Monday, September 29, 2008

Because You Just Can't Keep A Good Racist Down

The collapse of the bail-out bill has not discouraged the folks at National Review or caused them to rethink there monomania for free-market corporatism. In an interview with Right Wing Hack excuse me, Republican Eric Cantor (R-VA-7th District) the NRO assures us that our current financial mess can be attributed to, wait for it, wait for it, Jimmy Carter and those low-life poor people.

What is it about the old peanut farmer that sets Republicans off? The poor guy got plastered by Don Reynaldo and Iranians but the Republicans still can't resist kneeing him in the groin for old times sake. Yes it was Carter and his administrations insistence that bankers stop being racist bastards that caused the current mess. Specifically Carter insisted that banks cease and desist the practice of Redlining neighborhoods. Of course the Southern Strategy Republicans never forgave Carter's attempt to put some actual teeth in the Fair Housing Act (of 1968) .

From Cantor's own race-baiting lips to god's (or at least the NRO's ears) "we first started going off course ... during the Carter administration, when Congress began this process of pushing lending institutions into extending credit to uncreditworthy borrowers. "

"This is the Community Reinvestment Act that you’re talking about?

Yes. And in fact, as the regulations developed, banks would be punished if they couldn’t demonstrate a certain number of loans on their books that were extended to those who were not worthy of that type of credit. It started a very bad trend."

Got that? We are in a mess because Carter forced the banks to Loan money to "unworthy" people. Guess who those folks might be?

In the entire NRO article / fluff piece not a word is breathed about Phil Gramm's brilliant idea of gutting Glass Spiegal via the Gramm-Leach-Bliley Act. Not a word was breathed about the sweetheart deal that institutions got in forming a regulation free playground in derivatives and other instruments. These unregulated dealings became so opaque that not even the sellers had any clue what was being sold. The whole system rode on churn and froth. It was wild, woolly speculation leveraged at a phenomenal rate.

What is despicable about the NRO piece and about Representative Cantor's musing is the how they blame the victims of the sub-prime loans. The whole set-up was a giant Ponzi scheme. Brokers overvalued properties and loan agents sold loans that shafted struggling minorities. They pushed rancid ARMs (Adjustable Rate Mortgage) loans on people who were struggling with debts. The ARMs had ridiculously low teaser rates that ballooned catastrophically for the borrowers after three years. By the time the new rate kicked in, the old loan had been bundled up and sold to a third or forth or fifth party. The original lender had long ago made his or her profit and could care less about the lendees ability to pay on the loan. The final owner of loan then faced the reality that it had been sold a load of worthless script backed by what Simon and Garfunkel once described as a pocket full of mumbles. The lendees lost their houses and the investors lost their shirts. A few, a lucky few, made out like bandits. The sub-prime scam stole wealth from those least able to supply it and gave it to those who least needed it. Lower to mid-income families got fleeced while the top 1/2 of 1% got even wealthier.

But mere working class people, especially people of color, were "unworthy" of their wealth, of their properties, of their pitiful nest eggs. It was only fitting and proper that they get fleeced by the rich and powerful. It is only fitting and proper that those not to the manner bred be deprived of not only their bootstraps but of their boots as well. How dare they think they could better their situation, how dare they try to raise above their proper stations?
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