Now the Wall Street Crisis Is Our Fault

I'm not even going to go into the slime attack from the McCain/Palin team over the last few days. Palin in front of a beerhall putsch crowd screaming "terrorist!" "treason! and "kill him!" in reference to the Democratic presidential nominee. Nor will I spend any time on the infamous "that one" remark from last night's debate, which seemed like a "meds running low" moment from McCain. We should all be inured to this by now. If the Republican Party can't bring about a Permanent Republican government, they're going to brand everyone not on their side as Permanent Others. 

         But this "hate piece"  from Ann Coulter really breaks some new ground. It inspired the following op ed piece, which was somewhat edited by the Progressive Media Project and hopefully will appear in a newspaper near you in the next few days:

Bailout Blame Game Unfairly Targets Minorities

Leave it to conservatives to inject a racial component into the current economic crisis. Over the last week, leading conservative commentators like Charles Krauthammer, Ann Coulter, Lou Dobbs, and the Wall Street Journal editorial page have been trying to blame the crisis on minorities getting subprime mortgages.

The conservatives blame the Community Reinvestment Act of 1977, which was enacted to address a practiced called “redlining,” in which banks deliberately withheld credit from minority communities in the ‘60s and ‘70s. The act was intended “to encourage depository institutions to help meet the credit needs…in low- and moderate-income neighborhoods.”

Conservative commentator Ann Coulter has written that the CRA has fostered granting loans based on “nontraditional measures of creditworthiness, such as having a good jump shot or having a missing child named ‘Caylee.’”

While Coulter’s words can be dismissed as crudely racist, they echo a line of thought that asserts that since many of the subprime mortgages were given to minority borrowers, this “affirmative action” measure is at the root of the current crisis. But this attack on victims of predatory lending is as flawed as calling Democratic presidential nominee Barack Obama a terrorist.

First, if the CRA was crafted over 30 years ago, why is it that only now subprime mortgages have created a crisis? Secondly, most of the disastrous subprime loans were made by mortgage brokers and disreputable lenders unregulated by the CRA. Third, according to data from the Home Mortgage Disclosure Act, white and affluent borrowers took out 58 per cent of higher-cost loans, with blacks and Latinos accounting for 18 per cent each.

Just last week The New York Times reported that the Nehemiah housing program, which provides housing for minorities in that city’s outer boroughs has reported 10 defaults on 3900 households in the last 27 years. Hardly what you’d call an irresponsible group.

The true culprit in our current financial crisis is the policy of the Bush administration that rewrote rules for our lending and banking institutions that have enriched high-rolling financiers and bankrupted powerless average Americans. Current regulations allow institutions to charge higher fees to sell debt if loans fail, giving them an impetus to create the conditions for default in the first place.

These facts have implications for the recently signed bailout package, in which the government has agreed to purchase blocs of toxic subprime mortgages whose values are decreasing as a result of the crisis. The bailout also includes little aid to homeowners still trying to pay the predatory loans.

Now more than ever, it is clear that this country needs to reassess its domestic economic policy in a way that serves the majority of its hard-working citizens, rather than blame them for the excesses of a privileged few.