Who Is To Blame For the Mortgage Mess?
October 12th, 2008 by Wil Robinson
On ABC’s This Week, conservative columnist George Will blamed the financial crisis on poor black people:
“[W]e had regulation in effect…that would criminalize as racism and discrimination if you didn’t lend to nonproductive borrowers…to rig the housing market because the market would not have put people in homes they could not have afforded.”
This reason for the nation’s current financial woes is espoused by many more than George Will. Blame seems to largely center on poor people who bought homes they couldn’t afford.
It’s stupefying that when Wall Street investors lose hundreds of billions of dollars, the poor and blacks get the blame.
In the land of the free, home of the brave, where everyone pulls themselves up by their bootstraps and takes personal responsibility (except Wall Street millionaires who bear none for promoting and encouraging more of these bad loans), we like to place blame on those people who haven’t done their part. When a home is foreclosed on, we point fingers at the owner.
It’s their fault. They took out a loan they couldn’t afford. They bought a home that was bigger, more luxurious than their income level could justify. They have bad credit, and thus should suffer the consequences of high interest.
Sort of sounds like “they” got uppity and were finally put in their place.
Cook County (Chicago) Sheriff Tom Dart knows the truth. He recently ordered his department to suspend evictions because as many as “a third of the 400 to 500 evictions” they were performing every month were of renters who had been faithfully paying their rent. Yet their landlords had failed to keep up with the mortgage.
After all, how much does a landlord care if a home they don’t live in and can’t pay for is repossessed by the bank? They aren’t the ones out on the street. According to the Mortgage Banker’s Association, “investors are much more likely to default on their mortgages if they see the value of their investments falling due to falling home prices.” Technically, a property investor defaulting on their loan is a business decision.
But according to George Will and others, the problem isn’t with landlords and property investors, it is with “people in homes they could not have afforded.”
Consider a deconstruction of this theory:
A 2008 report by the Harvard University Joint Center for Housing Studies cites the fact that nearly 20 percent of home foreclosures are non-owner occupied homes. Poor people (white or black) who struggle to buy a first home don’t go around buying second and third properties to rent out to tenants. The only people who can afford to take out multiple loans and buy multiple properties are those people with capital to invest.
Strike one, George Will.
African-American borrowers were more than twice as likely to get a sub-prime loan as a white American of the same income and credit level. Yet the rate of sub-prime loans to African-Americans actually increased with their income level. Upper-income blacks are three times as likely to get a sub-prime loan as an upper-income white. Hispanics face similar discrimination. In some metropolitan areas (Chicago, St. Louis, Philadelphia, Milwaukee), blacks received sub-prime loans 5 times more frequently than whites of equal income levels.
In essence, sub-prime loans (high interest loans with escalating interest rates) that are the most difficult to repay were pushed on blacks and Hispanics at a much higher rate than whites – despite income levels and credit scores. Any “over-representation” of minorities on home foreclosure lists is more a result of racist lending practices, not from giving money to “non-productive” people.
Strike two.
Given the facts, why does the misperception persist that the poor (and, according to some like George Will, blacks) are to blame for the mortgage crisis?
The media loves a good sob story. Sensationalism still rules and the mortgage meltdown is no exception. Major networks, cable news, and newspapers have been reporting for months about the rising foreclosures, spiraling home values, and increasing evictions.
So when CNN sends out a reporter to get a “real-life” story of someone who has defaulted on their home loan, they don’t look for the investor that has defaulted on 5 of his 10 rental properties. No one will feel sorry for a wealthy property owner who complains of not being able to make a mortgage payment while still collecting monthly rent from his tenants as he sits comfortably in his own home, paid for with interest from his investments.
Instead, the networks find the family of four that has lost their dream home. Then they turn on the water works.
Thus, the only images we see are people that represent that demographic that George Will is so quick to condemn for the nation’s financial crisis. The only people on the news that “represent” those affected by home foreclosures is a family that has lost the only home they ever have owned – a home promised to them by George W. Bush’s “ownership society” and his administration’s support for the over-extension of credit.
And then the very media responsible for our misperception of reality puts George Will on the air so he can blame the first easy victim, saving him from going beyond his own shallow analysis. Much more convenient to fall back on age-old racism and elitism: blaming the “other.”
Strike three.
Tags: mortgage crisis, racism, discrimination, conservatives, War of Misinformation
Well written article.
Regarding Will’s assessment - So what is new about it?
Blame is usually assigned to those that have the least - least power, least money, least social status - it is a value judgment essentially built-in to most cause and effect situations in the U.S.
I don’t know if Will is a racist - but anytime blame is placed on the people other than the movers and shakers, I suspect we are dealing with those with one-way vision. They feel entitled to their wealth and success and they seem to believe the peons of the world are there to toil so that wealth flows upward. We still are struggling with a plantation mind set.
And if Will and his buds really believe that when first time home buyers take advantage of hyped-up good deals from their banks and lending institutions, they are the root cause of our current woes, then I can only believe we are far from becoming a true democracy, we are still a plantation.
Bill–
Took me a second to realize you were assessing “George” Will’s views, not mine…
I don’t know if George Will is a racist, either. I think it’s one of those types of racism that is deep and almost unconscious, which is the most vile kind because it cannot be addressed if it is not identified.
It matters little if he is perpetuating his views, however. He reaches millions of people spouting off on his columns and on Sunday morning talk shows - and whether it is true or not, people form opinions based on what journalists say. Not everyone has the time to spend examining all the issues, and we look to respected journalists with a similar worldview to aid us in forming opinions.
Everyone does it - I do it. I look to David Brooks, Nicolas Kristof, and even (heaven forbid) Tom Friedman (although I try not to when Friedman is talking about foreign policy).
So given this mindset, is it too much to ask that our opinion writers consider things objectively and not base their opinions on stereotypes and othering?
Well, I for one do not really care for nor do I listen to most talking heads. I never watch network TV news and I quit reading opinion pieces a long time ago… and I don’t have a clue who David Brooks, Nicolas Kristof, and Tom Friedman are.
What is a ‘respected journalist’ … well whatever it is, it’s a self-defined thing and akin to Hollywood giving itself Oscars.
I’ve seen George Will for nano seconds on TV - he looks the stereotype conservative - The only thing of his I’ve read is his book, ‘Men At Work’ about baseball players.
I figure ‘opinion writers’ are in someone’s pocket… whether it’s an ideological guru, book publisher, a corporation or fellow stock holders - they really aren’t as a independent as they profess.
Somehow I muddle through it all by listening to NPR, reading many internet news sources - and I read books. I know, how quaint!
Though the opinion may be muted, even NPR reporters (and book authors) have a worldview. It’s up to each individual journalist to see that they present facts - and not misguide their readers/viewers.
If you ever watch Jim Lehrer Newshour on PBS, David Brooks is the bald guy w/glasses that is brought in on Fridays for comment on the weeks’ events. He typically writes columns for the NY Times, and is a new (not to be confused with “neo”) conservative.
Sorry, I really don’t want to flog this too much. First, I don’t watch Jim Lehrer - I just don’t watch ANY TV news.
In fundamental ways, the camera lies. While it can reveal pieces and portions of reality, in general, the camera does things unlike the human eye - yet it gives the impression that it is eye-like. But the human eye is far less selective. Using an Ansel Adams photo as an example - his are majestic images with edges and borders. His audience never sees the discarded beer bottle, just out of frame. Same with TV cameras, they are selective, exclusive and not encompassing.
My feeling is those seeking employment in front of a camera have more agendas than those writing words. Whether it is a person speaking political opinion or a person doing stand-up comedy - they will do whatever it is with more verve, more color, more élan. Plus the act of talking in front of a camera just feels good.
There’s a wide range of psychological issues when in font of a camera. I’m sure most talking heads are ernest and to some degree honest but they can’t help themselves. Despite that they are referred to by crew members as ‘meat puppets’, they themselves feel important, unique and special. After all, they are the ones getting the spotlight and acclaim.
Then there’s the time allotment issue and the entertainment issue. There’s isn’t a talking heard out there that doesn’t work at being interesting and capable of speaking concise sound bites. Also, there’s a director and producer waving madly at the talking head to speed up, stretch it out or wrap it up.
A slow speaking, not word clever, talking head just won’t find work…
So, I read and to listen to a few radio interviews featuring faceless people with expertise… and if the radio show is really good they will have a panel of experts all getting equal time to speak and explain.
It’s not the visible ones, Wil.
[...] are plenty of people who say it’s unfair to blame those who took out loans they couldn’t repay, or even people who accidentally find themselves [...]