In other words, housing discrimination fueled the recession.
46. Following the recent economic crisis, the issue of predatory lending, and particularly discriminatory lending, is an area of enforcement focus. The recession in the United States was fueled largely by a housing crisis, which coincided with some discriminatory lending practices. The subsequent foreclosure crisis has disproportionately affected communities of color, and the federal government has focused resources and efforts to determine whether and where discrimination took place, as well as to ensure greater oversight going forward to prevent similar crises in the future. In this respect President Obama signed major financial reform legislation in 2010 that includes a new consumer protection bureau, among other provisions.
In an insightful article in The American Thinker, Jack Cashil destroys the report's main premise.
Let us begin with this premise always and oft repeated. Discrimination on the basis of race is wrong. As Mr. Cashil points out, racial discrimination in favor of minorities actually hurts the allegedly benefited minority:
Read it all (link above).
To make the accusation of discrimination work, the report writers had to ignore the most telling set of data, namely default rates. In 2004, the Department of Housing and Urban Development did a comprehensive study of FHA loans that originated in 1992. The sample size was substantial -- nearly 250,000 loans.
Given that the FHA insures only modest loans for low- and moderate-income people, the cross-racial comparisons were for comparable properties. What the study revealed, among other results, was that after the seven prosperous years from 1992 to 1999, blacks were defaulting on their loans more than twice as frequently as whites, and Hispanics were defaulting three times more frequently.
Here is the crucial point: if minorities had been held to a higher standard than whites, their default rates should have been lower than whites, not higher. These numbers suggest the opposite and the obvious: blacks and Hispanics were held to lower standards and have been for at least the last forty years. Chinese-Americans, by the way, actually did have lower default rates than whites.
As to why black homeownership rates are lower, only the willfully blind can fail to see the problem: namely, the government-induced collapse of the two-parent black family. In 1993, the average income for households headed by divorced women was 40 percent that of married couples; for unmarried women, it was only 20 percent. As the numbers suggest, many of these women could not manage homes of their own. Homeownership rates for female-headed households have struggled to stay above 50 percent. For married couples, by contrast, the rates have hovered consistently in the 80th-percentile range.
I can remember being told by a black woman that she avoided black doctors, because she was afraid that they had been pushed along, unqualified, by affirmative action. That is a sad, but very real effect of a well-meant policy of racial discrimination by preferences. The implicit assumption is itself racist: blacks are not capable of succeeding on their own, so they need white help on the form of preferences.
Racial discrimination is wrong, and even well-intended discrimination is harmful. The Obama administration is telling the United Nations that President Obama is committed to making the situation worse.
Is this a great presidency or what?