Part 2
There are many angles from which to tell this story, which is as multi-faceted as any Constitutional, cultural, and financial issue in America can be. What my interpretation lacks in depth, it perhaps makes up for in simplicity and accuracy.
The tale begins in the 1980s, when the banking system was under increasing pressure, after the savings and loan crisis, to reform. For liberals, one aspect of “reform” meant a change in the mortgage system. This also was a period of ramped-up civil rights activity, and progressives were letting it be known they were not about to sit back and do nothing to advance the cause. They set their sights on mortgages, because home ownership, after all, had always been at the heart of the American dream.
Banks had been reluctant to lend money to potential homebuyers who lived in inner cities, which meant people of color. But it wasn’t because the applicants were Black, as Black activists alleged. It was because they were poor. The banks feared, properly, that their loans would go delinquent. Since Black Americans then, as now, are far poorer than Whites, they were far less able to afford to buy a home. Liberals, as usual, identified this as evidence of racism, and they set out legislatively to correct this “inequity.”
Progressives argued that it was unfair for banks not to lend to Black people as generously as they lent to Whites. Once the barriers to financial improvement were lifted—and liberals were working hard to identify and overturn those barriers--Black people could advance to the middle class and join ranks with everyone else as responsible borrowers and homeowners. A large part of the liberal argument to loosen up on credit requirements was that the same banks that were limiting Black people from borrowing had practiced “redlining” for years. Banks, according to this view, had deliberately discriminated against Black people, i.e., refused to lend to them because they were Black, and not just because they were poor. This argument found resonance in liberal C-suites, in progressive philanthropies that had turned their attention to civil rights issues, in the Congress, and in the liberal media. New laws and regulations were passed. Banks, under all this pressure (which included pressure from local civil rights organizations in their home towns), loosened their credit requirements for homeownership.
The Federal government, through Freddie Mac (whose motto is “We make home possible”) and Fanny Mae (“powering America’s housing”), guaranteed the new loans. The government mandated that mortgages now had to be approved for people with basically no down payment, who had a credit history of delinquency, and who might be expected to be unable to repay their loans. Hundreds of billions of dollars flowed to home buyers, often with sub-prime mortgages, and home ownership did indeed soar, including among people of color. The era of dangerous mortgages had arrived, masqueraded as “equity.” In the words of one analyst, “The less likely you were to pay off a mortgage, the more likely you were to get one.”
Relatively quickly, as the bankers had feared, millions of borrowers were unable to pay their mortgages. They defaulted instead. And banks were left on the hook, with unfathomable amounts of unpayable debt bleeding their coffers dry. It should have come as no surprise when Lehman Brothers, Bear Sterns and scores of other banks collapsed in 2009 alone.
The collapse also spun off a wave of corruption, as banks supplied favored “community groups,” such as ACORN, with millions of dollars to facilitate mortgage lending in “the community.” Often, this facilitation was nothing more than a quid pro quo: the groups would get the money, in exchange for not inciting “the community” to assault the banks with fictitious charges of racism; and banks would get their customers. When it all collapsed, trillions of dollars were wiped out. Government-supplied “affordable housing” thus led directly to the 2008-2009 financial collapse, and almost unraveled the economy of the whole world. The biggest affordable housing program in American history—making mortgages easy for anyone to obtain—turned out to be a disaster. One could argue that our present housing crisis, which is nationwide, is a continuing ripple effect of the 2008-2009 financial meltdown.
You’d think our leaders would have learned that affordable housing is an unobtainable myth whose pursuit aims a wrecking ball at the economy. But no, the left still hasn’t learned that lesson. They never do. For them, “affordable housing” has achieved the sanctity of religious catechism, a sort of Eleventh Commandment. They cite it as a “human right,” from which they deduce that their goal must be fought for, even as they trample on other rights and actually cause ruination. No price is too great, progressives argue, in order to achieve “equity.” But as we’ve seen and are continuing to see in Oakland, there is a high price to equity: the collapse of a once-great city. The truth is, poor people will never be able to afford their own homes, nor should they. This generational task can only be addressed by preventing poverty, and the way to do that is to teach our children the importance of focusing on good-paying careers and being responsible citizens. Oakland, with its failed woke ideology, sadly does a bad job at both. We need to stop believing the hucksters who promise us, falsely, they will develop affordable housing, or anything else for that matter. All they’ll do is get us in trouble.
On a separate but related matter, why is the Oakland Privacy Commission against new Flock cameras? Because its members are power-hungry maggots who hate the police and don’t care about your safety or mine. End the Oakland Privacy Commission now! Get rid of the grifters who have raped and plundered Oakland!
Steve Heimoff