Alex Blaze

Racism: The conservative solution to the financial crisis

Filed By Alex Blaze | September 28, 2008 4:30 PM | comments

Filed in: Living, Media
Tags: African-American, bank robbers, financial crisis, latinos, LGBT Latinos, Mexican Americans, Michelle Malkin, mortgage, Neil Cavuto, racism, Rick Perlstein, subprime lending

This shouldn't be entirely unexpected, since every time there's a major problem conservatives find some way to blame it on a certain ethnic, racial, or religious group. Now they're looking for any minority to blame for what's really the absolute failure of their economic policy.

The very last thing they want the American people to see right now is that a bunch of rich, mostly-white people got together and worked the system so cynically and for so long that now they're asking for a $700 billion hand-out to put the cherry on top of their epoch-making hustle. So they'll search for someone else to blame and hope it sticks.

A few examples of conservative talking heads blaming the crisis on minorities are after the jump. They're hoping the general equation many Americans operate under, "White = Safe," will prevent closer examination of the problem. Because it's just such a complicated financial skigamadoo, some people might actually fall for Michelle Malkin, Neil Cavuto, and The National Review saying that it's all really just the fault of dangerous minorities.

Here's Michelle Malkin, blaming it on Hispanics because they just didn't pay their mortgages:

The Mother of All Bailouts has many fathers. As panicked politicians prepare to fork over $1 trillion in taxpayer funding to rescue the financial industry, they've fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers, and minority home ownership mau-mauers (can't call 'em greedy, that would be racist) for blame.

But there's one giant paternal elephant in the room that has slipped notice: how illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis.

It's no coincidence that most of the areas hardest hit by the foreclosure wave -- Loudoun County, Va., California's Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters -- also happen to be some of the nation's largest illegal-alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.

Yes, the problem is all those goddamn illegals crossing the border and building McMansions in the exurbs.

The whole article is a piece of work. Like a complete racist, she doesn't know the difference between undocumented immigrants, Mexican Americans, and Hispanics. She slips between them, because of course every Hispanic in America is undocumented and comes from Mexico.

Mark Krikorian, over at The National Review, takes another tack in blaming Hispanics: Washington Mutual went under because it hired too many. Here's Glenn Greenwald commenting:

National Review's Mark Krikorian notes that (1) Washington Mutual became the largest bank to fail in American history yesterday and (2) its last press release touted the fact that it was named one of America's most diverse employers, having been "honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations"; for being "named [one of] the top 60 companies for Hispanics"; for "attaining equal rights for GLBT employees and consumers"; for having "earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups"; and for being "named one of 25 Noteworthy Companies by Diversity Inc magazine and one of the Top 50 Corporations for Supplier Diversity by Hispanic Enterprise magazine."

While juxtaposing these two facts -- (1) WaMu has a racially and ethnically diverse workforce and (2) WaMu collapsed yesterday -- the National Review writer headlined his post: "Cause and Effect?" He apparently believes that the reason Washington Mutual failed may be because it employed and was too accommodating to large numbers of Hispanics, African-Americans and gays.

And here's Neil Cavuto, chastising Congressman Xavier Becerra because Congress didn't warn lending agencies not to give money to "minorities and risky folks":

iPhone users: Click to watch

Rupert Mudoch's Wall Street Journal took a similar position, except it went on, at-length, blaming Congress's penchant for "affordable housing." It's a bit more abstract, but the op-ed is definitely borrowing the language of white resentment that surrounds affirmative action programs:

If they were not making mortgages cheaper and were creating risks for the taxpayers and the economy, what value were they providing? The answer was their affordable-housing mission. So it was that, beginning in 2004, their portfolios of subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.

The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.

Rick Perlstein identifies the notion of blaming Freddie Mac and Fannie Mae for this crisis as racist. It makes sense, considering that even if they didn't exist, we'd still be in this mess. But conservatives are rallying around blaming two firms that served minority clients.

Then again, in an even more abstract sense, the way the solution to this crisis is being posited is racist and classist in and of itself. After years of denying basic funding to programs that help out lower-income folks, saying again and again that they were too expensive and that the people receiving them couldn't be trusted, Henry Paulson is asking for $700 billion to effectively give to a small group of people who are rich and mostly white and have proven themselves to be completely irresponsible with money.

And what's the reaction from the same people who can't be bothered to enact a food stamps program for fear that that money will get "wasted" on lobster (imagery of fictional welfare queens comes to mind)?

It may not seem this way, but Americans are a lucky people.

Last week, we did our best to destroy the financial system but somehow came through it. This week, Congress will have only 72 hours to ruin the Treasury's $700 billion mortgage plan before it recesses.

If our luck holds, Hank Paulson will get the extraordinary authority he seeks. If we are really lucky, Paulson may actually fix the mess we have made. So why not give him whatever he needs?

Of course, it is easy to be outraged by the Treasury's bail-out proposal. Lots of money. Lots of power. Naked, ugly dictatorial power.

"Decisions by the Treasury pursuant to the Authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Such language could have been drafted by any Third World caudillo.

But it wasn't. It was drafted by U.S. Treasury lawyers at the behest of the Secretary of the Treasury.

And Paulson isn't any Secretary of the Treasury. He doesn't need power. And he certainly doesn't need money.

Of course, he isn't a saint or Superman. He is awkward and an awful public speaker. But he is the one man that can serve as an honest broker between the banks and the taxpayers-between Wall Street and Washington.

He can do the right thing for the country. How many other people on Wall Street or Washington can we say that about?

Well, we could say it about all of them, again and again, if we wanted to.

That's the right-wing response to someone who's proven that he doesn't understand the current financial crisis asking for money to just hand out to a bunch of rich, mostly white men who've proven that they can't handle.

Compare the fact that the bailout is supposed to be instituted with no judicial or Congressional review with this story from a few days ago (keep in mind that food stamp spending projected for 2008 is about 5% that of the proposed bailout):

The Michigan attorney general's office has announced 22 arrests in connection with an investigation of food stamp trafficking in Detroit.

The raid of nine gas stations and convenience stores resulted in the recovery of more than $100,000.

Attorney General Mike Cox announced the arrests today. He says the yearlong probe uncovered that food stamp benefits were being exchanged for cash.

State and federal authorities worked on the investigation. Both store owners and employees face charges ranging from racketeering to conspiracy. Some face up to 20 years in prison if they're convicted.

I wonder how many businesses will be raided to prevent any fraud when it comes to the bailout!

It's insane how the business class, after building decades of distrust towards those who receive relatively minuscule amounts of money from social programming, is asking us to simply trust Paulson and these bankers. The difference isn't just class privilege, but white privilege, considering how imagery surrounding welfare reform constantly drifted off into racial territory.

According to Republican strategist Lee Atwater, the right-wing point of view on social spending actually started on racial lines:

You start out in 1954 by saying, "Nigger, nigger, nigger." By 1968 you can't say "nigger" - that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites.

And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me - because obviously sitting around saying, "We want to cut this," is much more abstract than even the busing thing, and a hell of a lot more abstract than "Nigger, nigger."

All that white privilege that Wall Street bankers are trading in right now makes the fact that conservatives are looking for some way to pin this all on minorities even more sick.

Besides that, pinning the blame on borrowers is just another distraction. Sorry, if a bank gives out a loan to someone they know won't be able to pay back because they know they'll get a profit by selling that loan in a bond and then selling credit default swaps on it, it's the bank's fault. They said they shouldn't be regulated because they could handle it themselves, so this is either their own problem to fix or we admit that they can't be left with so little regulation and that they're too important to the economy to be left to their own devices.

But that doesn't help the wealthy people who profited from this mess, so they search for a scapegoat. I don't know if we're going to go down that path in America. Considering what happened when other economic crises in history got blamed on a minority, it's not going to be pretty if we do.

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Wow, great job making these comparisons, Alex. This whole mess is just infuriating!

Alex, I think that the term reactionary is more accurate than conservative in this case, because there are plenty of liberals who harbor patronizing attitudes, and that's just another form of racism. And there must be a dozen or so conservatives who aren't racists. Maybe as many as fifteen.

Racism had it’s origins in the slave trade and is as old as the European invasion of North American. A year before the landing at Plymouth Rock a ‘cargo’ of 20 African slaves were landed in Virginia. A lot of people don't know it, and certainly it's never mentioned in school books or by jingoists but racism was invented by Europeans and American Colonists to justify slavery and the horrors of the slave trade.

From 1638 until 1865 as many as 10 million slaves were kidnapped and shipped to American colonies. The slave trade caused a terrible loss of life that probably exceeded the horrors of our time. Millions may have died being kidnapped and on the slave ships. The depopulation and chaos created by the European and later American slave trade was enormous: it shattered the once vibrant African states centered on the Niger, Senegal and the Congo. In Swahili it was called the Maffa, the ‘great disaster’.

In English North America preachers were urged to justify this barbarism and they began soon to sermonize of the god-given inferiority of Africans. They used the myths of Ham and Cain and one demented cultist even claimed that Africans were the descendents of Nacath, the snake-devil who tempted Eve in the creation myth. Where religion leads, the law soon follows. In 1663 the Maryland Assembly passed a law that legally described African as ‘perpetual servants’. Soon laws were passed in the other colonies forbidding intermarriage, legalizing the torture and murder of African slaves, annulling their baptisms and making it a crime to teach African slaves to read and write.

Racism is still a money maker for non-union businesses that want to pay lower wages and sell predatory mortgages. Incidentally, that’s one of the reasons the real ENDA was important – before the Democrats gutted it to please the Chamber of Commerce it would have vastly opened up the possibilities to sue for redress for everyone, not just the LGBT communities. The gap between the incomes of African Americans and imported workers and Euro American workers is still very large. With that shameful history the idea that African Americans or immigrant and imported workers might now be used as scapegoats to deflect attention from the economic chaos created by the corporate rich and their political lapdogs is adding another massive insult to massive injuries.

Transformations in Slavery Paul Lovejoy Cambridge University Press, 2000

Slavery: A World History Milton Meltzer Da Capo Press, 1993 This is a link to the Southern Poverty Law Centers analysis of ‘Coloring Crime’. The SPLC are the folks who broke the back of the KKK with a series of landmark lawsuits that led to the confiscation of their assets to compensate their victims.

When is Lambda Legal or the NCLR going to do that to the baptist, mormon, and catholic cults. Unfortunalty the Congress won't permit us to sue them so we can't go after them for DOMA. DADT and what that quisling Frank did to ENDA.

Reactionary, definitely for Michelle Malkin. But I don't know so much about the WSJ and TNR. I think that they're just straight up conservative.

What's wrong with this is that's where it's starting. In a few more months, I wouldn't be surprised to be hearing the supposedly "progressive" crowd out there on this one.

That's a very shrap comment, Alex.

Everyone's busy but let me recommend a little light reading about your comment.

1) The Day Freedom Died: The Colfax Massacre, the Supreme Court, and the Betrayal of Reconstruction by Charles Lane by Henry Holt and Co. March 2008

2) The Dark Valley, a Paorama of the 1930's by Piers Brendon by Knoph, Spring 2000.

Especially the secions on economic collapse and the rise of fascism, becasue that's exactly what you're taking about. Anti-Black and anti-Latino racism, union busting, islamophobia and homophobia will be the watchwords of the new right as it emerges, not anti-semitism.

You are right. Whitey's are the problem and the government they formed in 1776. The U.S. government must print up more treasury bills and give them to minorities to pay the mortgages. All African Americans should get repatriation from the government due to the oppression of slavery, including poor Stan O'Neal, the former CEO of Merrill Lynch. Winning a Presidency as an African American is not enough, especially if he wins because of educated whitey's voting for him.
Racial anarchy that your propose is the only answer. Bring the corrupt government down, burn baby burn.

Wow. You named one black person who was part of this problem. I'm overwhelmed.

Seriously, though, are you arguing that economic disparity doesn't have a racial element? Are you saying that the average black income is the same as the average white income?

And how do you defend comments like Malkin's?

While you were tying to be humorous Charles,
it ain't funny when you have to look through property records to find your ancestors.

You seem to know more about my ancestry than I do. Tell me more. BTW, who the fuck are you ?

Who said I was trying to be humorous? I want anarchy. My ass is going to be locked up in prison for not filing income taxes out of a protesting the Federal Tax Code for discrimination against same=sex marriage.
I want the same Federal rights as hetero's to leave my husband my estate tax free. As it is now, he will have to pay over 59 per cent in estate taxes of my estate when I die. I am now 74. I want to see the U.S. government on it's knees. I don't want to make a living will because it has to be funded and it can easily be broken by other family members.

Robert Ganshorn Robert Ganshorn | September 29, 2008 12:45 AM

Charles, visit a lawyer, an accountant, set up an "S" corporation or trust and don't be rude to Monica. your problems are hardly her fault. You are old enough to act like a gentleman and should know better.

Yep, when paper passes through a bank someone makes money (whistling here....) and why would they loan money otherwise? Regulation is everything and welcome it back.

In my largely Hispanic neighborhood in Chicago I was thrilled to see trim new houses and renovations invade our previously blighted streets. I was happy to see the variety of people and sit in my rear yard and hear the strings of a Spanish guitar played by my neighbor. They worked hard and formed strong family units and they are going to continue to progress as surely as viewers of Fox news are going to die off.

And every new house taking the place of urban blight encourages everyone who lives on these American streets.

Part of progress is waiting for people with rusty old ideas to die off. They can run to Montana, or Northern Wisconsin if they like, but they are dieing off.

Americans are lucky people. We can make economic mistakes that would destroy virtually any other economy and turn on a dime and repair them. New taxes for the wealthy are en route and the handling of this crisis assists the liberal agenda.

The lady was getting personal towards me and my ancestry and I don't appreciate it. I am talking about tax money used in bailouts to both the greedy white/black priviledged on Wall Street and paying off foreclosure costs for minorities who never owned the house in the first place.
Why should tax payers pay for either ? About going to a lawyer or accountant. I am fighting an injustice regarding who pays taxes and who doesnt. I am in an unique position to have lived long enough and have an heir by marriage, my husband. I am looking out for his interest as well as the interest of other gay married couples. A marriage license is iron clad, and can't be broken except through divorce. Why should married gay men in California have to see lawyers to get the same Federal marriage rights as other citizens?

"personal towards me and my ancestry and I don't appreciate it"? I don't think she was meaning to insult black people in her comment.

Unless you're white, and you're saying that her comment about black people being enslaved is an insult to the white race? Well, insulting or not, it's what happened.

I don't really see the connection you're making between this situation and marriage. But when we start with the line of argument "Why should I pay for..." the only end I can think of to that is "Why should I have to pay more taxes to offset the benefits you receive from your marriage?"

And, of course, the reason is because when you need a break you deserve it, but when someone else does they don't.

Getting the same Federal tax breaks as straights is equal justice under the law. Why should you approve of tax benefits to gay couples ? Maybe the subject is too deep for your comprehension.

Bush tumbled out of bed early today to give another doomsday blurb to the networks, quickly walking away before reporters could ask any questions. The fear-mongering that is pushing this huge giveaway is reason enough to hold up the bill and scale it back. I see nothing in it that would prevent a repeat of the entire scenario. How about requiring banks to hold onto a certain percentage of the mortgages they originate, instead of re-selling them for quick profits and no responsibility for managing the loans? Also, no one is talking about the FDIC, which has less than $50 billion left, enough to handle maybe only 10 or 20 bank failures. The bailout should include a loan to FDIC until the agency can replenish its reserves with higher premiums charged to the still-healthy banks.

I agree. In a sane world, Congress would say, "You're not giving us enough information and time, and we're not going to do your bidding until you do" and then go on every network and news source to blame Bush for holding it up.

But something tells me Congress's hands are dirty here too....

The theme is taxes. Those who pay them, those who get tax bailouts. You need to give up the feeling sorry for the minorities outside I presume your sexual orientation, whether it be in Mamma Mia and the poor little Greeks, or Hispanic and Blacks. Try working for GLBT issues.

Reading is fundamental Charles...

You were so busy assuming I was attacking you that you failed to notice that I was talking about myself

Yip - who can we blame. Greedy bankers, greedy investors, the poor who default on their loans - or just random minority groups.
No seriously , what is this all about.
Take a step back and lets look at the bigger picture. We are all dependant on each other. That is why when America lets a bank go bust, the whole world feels it. Yes all different races, rich and poor , sexual orientations, and different religions are suffering .
Michael Laitman explains how our egoistic nature has brought us here. He offers some insight and answers in his news page :-
“At the foundation of human behaviour, driving all economic and social systems, is the ego, which always prefers the narrow personal interests of investors and stockholders, over the common good of the public. The pursuit of wealth, honour and control at the expense of others are the top priority for company owners.”