TheLoop21.com

By: Michael E. Ross (Add to your loop)
Mon, 10/13/2008 - 00:05

Guess what, folks? It's time to play Whack-a-Minority.

As the presidential campaign of Sen. John McCain has steadily declined and the most severe financial crisis since the Great Depression has overtaken America, the conservative movement — its thought leaders and others — have built a new boogeyman.

They're sending a message meant to both validate the aspirations of the McCain campaign and find a believable cause for the now-global financial crisis.

Guess what, folks? It's time to play Whack-a-Minority.

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Sept. 18 was apparently Pile-on Day in this game. That was when Lawrence Kudlow, CNBC host and former Reagan financial adviser, appeared on MSNBC's Morning Joe talk show and blamed the crisis on low-income homeowners, disproportionately black and minority. Here's what he said: "(Members of Congress') ... liberal guilty consciences forced banks and lenders to make lousy sub-standard loans, and that has to be repealed. Not everybody can afford a home, Joe. Some people have to rent."
 

Even Morning Joe host Joe Scarborough, a reliable conservative, ripped into Kudlow.

The same day, Fox Business Channel's Neil Cavuto said it plainer than that. In a discussion with a California congressman about the Treasury Department's decision to place housing agencies Fannie Mae and Freddie Mac into conservatorship, Cavuto tried to point the finger of blame.
 
"When you and many of your colleagues were pushing for more minority lending and more expanded lending to foloks who heretofore couldn't get mortgages, when you were pushing home ownership ... Are you totally blameless?," Cavuto asked Rep. Xavier Becerra. "I'm just saying, I don't remember a clarion call that said: Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster."

Notice Cavuto's ham-fisted conflation of "minorities" and "risky folks."

Washington Post columnist Charles Krauthammer jumped in the game a week later, writing in the Sept. 26 Post that "much of this crisis was brought upon us by the good intentions of good people. … For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac — which in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity."

And on Oct.7, McCain, speaking at the second presidential debate, indirectly blamed low-income homeowners for getting loans they couldn't afford. Trotting out the whipping boys Fannie Mae and Freddie Mac, McCain said "they're the ones that with the encouragement of Senator Obama, and his cronies and his friends in Washington that went out and made all these risky loans, gave them to peole who could never afford to pay them back."
 
The same night, McCain, who by his own admission doesn't know much about economics, had the nerve to speak condescendingly to Oliver Clark, an African American who asked him a question about the mortgage mess. "I'll bet you may never have even heard of them before this crisis," McCain said in full paternalistic mode. (Read Clark's response to the comment here.)

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Let's be real here. The mushrooming crisis that Cavuto, Kudlow, McCain and others would lay at or near the feet of black and minoirity homeowners has a number of sources. True, some minority homeowners were stretched beyond their means with homes they had dificulty affording. But there's more to it than that.
 
The current crisis can be blamed on lack of government oversight, on liberal (small "l") banking policies and the Federal Reserve's drive for lower interest rates, and on the actions of speculators, the so-called "flippers" who bought condos and other properties during the housing boom, then sold them for a profit without ever turning a key in the door.
 
Let's be real here. The subprime adjustable-rate mortgages that conservatives complain about represent less than 7 percent of the loans outstanding, according to the Mortgage Bankers Association.
 
Let's be real here. Unless you're blessed with the ability to buy a home with available cash, you're borrowing over your head. It's a rite of American passage for the first-time homeowner: you sit at the closing with your pen hovering above a document showing numbers — zeroes and commas and percentage rates — that can be briefly terrifying.
 
But you remember the way you grew up, and what you were taught about the history of your people, and the importance of Owning Your Own. From somewhere inside, the phrase "40 acres" whispers to you. And you sign the papers and become a Homeowner, another kind of American, one with a stake in the national soil.

Whether you have a top-shelf, grade A mortgage or a subprime mortgage, the act of buying a home is an investment for the future. It's nothing less than a principled gamble on having a future. Buying a home, in the best of times or the worst, is an act of faith. And it's time to stop scapegoating Americans for believing in their country and their place in it.

(Read about who's really to blame here.)

Check out some other stories on the credit crisis:

Black communities hit hard by the financial crisis

Business stories feel the economic pain

A bailout for (black) homeowners

Minority-owned banks fare well . . . for now

Opinion: A bailout just for Wall Street

Are you affected by the major retail closings?

Yes, I have to travel further now

No, stores aren't closing near me

Major retailers were never near me

I would be, if I planned to shop