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Minority Champions Created the Housing Crisis
There were two items online today that support what I have considered to be a major contributor to the housing market problems. Democrats got involved in banking decision. Denying a loan became political.
Creating a system with banking rules based on race would never have been acceptable. In order to make it easier for minorities to get loans, the banking system were given incentives to loans easier to get by everyone. The sub-prime loan was created in order to make it easier for minorities to get loans.
A rising tide lift all boats, but too much water will kill you.
Thomas Sowell (LINK) writes about how politicians looking for votes changed the approval process:
It was not that many years ago when there was moral outrage ringing throughout the media because lenders were reluctant to lend in certain neighborhoods and because banks did not approve mortgage loan applications from blacks as often as they approved mortgage loan applications from whites.
All this was an opening salvo in a campaign to get Congress to pass laws forcing lenders to lend to people they would not otherwise lend to and in places where they would not otherwise put their money.
And then a statistic posted at Christian Science Monitor (hat tip to Michelle Malkin) tells who was the beneficiary of those laws.
And minorities received a hefty share of those loans. Just over half of African-Americans and 4 in 10 Hispanics who got a mortgage in 2006 had a subprime loan, according to a 2007 analysis by the Center for Responsible Lending. (LINK)
Easy loans led to over building. We now have excess surplus in the housing market. It may take years to fill the available housing in some regions. Meanwhile, the financial system is in turmoil and we may be headed for a deep recession. You can bet your bottom dollar that the Democrats will accept no responsibility and place ALL of the blame on President Bush.
In my opinion, the housing crisis is a direct result of Congressional action. This is what happens when you let emotion and empathy be your only guide. The old communist slogan, “From each according to his ability, to each according to his need” may be reworded today in liberal spin, but it is as destructive today as it was during the collapse of the Iron Curtain.
July 26th, 2008 at 10:02 am
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