killing on the real estate market buying and flipping houses, believing that the value of the houses would ALWAYS rise.

And when the bottom falls out? And that fixer upper you bought and then sunk tens of thousands into for your flip is now worth less than you paid for the original dilapidated hulk?

Right.

The people who bought a house and are living in it are struggling to pay their mortgages; but the ones who used the low-teaser-rate mortgages to buy properties to flip and resell at enormous profits (yeah, they intended to sell long before the balloon went up) are walking away.

Pfeh.

Re: When all else fails blame the Negroes

MikeJ — Mon, 29 Sep 2008 06:00:56 -0000

It's truly stunning to see people make comments that start with "I don't know what the law says but....". Jesus fuck, google it before you go out of your way to look stupid.