Monday, February 23, 2009

Real Racism Camouflages Itself In The Righteousness Of Modern Liberalism

I decided to re-post a portion of Andrew Sumereau's article Real Racism which I read over at American Thinker this morning. But I am honestly pretty sick and tired of race talk. I thought we were entering a post-racial America. But he said some things that I think are worthy of repeating and I want to have a record of them here:

"An honest assessment of the last election must conclude that Obama got more votes because of the color of his skin than were cast against him for it.

In fact, the sin of hatred as understood by the term "racism" is no more prevalent today than any other symptom of the fall of man. To call our society "racist" is no different or more nonsensical than calling it "slothful", "greedy", "proud", or "covetous." Human beings are imperfect......

But of course the charges of "racism" and endless calls for "dialogue" about race are more about power grabs, money and intimidation than sin. The race industry thrives on empty rhetoric and phantom threats to maintain a position of legitimacy. And the intimidation works, like nothing that has gone before. The pejorative label "racist" is to be feared above all else. Thus universities and corporations feel compelled to fund and house diversity bureaucracies promulgating the absurdity of eliminating racism by attempting to magnify and infuse race as a factor in every human interaction....

Real racism camouflages itself in the righteousness of modern liberalism. Clothing itself in virtuous reaction to ancient wrongs, the liberal mind scoffs at the reality evinced in Patrick Moynahan's famous warning of the "dumbing down of deviancy" or as more delicately put by Bush the Younger as the "soft bigotry of low expectations." Assessing objectively the pathologies of culture and destabilizing tendencies, attitudes, and behavior are off-limits. Serious inquiries must take pre-ordained paths or else. (Trivia question: Dr. James Watson - genius who discovered DNA? or idiotic quack?) One thing is clear. Only orthodoxy will be accepted in this realm.

Deplorably, the "real" racism of the racism industry trivializes the evil of actual racism, the ethnic hatred based on skin color, tribe, religion and culture that wreak havoc around the globe. (Especially on the continent of Africa, a fact virtually ignored by complacent self described African-Americans.) If the race-baiters noticed the horrific destruction of Zimbabwe done by Mugabe, turning the breadbasket of Africa into a desolate wasteland through anti-white policies, it somehow has not engendered the outrage that a city comptroller's use of the word "niggardly" to describe budget policies did on the insensitivity scale. Actual racism fosters poverty, injustice, and war. Fake racism makes headlines.

Power and money trump racism in America by a very, very long shot. The race industry fosters influence, jobs, contracts, and suasion. The type of people, nominal liberals, who get thrills from a black-skinned President, should recognize the assumptions they bring with their enthusiasm.

Real racism in America presupposes the inadequacy of dark-skinned Americans and the inherent ignominy of whites; it reveals itself in a self-satisfied nostalgia for redemptive struggle and refusal to accept present realities.

America is a nation that has proven itself to be beyond the pitfalls of endemic and debilitating so-called racism. A civil war and a civil rights movement were the necessary purgation and trials to bear in bringing us to our present condition. It is time to delight in the common good, recognize the efforts of our forbears, and start to judge individuals by the size of their hearts and the strength of their characters." (
Source)

As Black American's we have been told "Never Forget" but somehow never forgetting has taken on a different meaning for us than it has other groups and that's unfortunate.

26 comments:

uptownsteve said...

"An honest assessment of the last election must conclude that Obama got more votes because of the color of his skin than were cast against him for it."

This is retarded.

If being black is a political advantage, why had all the previous Presidents been white male and Christian?????

Obama didn't win a majority of the white vote by the way.

Even though the Republican party had been an absolute failure for the last eight years, a whole lote of white folks could not bring themselves to vote for a change because that change was manifested in a black man.

But a more relevant question.

Why would an intelligent black woman even promote racist garbage like this column???

It defies belief.

JudyBright said...

I think from now on we shall call George W Bush, "Bush the Younger." I just like how it sounds.

I have mixed feelings about this article. I too am frustrated by those who refuse to believe that nothing or little has changed in society since the 1950s. I mean we've elected a black president, and because of this reason or that it proves nothing to people who have to hold on to their views of race in America. (As evidenced by UTS statement claiming to know the motivations of the white people who did not vote for Obama, and ignoring the high percentage of whites that did vote for him) And having protest marches about cartoons with disputed meanings diminishes true oppression going on all around the world.

But at the same time I think that Blacks and other minorities have to deal with a more subtle form of racism day to day. It's something that whites can not see because they don't see how minorities are consistently treated differently.

uptownsteve said...

"As evidenced by UTS statement claiming to know the motivations of the white people who did not vote for Obama, and ignoring the high percentage of whites that did vote for him"

But you black righties claim that blacks voted for Obama simply because of his skin color!!!!!

Is that not "asssuming the motivations" of black folks???

This is after black people repeatedlly giving their votes to white people, sometimes against black candidates.

I swear, some of you negroes belong in a padded room.

DJ Black Adam said...

"An honest assessment of the last election must conclude that Obama got more votes because of the color of his skin than were cast against him for it"

This is the single most intellectually fraudulent / Illogical statement I have heard in a LOOOONNNNGG Time. Utterly inane.

Conservative Black Woman said...

"But you black righties claim that blacks voted for Obama simply because of his skin color!!!!!

Is that not "asssuming the motivations" of black folks???

This is after black people repeatedlly giving their votes to white people, sometimes against black candidates."


Actually UTS I agree with you on this point. It is a presupposition of sorts. But I am pretty sure that the black folks that I swing with who are Christians, who worship the same Lord that I worship, and have the same convictions that I have on social issues vote for him soley, entirely, unquestionable because he is black. Now that's not all black folks. But I can say with absolute certainty that if an informed, Christian person voted for Barack Obama then it could have been for no other reason than that he is black(ish). Why else? Barack Obama stance on issues that a Christian would be concerned about are decidedly anti-christian. Some of them even said so on one of my first podcasts. They said they "didn't want to be on the wrongside of history." Yes, and you are right these very same black folks that I'm speaking of did vote for whites in the past over black folks like Micheal Steele -- I bet you even voted for the Ben Cardin, right? Well, if so then you voted based on your political convictions rather than race. Does that me you are self hating?

Conservative Black Woman said...

Excuse typo. I meant to say "Does that mean you are self-hating?"

DJ Black Adam said...

CBW:

What are you predicating your "Real Christians wouldn't vote for Barack" on?

Honestly, why should a Christian vote for McCain or Palin? because they are anti-abortion or anti-gay rights? In my opinion, the GOP, McCain and Palin did not represent Christ any better or worse than the Obama and Biden.

The right have more than enough sin, even if that sin isn't abortion or gay marriage, I am sure, if you look honestly, you could compile a serious list.

Jus saying.....

uptownsteve said...

"Yes, and you are right these very same black folks that I'm speaking of did vote for whites in the past over black folks like Micheal Steele -- I bet you even voted for the Ben Cardin, right? Well, if so then you voted based on your political convictions rather than race. Does that me you are self hating?"

No just intelligent.

Prior to becoming Bob Ehrich's running mate, Michael Steele's political experience was being the GOP chairman of Prince Georges County. Mmebership of 12.

His law license in Maryland had been suspended for awhile for ethical reasons.

He blew off Ehrlich holding a fundraiser at a segregated country club (one Steele himself couldn't attend even though he was the damn Lt. Governor) as "no big deal".

He's being investigated for campaign fraud and rumours of him and his gold-digging sister Monic Turner stealing millions from her ex-husband Mike Tyson have circulated in Maryland for years.

In other words, like most republican Negroes, he is an empty suit who brings nothing to the table but black skin and a Republican registration card.

Conservative Black Woman said...

"Real Christians wouldn't vote for Barack"

With all due respect DJBlackAdam I did not say that. Nor did I imply that.

"Real Christians" could have voted for Barack Obama. I'm not saying that any of the people that I spoke about are not real christians. I am saying when it came to this election "these folks" , my friends, family, church members voted based on race and didn't consider the cause of Christ in this election.

I'm not into sin list compiling for either the left or the right. I know where I stand as a woman of God and that's the way I vote.

Conservative Black Woman said...

DJBA & UTS~

"An honest assessment of the last election must conclude that Obama got more votes because of the color of his skin than were cast against him for it"

This is the single most intellectually fraudulent / Illogical statement I have heard in a LOOOONNNNGG Time. Utterly inane."


Unfortunately, it is not. I wish it were but many, many many black folks voted for Barack simply because he is the black guy. I just received the email below from a friend who I emailed a copy of the Obamalism video to. She pretty much says as much when she writes:

"Can't remember whether I replied on or not...but thanks for sending this.. Quite interesting, there are always two sides to most things...but it's hard for me to see the negative side of having an African-American President....I'm focusing on the HOPE that he expresses to change things around."

I didn't challenge her because it would have been futile and unkind. Better that she remain "hopeful" that things will turn around. Mind you she earns six figures, travels extensively, owns a beautiful home and vacation home on the beach, and is a very strong christian woman. So, I guess she is talking about the "economy" changing...but who knows?

conservative brother said...

When the white liberal cartoonist Ted Rall drew a racist comic about Condi Rice, the NAACP and the rest of the racially oversensitive hysteria crowd said absolutely nothing. If anything, they thought the cartoon was funny. This has more to do with "selective outrage" more so then anything else. I say let the bottom feeders cry a river. Obama hasn't said anything about the comic one way or the other, yet everybody else is claiming to be "offended. Give me break.

JMK said...

"An honest assessment of the last election must conclude that Obama got more votes because of the color of his skin than were cast against him for it."
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While that is indeed true, I don't think that was the primary factor in this election.

The government caused and private sector exacerbated credit crisis occured on G W Bush's watch ad despite the major rolls played by Chriss Dodd and Barney Frank, it hurt the GOP far more.

That was compounded by the GOP nominating a non-charismatic, non-Conservative to be their standard-bearer. McCain ran an astoundingly incompetent campaign virtually geared to lose.

Many have noted that given the economic realities of September and October, Romney would've been a far better candidate.

I liked Romney a LOT (didn't much like McCain) and I believe he'd have gotten a lot more support than McCain, though I think the tide was not in their favor.

NOW, as the chronology of the global credit crisis becomes clearer and the roll of government becoming clearer, more people are realizing that we have an administration that's pushing MORE government spending and meddling in the economy as a solution to a problem primarily caused by excessive government spending (Bush spent wildly, especially over the last four years, most especially over the last two) and it was meddling in the economy (1) loosening lending standards and (2) backing/guaranteeing bad (high-risk) loans at taxpayer expense via the GSEs (Fannie & Freddie)...those disastrous policies have only been ramped up.

I think it's clear that Barack Obama's skin color DIDN'T hurt him at all in 2008, that's both very positive and very obvious.

How much it helped him, is open to question. Ideally, ethnicity should be neither a positive nor a negative.

DJ Black Adam said...

Unfortunately, it is not. I wish it were but many, many many black folks voted for Barack simply because he is the black guy.

And many MORE white people voted against him because he was black, I'd bet for every black person that voted for barack because he was black at least 5 white people voted aginst him because he was black.

The whole line of logic here is fraudulent. People, we should at least be able to disagree on a intellecually HONEST playing field.

DJ Black Adam said...

@JMK:

"(2) backing/guaranteeing bad (high-risk) loans at taxpayer expense via the GSEs"

Balderdash. Banks knew what they were doing, and they weren't doing it because of guaranteed loans, these were generally convential and very creative ways to lend money and cahrge high fees, THEN to bundle loans THEY KNEW WERE RISKY into supposedly SAFE Marketable Securities.

Amazing you all refuse to see that and whnt to blame this on poor folks or folks with bad credit getting mortgages, simply amazing...

DJ Black Adam said...

@CB:

" Obama hasn't said anything about the comic one way or the other, yet everybody else is claiming to be "offended. Give me break."

Well, it offends me, simple as that. If it don't offend you, obviously you have a different sociological make up and we have to agree to disagree.

Conservative Black Woman said...

DJBA you wrote:
"And many MORE white people voted against him because he was black, I'd bet for every black person that voted for barack because he was black at least 5 white people voted aginst him because he was black.'

I don't deny that some whites didn't vote for Barack Obama just because he is black..but I have no way of knowing how many. How can you be so sure that many of the whites who didn't vote for Barack Obama simply didn't agree with his politics and political and social ideology? Is that outside of the realm of possiblity in your opinion?

Zabeth said...

If anything, I think the fact that Barack Obama is black actually helped him in this election.

JMK said...

"And many MORE white people voted against him because he was black, I'd bet for every black person that voted for barack because he was black at least 5 white people voted aginst him because he was black." (DJBA)
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Well, IF that were true, in this nation that IS 72% white, Barack Obama wouldn't have won the election.

In fact, Barack Obama won among whites....just not by the eye-popping 96% margin he did in one community.

JMK said...

"Banks knew what they were doing, and they weren't doing it because of guaranteed loans, these were generally convential and very creative ways to lend money and cahrge high fees, THEN to bundle loans THEY KNEW WERE RISKY into supposedly SAFE Marketable Securities." (DJBA)
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No, you're looking at the feeding frenzy, NOT what triggered and caused that feeding frenzy to occur.

Banks and mortgage brokers had kept to traditional lending standards because they WORK.

Until the mid-1990s you needed 20% down, couldn't mortgage more than 2 1/2X your annual income and lending was tied to both your debt-to-income ratio AND your credit scores, which reflected some of that same dynamic.

Both Bill Clinton and G W Bush pushed hard to expand home ownership to more Americans (a laudable goal) and minority home ownership improved greatly under Clinton and skyrocketed under G W Bush.

Bush adhered to the Jack Kemp doctrine of "The Ownership Society," which postulates that, "Since home owners tend to be more responsible, more goal oriented, more productive and ultimately more Conservative in their outlook, increasing home ownership will increase the number of responsbile Conservative voters," a good-natured, if cynical means to swelling the ranks of Conservatives.

But Kemp's theory was based on some very flawed reasoning! Along the lines of the "poverty causes violent crime" argument - they both got it exactly backwards.

Neither home ownership nor poverty CAUSE anything.

Owning a home does NOT make people more responsible, it's that more responsible people tend to take on the responsibilities of home ownership!

Likewise, people aren't violent because they're poor, as less than 2% of the poor are ever violent. No, it's violence, or more aptly, the traits that lead to violence (poor impulse control, recklessness and irresponsibility) that lead to poverty.

At any rate, the government began pressuring the GSEs (Fannie and Freddie) to change the lending parameters and to take on (BUY) more high-risk debt in order to fuel the expansion of home owenership.

ONLY when the banks saw the GSEs buying up subprime notes that were over-leveraged (as high as 120% of the home's valuation) did the spigget open and the banks and mortgage brokers went hog wild.

Everyone was in on this...the banks began giving out "Liar's Loans" ("tell me you make $200 grand, I'm not gonna check") and other "born-to-fail vehicles to max out their up front fees.

That's why, as the default rates began to balloon, the federal government first began infusing cash into the GSEs (May 2008), then in early September, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA.

The reason that was done was because, as of 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half of the U.S.'s $12 trillion mortgage market and over 90% of the new (high-risk) mortgages, where they'd traditionally owned/backed around 1/3 of the mortgages!

But taking over Fannie and Freddie wasn't enough by then.

Too little....too late.

Companies that weren't even dircetly exposed to subprime loans went down. For instance, insurance giant, AIG was brought down due to its exposure to some toxic Credit Default Swaps (a sort of insurance policy for larger brokerages, like CitiBank, Lehman Brothers and Bear Stearns) backing their leveraged risk.

In effect, AIG had bet that Lehman Brothers and Bear Stearns would never run aground, a bet that looked solid even in August of 2008, but by September, with the default rates climbing and the fed realizing it couldn't back all the bad debt that Fannie and Freddie had bought, we entered a global credit freeze that still threatens to undermine the entire global economy.

While there were numerous bone heads in the private sector, like former 60s radicals turned bankers (Herb and Marrion Sandler) of World Savings, who'd floated more bad/high-risk loans than almost anyone else, seeing their deferred interest rise from $24 MILLION in 2000 to over $121 BILLION in 2008...none of that happened in a vacuum.

The Bush administration's pushing the Kempian "ownership society" and Frank and Dodd pushing the GSEs to buy/guarantee more and more high-risk debt created the environment in which the self cannibalizing, private sector feeding frenzy happened.

Ultimately, business has one priority - to make money, to increase profits and to enrich its shareholders.

Government has other priorities - expanding home ownership, for instance, if you're a Keynesian Republican, like GW Bush and his Dad were.

What's worse is that government is peopled by lawyers, most of whom don't know anything about business....ANY business.

When the government gets involved in business, whether its regulating lending guidelines or mandating warning labels on music, it invariably gets it wrong.

If you're lucky, like in the case of those warning labels, the results are merely pesky, if you're not, as in the case of the government meddling in lending parameters, the results can and often are quite disastrous.

Anonymous said...

One core problem with your assumptions: "righties" don't only think black people voted for Obama because he was black. I'm sure plenty of white people did too. I'm white and conservative and I was tempted to vote for Obama based on race, because of the warm, fuzzy feeling I rightly predicted everyone (well, almost everyone) would get at the US electing its first non-white president, and because it would make the world think Americans didn't care about race. I voted for McCain in the end, but I'm sure some people gave into the temptations I listed. Besides, there was fear-mongering that if Obama lost, there would be race riots (in other words, if you don't vote for Obama, you'll screw up race relations)

Besides, many people support affirmative action, which is giving jobs to minorities to compensate the unlevel playing feild even if they are less qualified. It's possible this philosphy would extend even to the presidency.

If this was the 70s or earlier, I'd agree it's absurd to say being black is more of a help than a hinderance in the election. But this is the 21st century.

I think Obama would have won regardless of his color, but I still believe more people voted for him because he was black than against him because he was black.

-Dennis

DJ Black Adam said...

@JMK:

JMK:

I have been a commercial real estate lender and realtor for 15 years, so let’s review what you are positing with that in mind:

You wrote: “Banks and mortgage brokers had kept to traditional lending standards because they WORK.”

They sure do, I don’t think Bush or Clinton urged banks to do loans that were in excess to debt to income standards. Banks felt they could make MONEY as finance companies did charging absorbent fees and setting high interest rates by ENCOURAGING new homeowners to purchase homes predicated on their credit score (which even for the poor generally wasn’t bad) as opposed to their income, by creating loan programs under the guise of “Community reinvestment”. Sure the consumer shares the blame, but you are being disingenuous by trying to take away the blame that the LENDER had and have.

The consumer can say they may have not known better, the LENDER should have and DID know better.

Let me break this down to the bone gristle as Method Man says:

Let me explain in a bit more detail: Lenders didn’t relax anything, at least banks didn’t, what banks actually did was purchase and create mortgage companies to capitalize on making loans to poor people and other people that they charged excessive fees and interest on: “Banks did stupid loans because they were making RECORD PROFITS off of these stupid loans: i.e. No Income verification loan, No doc loans, etc., because they felt the worse case scenario is that they’d foreclose on a $200,000 house loan to have a house now worth $250,000.00".

When the market went south, that solution was no longer viable. NONE OF THIS HAPPENS WITHOUT LAX STANDARDS IN BANK REGULATIONS that lead to banks being able to have these arraingments. This would have been bad enough, but the fact that mortgages they new damn well were shaky were put to be sold in marketable securities.

Fact is, making loans to poor people is rather simple if one wants to do it responsibly. 1, you need affordable houses, 2, you need to do the loan based on ACTUAL INCOME (what a concept), many poor people had decent credit scores, but to allow a program that approves people with decent credit scores (620 and above) that DOES NOT VERIFY INCOME, is criminally negligent at the least.

Statistically speaking, if a person shows that they pay their rent, they generally pay their mortgage; affordable housing makes affordable mortgages, simple as that.

Human greed is the cheif predicate here, sure the greed of some of the individual homeowners is part of this, and as such no one was championing bailing out thes ehomeowners, however; Human greed is often ignored when talking about Coroporate America or the free market, so maybe if we remember that Corporations are run and owned by alot of humans, we might grasp the concept that they cannot run unchecked, as they have under Reagan’s derugulation, President Bush, Bill Clinton and the REPUBLICAN CONGRESS, the current President and HIS Republican congress.

Again, let me break this down:

1. Bank does stupid sup-prime loan with “no income verification for $300,000 house

2. Bank puts loan in pool of loans and sells as marketable security

3. Investors make big money off of the dividends supported by the mortgage rates

4. Buyer pays Mortgage for 12 -24 months, all of a sudden loan adjusts, buyer can’t pay, buyer gets foreclosed on.

5. House now has a balance of $298,000 BUT low and behold house is now worth $330,000

6. Bank does another stupid sub-prime loan with “no income verification”

7. Bank puts loan in pool of loans and sells as marketable security

8. Investors make big money off of the dividends supported by the mortgage rates

And it goes on and on UNTIL:

9. Buyer pays Mortgage for 12 -24 months, all of a sudden loan adjusts, buyer can’t pay, buyer gets foreclosed on.

10. House now has a balance of $328,000 BUT low and behold house is now worth $295,000

11. UH OH!!!

See what we have here? Corporate greed and now, the Chickens have come home to roost.

uptownsteve said...

JMK

"In fact, Barack Obama won among whites....just not by the eye-popping 96% margin he did in one community."

LIE.

Most whites voters went for McCain.

Obama only got 42% of the white vote.

http://voices.kansascity.com/node/2709

uptownsteve said...

DJ Adam

Great Post.

JMK said...

“I have been a commercial real estate lender and realtor for 15 years, so let’s review what you are positing with that in mind:

“You wrote: “Banks and mortgage brokers had kept to traditional lending standards because they WORK... They sure do,” (DJBA)
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Not ONLY do they work, I’ve taken out eight mortgages over the years, the last one, back in 2005, when the lending standards were relaxed. My wife and I had already computed the maximum amount of the loan we’d be able to take out based on those old formulas.

We were told that we could get THAT loan on either one of our incomes. I suppose, WITHOUT being able to pay the taxes, utilities, car payments, insurances and other living expenses we have.

Do I now feel at all sorry for people who were told that same line and fell for it, not doing the math for themselves?

To be honest, not really, but that’s NOT the issue I addressed in that above post. I was commenting on the role of GOVERNMENT, NOT on the role of consumers/borrowers in the subprime mortgage meltdown.

Still the larger point is, where did those new lending parameters come from?

If it came from the private sector, we’re postulating that suddenly and for no reason at all, the usually wary, fiscally conservative bankers and private equity firms managers suddenly became a lot less risk averse in a vacuum!

That doesn’t make any sense on its face. If that were going to be the case (bankers abandoning what worked for a more high-risk, untried set of parameters) our banks would’ve done all this years ago and melted down the mortgage industry decades earlier. Of course, that didn’t happen.

BUT Banks are largely risk-averse, and as such they tend to eschew such high risk ventures absent being able to guarantee that risk.

As Pete Schiff has said, “Everyone wants to make money, but everyone is also afraid of losing what he has. Although few would ascribe their desire for prosperity to greed, it is simply a rose by another name. Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy.”

Banks, mortgage brokers and private equity firms responded to the governments push to loosen credit, to the fed holding the prime lending rate at a ridiculous 1% for far too long, creating a “cheap money atmosphere” that was ripe for “credit socialism” – the creation of credit (a form of wealth, linked to savings) out of thin air. The role of the GSEs in guaranteeing/buying these new loans was key to the eventual self-cannibalizing feeding frenzy.
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“...I don’t think Bush or Clinton urged banks to do loans that were in excess to debt to income standards. Banks felt they could make MONEY as finance companies did charging absorbent fees and setting high interest rates by ENCOURAGING new homeowners to purchase homes predicated on their credit score (which even for the poor generally wasn’t bad) as opposed to their income, by creating loan programs under the guise of “Community reinvestment”. (DJBA)
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Actually BOTH G W Bush AND Bill Clinton did exactly that...along with Congress.

BOTH the Bush and Clinton administrations pushed hard for new lending requirements and Bush himself signed onto legislation that allowed 0% down on mortgages. That legislation allowed FHA mortgages to finance 100% of a property’s value and for Fannie Mae and Freddie Mac to buy/guarantee those high-risk mortgages.

While the government DID NOT come up with the insane “Liar loans” or other ridiculously overleveraged loan packages, it DID create the environment in which that HAD TO happen.

The mechanism by which the government backed/guaranteed mortgages was its GSEs (Government Sponsored Entities) like Fannie Mae and Freddie Mac.

Traditionally, Fannie Mae “owned” (bought) appx. 1/3 of the U.S. mortgage stock. That relieved the banks and mortgage brokers of some of the risks involved with various FHA loans, etc., usually to first time home-buyers.

As of 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half of the U.S.'s $12 trillion mortgage market and well over 90% of the new (high-risk) mortgages!

In short, the banks and mortgage brokers didn’t suddenly become any LESS “risk averse,” they became pigs once the government foolishly decided to buy up (GUARANTEE) those subprime mortgages via its GSEs.

As I said BOTH government and the financial sector (private equity firms, banks and brokerages) are at fault, but far from the conventional idea that “The banks got greedy and screwed America,” it’s actually, “Government came into the mortgage market with good intentions and passed a lot of ill-conceived legislation that ultimately created a self-cannibalizing feeding frenzy that resulted in the current and ongoing global credit crisis.”
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“Sure the consumer shares the blame, but you are being disingenuous by trying to take away the blame that the LENDER had and have.” (DJBA)


Actually, I DIDN’T blame the consumer at all in the above scenario that puts the crisis at 4 parts government and 1 part private sector greed.

You DO bring up a very good point and that my above assessment is far too simplistic, as it doesn’t take into account all the responsible parties.

On a scale of 10 parts, I’d say the crisis is at least 5 parts government action (probably 6), 2 parts private financial sector excesses and anywhere from 1 to 3 parts consumer stupidity.

The reason, I give greater latitude to consumer stupidity is that the amount of blame depends on one major factor – the role of various community housing organizations (like ACORN) in this has not been calculated at this time. While I feel real sympathy for the widow highlighted in last week’s (2-15-09) 60 Minutes, whose husband had died, getting a mortgage and 3 annual re-fi’s all based on her dead husband’s non-existent income (still stupid, but pitiable), the role of various housing groups that pressured and sued banks to give more subprime loans, lobbied government to extend pushing for new lending parameters, etc. is something I haven’t looked at closely enough up to this point.
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“The consumer can say they may have not known better, the LENDER should have and DID know better.” (DJBA)


No, there’s NO WAY for any free person, with “free” meaning self-owning and self-RESPONSIBLE, to claim that the foundation of the market Caveat Emptor or “Let the buyer beware,” does not impact their every purchase.

The fact that there are many, MANY reckless and irresponsible people in the country does NOT undermine Caveat Emptor, nor make the market, which does seek to separate fools from their money, at all “predatory.”

But again, my initial post says NOTHING of the consumer’s role in all this...a glaring oversight on my part, which you’ve brought up and I do appreciate that.

As for the private sector, once that atmosphere of loose credit and “cheap money” is created, any banks, brokerages, etc. that don’t take advantage of that, are going to fall far behind those who are over-profiting, exposing them to buyouts and takeovers. If any group had little choice, it was the banks, brokers and private equity firms.

What I’ve been MOST concerned with has been GOVERNMENT’S role in the crisis...and that roll was HUGE!

DJ Black Adam said...

@JMK:

"The fact that there are many, MANY reckless and irresponsible people in the country does NOT undermine Caveat Emptor, nor make the market, which does seek to separate fools from their money, at all “predatory.”"

Correct, which is why the governmenet should have MAINTAINED consumer protections against financial institutions that were put in place by FDR and reversed from Reagan to Bush 2.

Fact is, corproate greed is the primary predicate, unchecked by government.

Corporate greed and wilfull deciet played on consumer greed and willful ignorance.

The former, can, had and will again be REGULATED.

Jus saying....

JMK said...

"Fact is, corporate greed is the primary predicate, unchecked by government.

Corporate greed and wilfull deceit played on consumer greed and willful ignorance. (DJBA)
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That argument is beneath you DJ. It is far too simplistic.

We ALL embrace "greed" in its many forms, from the woman who shops around for a better bargain at the market, to the family that seeks lawn service at the lowest price to businesses that offer the goods and services we all buy seeking to maximize profits.

In essence, “Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy.”

As I said (and now UTS has kindly posted a Steve Rosenbaum article that says the same), GOVERNMENT action created this current global credit crisis.

The Commodity Futures Modernization Act was passed with both Clinton's and Greenspan's blessings.

Bush happily signed onto the 0% down for FHA mortgages.

Fannie Mae not only INCREASED its share of the mortgage market it bought/GUARANTEED FROM appx. 1/3 to about HALF....a HUGE increase, it also bought a huge share of these new, high-risk, subprime loans, signaling to banks and brokers that "the floodgates were open."

THAT'S how government created the credit crisis.

What the private sector did (once it was assured it could lay that risk off on the government/taxpayers) was to EXACERBATE the problem by writing a blizzard of that kind of bad debt. THAT was outrageous and wrong. It was also almost unavoidable once that self-cannibalizing feeding frenzy got started.

Your separate argument that the people have to be protected is, at its core, an argument against individual freedom.

In its essence your argument is "that too many people are just too stupid to deal with freedom."

I disagree.

Well, not about there being a LOT of stupid people around (there are and always have been), but that (1) they deserve government/taxpayer protection and (2) government owes that to them.

The ONLY way to really protect such people is under a police state and I can't emphasize enough how much you and I would NOT like such a scenario.

As an example, when I got on the FDNY almost a quarter century ago, we did NOT force doors when people called for medical assistance and did not answer, UNLESS there was evidence they were home...and we did NOT assist the police in forcing entry to and setting up rigging to say, grab a suspect hiding in a restaurant's duct work or chimney. Earlier generations of firemen had too much respect for the rightful limits of government agencies and did not forsake such for the sake of expediency.

My Dad's WW II generation were those guys.

In the course of my time, I've supported those intrusions because (1) it expanded the scope of our duties and (2) erred, in my view, on the side of the greater good.

Today, the FDNY routinely forces doors when a caller doesn't answer for EMS and if you got a ride from a family member and subsequently try to sue, good luck with that, the city can drag that on forever and besides, the new protocol is excused under "providing assurances of proper patient care."

As for assisting the police, that too has become a part of our duties due to our "peace officer" status in the State of NY.

My Dad went to his grave disagreeing with me over that issue and as I've come to see it more and more abused (firefighters seeing contraband on table after forcing their way into an apartment they'd been called to, but where the occupant is no longer home and having the guy locked up) I believe he was more right than wrong...even though nothing untoward may be done by the firefighters in such instances, it creates a much colder and sterile (police-state like) environment.

It's the same thing with protecting people over loans that THEY apply for, or products they buy.

I read the consumer evaluations and I know the return policies concerning defective equipment, so I've never needed the government's consumer protections...nor should any reasonable person.

Companies generally don't want to sell defective merchandise and are more than willing to accept returns on such.

On loans, a mortgage is a HUGE step. It's, in effect, "signing your life away", or at least your life's worth in terms of your income, in exchange for a piece of property.

Home buyers SHOULD have an attorney representing them....I have in all my transactions and I CAN and DO read all the fine print on those docs.

Like I do, NO ONE should come into a bank or mortgage broker NOT KNOWING the amount of a loan that they'll be comfortable paying back.

If you earn $125,000/year, you SHOULD know that the max mortgage you can afford, at 6% is appx. $300,000, depending on your living expenses.

Someone with no car note and no credit card debt could probably go a bit higher, while someone else with a $300/mth car note and $5,000 worth of credit card debt should probably borrow less.

The math isn't very hard!

Is it foolish for bankers, in an age of lax standards, due to Fannie Mae's buying/guaranteeing the bulk of the bad debt, to encourage borrowers to borrow more and borrow recklessly?

Well, it's certainly NOT "acting against their own self interest," as the fed is backing all that bad debt and shielding those institutions from the consequences of those bad actions...so it's not ETHICALLY wrong. It IS, very MUCH acting "against the interests of your customer" and that is certainly MORALLY wrong, despite it's being perfectly legal.

The fact, for instance, that the federal government DID NOT invent the "Liar's loan" does not excuse its far larger role in loosening lending practices and having more and more of the bad debt written, in effect underwritten (bought/guaranteed) by the GSEs.

To protect people from themselves government must do far more than merely regulate the banks. It'll have to increasingly regulate and micromanage people's lives as well.