Supreme Court Majority: The Rule Of The Anus

Three decisions ruined liberty today. The Rule Of Law is being destroyed and the Rule Of The Anus is rising to replace it, and not just because of “teh ghey” issue forced upon us all by judicial 14th amendment fabrication fiat either.

No, gays were not freed African Americans!

If you REALLY believe in same sex marriage and aren't just using it as a tool to bully Christian bakers and Silicon Valley executives who don't, then go fight for it state-by-state, as women's suffrage was done, back when people still believed in a Constitutional Amendment process.

And then, in a second Court decision, statistical variations can be used to "prove" racial discrimination now in housing, regardless of who actually purchased a home in a neighborhood or had the ability to do so.

I know, I know, income to debt ratios and credit history are "white privilege" or inherently racist, so let's just get that out of the way.... :-P

The ultimate coup de grace for liberty came with the Obamacare ruling, where regardless of how the law was explicitly written about subsidies for state or federal exchanges, somehow there was magical "intent", to write it differently.

Scalia’s dissent: “We lack the prerogative to repair laws that do not work out in practice, just as the people lack the ability to throw us out of office if they dislike the solutions we concoct.”

That is a DISSENT. 

In a sane world that would be the 9 – zip decision.

But that’s the thing isn’t it?

The Rule of Law is dead.

Under this ruling, you could literally shit on a piece of paper, have it passed by Congress and signed by the President–then interpret it to mean whatever you want–because intentions!!! So never mind "Teh Gheys", this decision is the ultimate Rule Of The Anus.

The Blackmailed (I firmly believe this) John Roberts and Obama have broken the United States of America. The Humpty Dumpty Principle is now operative. Under the socialist Obama:
--The USA is bankrupt.
--We are no longer a world leader.
--Our middle class is dwindling.
--The destruction of the family is nearly complete.
--Nearly fifty million Americans are on food stamps.
--Almost 100 million Americans are out of the work force, hence "lower unemployment figures" (which count people actively seeking work).
--And there is no functional opposition to any of this.

But, Confederate battle flag! And statues !!

And the Leftist Smear Machine gets cranking up.

Some years ago, Julian Bond, living on the fumes of his Civil Rights cred, ranted that “Tea Party Members long for the Confederacy”.

Meanwhile, Julian Bond longs for the Soviet Union.

Once I believed that with enough Real Republicans to overwhelm the RINOs, we could actually make a difference.

But now I believe that the Left Media Smear Machine is too strong. And where that doesn’t silence opposition, the Left Blackmail Machine does. How else to explain Justice Roberts and former Speaker Hastert?

Meanwhile, too many people are tuned out on twerking or drugs or sports or The Bachelor(ette) or who knows what.

And perhaps they are correct to be, as we can no longer win.

I think it’s time to admit that the tide has turned against liberty and responsibility and the rule of law.

Obama and his ilk won for a reason.

Same sex marriage is being accepted for a reason.

“Politically Correct” mau-mauing is being accepted for a reason.

Our economy is in the shitter for a reason.

The GOP can’t effectively respond for a reason.

The media can lie and obfuscate for a reason.

And so forth.

The reason, sadly, is that the "low information voter" sheeple majority in the country believes those actions or situations are okay.

We’re on the minority side, and probably will be from now until “they run out of other people’s money”, and the cumulative effects of these uninformed and ill conceived ideas overwhelm the country. And perhaps even beyond that point, as some Commiecrat decides he can nationalize everything like Allende in Chile, or Hugo Chavez in Venezuela. The importing of millions of illegal aliens from the banana republics may be no accident.

Perhaps another Reagan or an American Thatcher can arise and try to turn the tide, but we would need a planned succession of at least 4 terms of their minions–and solid Tea Party Congresses in place concurrently.

Perhaps another Tailgunner Joe McCarthy can arise to counter-demonize and neutralize the “Politically Correct” mau-mauing, but he would probably be driven to drinking himself to death, just like the original Tailgunner Joe was.

Perhaps The Obamunist and his successors will try to overreach like Allende did down in Chile, but will the only response be to get a Pinochet of our own to have a dictatorship and rule over the nation of socialist dupes for 16 years until the mess is straightened out and the dupes grow up, die off, or wise up, depending upon their ages? That certainly wasn’t libertarian.

Well, just some happy thoughts for the day….. 

When the "Planners' complain about "Sprawl", what do they really mean?

"Sprawl" = affordable pleasant single family homes with yards for people, and the commercial enterprises that come along to serve people and employ some of them. Industrial parks can sometimes come along too, but usually the industrial site came first, which caused population influx (see below).

"Sprawl" draws the wrath of wanna-be Party Commissars who euphemistically call themselves "urban planners", more on them later.

However, "sprawl" is a simple result of population influx and The Two Out Of Three Rule.

The Two Out of Three Rule is the simple principle that while buyers want homes that are (1) affordable, (2) convenient (usually to/from work), and (3) safe and pleasant, in the Real World most people can only have Two out of those Three.

(3) Safe and Pleasant, for most people, means (a) no or at least minimal criminality, (b) a yard for themselves and their families, (c) a park nearby that is also non or at least minimally criminal.

"Sprawl", therefore, is the result of homebuyers giving up, or going short on, convenience (usually to/from work), in favor of having, or going long on, affordability and safety and pleasant conditions.

This is anathema to the wanna-be Party Commissars who euphemistically call themselves "urban planners", who would rather demand that we the people (who they view as Petty Bourgeois or Aspiring Proles) give up our desires for a yard for ourselves and their families.

The even more extreme wanna-be Party Commissars who euphemistically call themselves "urban planners", insist that we Petty Bourgeois or Aspiring Proles give up our desires for no or at least minimal criminality, and forget or never mind a park nearby that is also non or at least minimally criminal. Why, that's ray-cist!

The wanna-be Party Commissars who euphemistically call themselves "urban planners", pay lip service the "alternative" idea that "New Urbanism", or "infill development", meaning more dense development in the inner city, can house us, the Petty Bourgeois or Aspiring Proles. However, when it comes to *actual* infill development, the same Commissars who claim to want it often *then* turn around and call it "Manhattanization", and end up *curtailing* it, in favor of a "People's Park" here, or a "Community Garden" there, or just restricting denser development in general. And yet they still tut-tut and cluck-cluck about the "Sprawl" that is exacerbated as a result.

Meanwhile many families still want a yard for themselves and/or their families. While dense infill development *can* appeal a good many people, most notably the childless, the single, and the non-heterosexual, a good many people are still simply *not* served by the "New Urbanist" model.

But of course, we are Petty Bourgeois and Aspiring Proles, and our petty bourgeois aspirations must be snuffed out in the warped minds of a good many of the wanna-be Party Commissars who euphemistically call themselves "urban planners".

When New Urbanist infill developments do succeed, they become pricey, because they are convenient and nice and pleasant (at least they are to the the childless, the single, and the non-heterosexual anyway), and so, they are *no longer* affordable.

The Two Out Of Three Rule still holds in any area with significant population influx.

A good many inner city neighborhoods remain definitely *not* pleasant, and thus they fail. They often fail because the same wanna-be Party Commissars who euphemistically call themselves "urban planners" have ideological bents, such as:

--the view that the "authentic" behavior of people in said inner cities is to behave like thugs and criminals because they are racial/ethnic group X, and those of us who are not racial/ethnic group X have some kind of "privilege" that makes us behave like decent citizens. This is known as Turning Crime Into A Civil Right.

--the view that we Petty Bourgeois or Aspiring Proles must not arm and defend ourselves against thuggery and we must depend upon the benevolence of the same wanna-be Party Commissars who euphemistically call themselves "urban planners". This is known as "gun control".

The solution is to tell the wanna-be Party Commissars who euphemistically call themselves "urban planners" to "Put up or SHUT UP."

A liberal admits Affirmative Action Housing Crash

Our Lot: How Real Estate Came to Own Us by Alyssa Katz, a liberal journalist and NYU journalism professor who writes for Mother Jones, is, believe it or not, a very good book about how the sacred cause of "diversity" led to the Great Mortgage Meltdown.

The book hasn't garnered the attention it deserves—probably because it makes clear the bipartisan responsibility of both her opponents on the Right and her friends on the Left.

Our Lot focuses on the misdeeds of capitalists as well as leftists. But that is a familiar leftist tale. What is intriguing is Katz's honest testimony on the role of her fellow leftists in this mess.

Katz is remarkably frank about how government programs and political pressure to boost minority homeownership helped blow up the economy. She's particularly good at explicating how leftist housing activists, such as ACORN and Gale Cincotta, the godmother of the Community Reinvestment Act, worked with Democratic politicians such as Bill Clinton, HUD Secretary Henry Cisneros, and Jim Johnson, CEO of Fannie Mae, to lay the groundwork for the Bubble and Bust. She devotes more time to these factors than she does to the Bush Administration's culpability (which, to my mind, is remarkable).

Still, Our Lot makes clear that on housing policy, the Clinton-Bush years form a single continuum with one overarching plan: boost the minority homeownership rate by lowering credit standards. Call it the Era of Multi-Cultural Lending.

Senators Dodd & Conrad Lied About Mortgage Favors

The Senate Ethics Committee investigation looking into allegedly preferential treatment afforded powerful Senators Dodd (D-CT) and Conrad (D-ND) by mortgage giant Countrywide Financial has sprung a few leaks. And the emerging details do not look good for either senator.
According to The Associated Press:

Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.

Robert Feinberg, who worked in Countrywide's VIP program, contradicted the repeated denials by Dodd and Conrad regarding their knowledge of the program. When asked directly whether the two Senators were aware they were receiving special VIP treatment, Feinberg simply said, "Yes."

The program was known as "Friends of Angelo," named after Countrywide's chief executive at the time, Angelo Martinez, who was recently charged with civil fraud and illegal insider trading. Dodd used two sweetheart mortgage loans in 2003 to refinance residences in Connecticut and Washington, DC, while Conrad took two loans the following year to refinance his beach house in Delaware and an apartment building in North Dakota.

Aside from Feinberg's testimony regarding the senators' knowledge of the program there is the documentary evidence as well.

In Dodd's case two documents entitled "Loan Policy Analysis" clearly prove Countrywide allowed Dodd to obtain the loan without paying "origination fees," when Countrywide's general policy is to collect these fees, also called "mortgage points."

And as far as Conrad is concerned, the North Dakota Senator sought to obtain a residential loan for his eight-unit apartment building when Countrywide's residential loan limit is for buildings with no more than four units. "...See if the [loan executive] can make an exception due to the fact that the borrower is a senator," Martinez instructed Feinberg in an email obtained by The New York Times.

The email string indicates Conrad was award of the four-unit restriction.

Dodd and Conrad went into spin/disinformation mode, with Conrad gong so far as to compare his sweetheart mortgage/bribe to an airline "frequent flyer" program.

Their Democrat pals control the Senate and the House so don't expect too much investigation into this scandal. House Democrats have zero interest in subpoenaing information about the "Friends of Angelo" program, such as the full list of beneficiaries that is sure to include more politicians from both political parties.

The accusations of preferential treatment are particularly damaging for Senator Dodd, who chairs the Banking Committee, which is responsible for regulating the mortgage lending industry including companies such as Countrywide.

Despite the serious investigation into his corrupt relationship with Countrywide Dodd continues to rake in huge amounts of cash from lobbyists. According to The Associated Press: Even as Dodd "boasts about snubbing lobbyists...the embattled Connecticut Democrat is still cashing lobbyist campaign checks and rubbing shoulders with them at fundraisers and party gatherings."

And, of course, the Senate Ethics Committee investigation is taking place while Dodd is embroiled in a separate real estate scandal. The watchdog group Judicial Watch filed a Senate Ethics Complaint against Dodd for undervaluing a property he owns in Ireland on his Senate Financial Disclosure forms.

Judicial Watch's complaint forced Dodd to amend the forms. However, press reports suggest the property is still undervalued. Judicial Watch also alleges in the complaint that Dodd obtained a sweetheart deal for the property in exchange for his assistance in obtaining a presidential pardon for a long-time friend and business associate. The false financial disclosure forms were part of the cover-up.

Despite these scandals, Dodd continues to head the Senate Banking Committee and Conrad is in charge of the Senate Budget Committee. Think about that the next time you hear these committees talk about banking ethics or balanced budgets!

Liberals Call for Fannie and Freddie to "Relax" Mortgage Standards – AGAIN!

You're not going to believe this. Here we are in the midst of a major financial crisis – a crisis largely brought about by lax and corrupt lending practices at mortgage giants Fannie Mae and Freddie Mac – and guess what Democratic Reps. Barney Frank (D-MA) and Anthony Weiner (D-NY) want to do.
Yep, you guessed it. They want the quasi-public organizations to "relax" their mortgage standards yet again!
Here's the scoop according to Reuters:

Two U.S. Democratic lawmakers want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery, the Wall Street Journal said.
In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold, up from 51 percent, the paper said. Freddie Mac is due to implement similar policies next month, the paper said.
In a letter to the CEO's of both companies, Representatives Barney Frank, the chairman of the House Financial Services Committee, and Anthony Weiner warned that a 70 percent sales threshold "may be too onerous" and could lead condo buyers to shun new developments, according to the paper.

Now, there is no question that the condo market has been slammed in this economy, wreaking havoc in many parts of the country, especially in places like Florida. But relaxing standards is clearly not the answer. As The Atlantic recently noted: "...It's a little unclear...why Fannie and Freddie should listen to Congress, since guaranteeing condos poses greater risk to taxpayers' wallets than single-family home mortgages."
In other words, trying to slap a quick fix on the condo problem will only make matters worse. Don't we already know how this works?

As you may recall, the first domino to fall in this financial crisis was the housing market. And the reason for that? Under pressure from the Clinton administration and their liberal allies in Congress, Fannie and Freddie relaxed their lending standards and provided home loans to people who could not afford them.
Here's how The New York Times described this risky scheme back in 1999:

In a move that could help increase homeownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders...Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton administration to expand mortgage loans among low and moderate-income home people and felt pressure from stockholders to maintain its phenomenal growth in profits.

The article goes on to predict that such a strategy might not cause problems during times of economic prosperity, but that Fannie Mae could run into serious financial difficulty during an economic downturn.
Now Frank and company seek to repeat this mistake, even after the collapse. (Frank has a sorry history of protecting Fannie and Freddie.)

By the way, if you haven't yet checked it out, click here to watch Judicial Watch's educational panel entitled "The Truth About the Financial Crisis." (We have a written transcript available as well.) Then you'll have an even better understanding of why Frank and Weiner's plan is a terrible idea.

Pay No Attention To That Diversity Mandate Behind The Curtain

Steve Salier, as ever, is blunt:

In recent decades, “diversity”has become one of America’s sacred mantras, propagandized relentlessly in the schools and the press. Expressing skepticism about the diverse within internal business communications has become, in effect, a civil offense, punishable in anti-discrimination lawsuits.

Not surprisingly, self-interested manipulators learned to play the race card to justify their machinations.

Thus, the universally-endorsed societal necessity of lending more money to minority homebuyers was used to justify both regulation (such as the Community Reinvestment Act) and deregulation (such as the hands-off approach to subprime bucket shops). Any practice positioned as helping minorities achieve their fair share of the American Dream had the wind at its back.
Consider, for example, three huge Southern California originators of dubious debt—Ameriquest, New Century, and Countrywide—all of which collapsed in recent years when Wall Street and the big banks finally wised up to the mortgage-backed securities they peddled.

E. Scott Reckard and Mike Hudson reported in 2005 for the Los Angeles Times on Ameriquest, then the biggest subprime originator:

Borrowers were told what their income had to be to qualify, these ex-workers said, and they were often coached to invent fictitious side jobs, such as home-based computer consulting, to hit the mark. Nearly one out of every six Ameriquest mortgages sold to Wall Street investors in 2004 was a stated-income loan, according to a Times analysis of 90,000 Ameriquest mortgages listed in filings with the Securities and Exchange Commission."[Workers Say Lender Ran ‘Boiler Rooms’, February 4, 2005]

The Left claims that the rise and fall of the subprime peddlers demonstrates the iniquity of the rightwing ideology of deregulation.

But this dishonest assessment blatantly ignores *who* was doing the deregulation, and *why*. The Affirmative Actioneers were doing it for Affirmative Action. When it came to mortgage lending to minorities, as regulated by the Community Reinvestment Act and other anti-discrimination laws, excessive skepticism was made illegal. Lenders and investors were only allowed to err in one direction.

Not surprisingly, excessive credulity came to dominate the system.

By no means were all the subprime peddlers sincere believers in the dogmas of multiculturalism. Instead, they knew they could wield political correctness like a club to scare off regulators.

Thus, to avoid inconvenient investigations, the owners of subprime mortgage originators tended to present themselves to politicians and the press as financial statesmen, moral leaders in the war on bigotry against minority borrowers.

Sue Kirchhoff reported in USA Today on April 17, 2007 in Subprime lenders’ big gifts helped lawmakers:

The nation's top subprime lenders, including New Century Financial (NEWC), which has filed for Chapter 11, have lavished generous donations on homeownership programs sponsored by black or Hispanic members of Congress. The paid sponsorships give lenders an entree to lawmakers and their constituents. Along with New Century, backers include Countrywide Financial (CFC), which settled a New York fair-lending investigation in 2006 by agreeing to compensate black and Latino borrowers for improper loans and set up a $3 million consumer-education program. Another is Ameriquest Mortgage, which in 2006 agreed to a $295 million settlement with state attorneys general who charged it with improper lending practices.

Similarly, Susan Schmidt and Maurice Tamman of the Wall Street Journal reported on January 5, 2009 in Housing Push for Hispanics Spawns Wave of Foreclosures:

The Congressional Hispanic Caucus created Hogar in 2003 to work with industry and community groups to increase mortgage lending to Latinos. At that time, the national Latino homeownership rate was 47%, compared with 68% for the overall population. Hogar called the figure 'alarming,' and said a concerted effort was required to ensure that 'by the end of the decade Latinos will share equally in the American Dream of homeownership.'

Hogar's backers included many companies that ran into trouble in mortgage markets: Fannie Mae and Freddie Mac, both now under federal control; Countrywide Financial Corp., sold last year to Bank of America Corp.; Washington Mutual Inc., taken over by the government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp., both now defunct.

Hogar's ties to the subprime industry were substantial.

Sorry, the derivative bubbles would never have inflated that high if Fannie and Freddie were not standing by to underwrite it all. Private bankers were *competing* with Fannie and Freddie, who were operating under Affirmative Action rules, and who *instituted and fomented* the 40 to 1 leverage. Policies have consequences.

Thomas Sowell on "Excessive" CEO Pay

Once again, Thomas Sowell points out the shorsighted mentality of the Left:

There is an old Russian fable, with different versions in other countries, about two poor peasants, Ivan and Boris. The only difference between them was that Boris had a goat and Ivan didn't. One day, Ivan came upon a strange-looking lamp and, when he rubbed it, a genie appeared. She told him that she could grant him just one wish, but it could be anything in the world.

Ivan said, "I want Boris' goat to die."

Variations on this story in other countries suggest that this tells us something about human beings, not just Russians.

It may tell us something painful about many Americans today, when so many people are preoccupied with the pay of corporate CEOs. It is not that the corporate CEOs' pay affects them so much. If every oil company executive in America agreed to work for nothing, that would not be enough to lower the price of a gallon of gasoline by a dime. If every General Motors executive agreed to work for nothing, that would not lower the price of a Cadillac or a Chevrolet by one percent.

Too many people are like Ivan, who wanted Boris' goat to die.

It is not even that the average corporate CEO makes as much money as any number of professional athletes and entertainers. The average pay of a CEO of a corporation big enough to be included in the Standard & Poor's index is less than one-third of what Alex Rodriguez makes, about one-tenth of what Tiger Woods makes and less than one-thirtieth of what Oprah Winfrey makes.

But when has anyone ever accused athletes or entertainers of "greed"?

It is not the general public that singles out corporate CEOs for so much attention. Politicians and the media have focused on business leaders, and the public has been led along, like sheep.

The logic is simple: Demonize those whose place or power you plan to usurp.

Politicians who want the power to micro-manage business and the economy know that demonizing those who currently run businesses is the opening salvo in the battle to take over their roles.

There is no way that politicians can take over the roles of Alex Rodriguez, Tiger Woods or Oprah Winfrey. So they can make any amount of money they want and it doesn't matter politically.

Those who want more power have known for centuries that giving the people somebody to hate and fear is the key.

In 18th century France, promoting hatred of the aristocracy was the key to Robespierre's acquiring more dictatorial power than the aristocracy had ever had, and using that power to create a bigger bloodbath than anything under the old regime.

In the 20th century, it was both the czars and the capitalists in Russia who were made the targets of public hatred by the Communists on their road to power. That power created more havoc in the lives of more people than czars and capitalists ever had combined.

As in other countries and other times, today it is not just a question of which elites win out in a tug of war in America. It is the people at large who have the most at stake.

We have just seen one of the biggest free home demonstrations of what happens in an economy when politicians tell businesses what decisions to make.

For years, using the powers of the Community Reinvestment Act and other regulatory powers, along with threats of legal action if the loan approval rates varied from the population profile, politicians have pressured banks and other lending institutions into lending to people they would not lend to otherwise.

Yet, when all this blows up in our faces and the economy turns down, what is the answer? To have more economic decisions made by politicians, because they choose to say that "deregulation" is the cause of our problems.

Regardless of how much suffocating regulation may have been responsible for an economic debacle, politicians have learned that they can get away with it if they call it "deregulation."

No matter what happens, for politicians it is "heads I win and tails you lose." If we keep listening to the politicians and their media allies, we are all going to keep losing, big time. Keeping our attention focused on CEO pay— Boris' goat— is all part of this game. We are all goats if we fall for it.

Niall Ferguson: Affirmative Action Housing

Here’s an excerpt from Harvard financial historian Niall Ferguson’s massive Vanity Fair article explaining it all: “Wall Street Lays Another Egg:”

The Lessons of Detroit:

In July 2007, I paid a visit to Detroit, because I had the feeling that what was happening there was the shape of things to come in the United States as a whole. In the space of 10 years, house prices in Detroit, which probably possesses the worst housing stock of any American city other than New Orleans, had risen by more than a third—not much compared with the nationwide bubble, but still hard to explain, given the city’s chronically depressed economic state. As I discovered, the explanation lay in fundamental changes in the rules of the housing game. 

I arrived at the end of a borrowing spree. For several years agents and brokers selling subprime mortgages had been flooding Detroit with radio, television, and direct-mail advertisements, offering what sounded like attractive deals. In 2006, for example, subprime lenders pumped more than a billion dollars into 22 Detroit Zip Codes.

These were not the old 30-year fixed-rate mortgages invented in the New Deal. On the contrary, a high proportion were adjustable-rate mortgages—in other words, the interest rate could vary according to changes in short-term lending rates. Many were also interest-only mortgages, without amortization (repayment of principal), even when the principal represented 100 percent of the assessed value of the mortgaged property. And most had introductory “teaser” periods, whereby the initial interest payments—usually for the first two years—were kept artificially low, with the cost of the loan backloaded. All of these devices were intended to allow an immediate reduction in the debt-servicing costs of the borrower.

In Detroit only a minority of these loans were going to first-time buyers. They were nearly all refinancing deals, which allowed borrowers to treat their homes as cash machines, converting their existing equity into cash and using the proceeds to pay off credit-card debts, carry out renovations, or buy new consumer durables. However, the combination of declining long-term interest rates and ever more alluring mortgage deals did attract new buyers into the housing market. By 2005, 69 percent of all U.S. householders were homeowners; 10 years earlier it had been 64 percent. About half of that increase could be attributed to the subprime-lending boom.

Significantly, a disproportionate number of subprime borrowers belonged to ethnic minorities. Indeed, I found myself wondering, as I drove around Detroit, if “subprime” was in fact a new financial euphemism for “black.” This was no idle supposition. According to a joint study by, among others, the Massachusetts Affordable Housing Alliance, 55 percent of black and Latino borrowers in Boston who had obtained loans for single-family homes in 2005 had been given subprime mortgages; the figure for white borrowers was just 13 percent. More than three-quarters of black and Latino borrowers from Washington Mutual were classed as subprime, whereas only 17 percent of white borrowers were. According to a report in The Wall Street Journal, minority ownership increased by 3.1 million between 2002 and 2007.

Here, surely, was the zenith of the property-owning democracy. It was an achievement that the Bush administration was proud of. “We want everybody in America to own their own home,” President George W. Bush had said in October 2002. Having challenged lenders to create 5.5 million new minority homeowners by the end of the decade, Bush signed the American Dream Downpayment Act in 2003, a measure designed to subsidize first-time house purchases in low-income groups. Between 2000 and 2006, the share of undocumented subprime contracts rose from 17 to 44 percent. Fannie Mae and Freddie Mac also came under pressure from the Department of Housing and Urban Development to support the subprime market. As Bush put it in December 2003, “It is in our national interest that more people own their own home.” Few people dissented.

As a business model, subprime lending worked beautifully—as long, that is, as interest rates stayed low, people kept their jobs, and real-estate prices continued to rise. Such conditions could not be relied upon to last, however, least of all in a city like Detroit. But that did not worry the subprime lenders.

Although the number of defaults in the Greater Detroit region have been high, I suspect the dollars lost are small compared to here in California. See this map again, and change the Affirmative Actioneering in housing from blacks to Latinos?

The other item I would add is the effects of political correctness and discrimination lawsuits on financial institution’s ability to perform reality checks on their own actions. Nobody can send a memo to their colleagues saying “We lent a billion dollars to Detroit?” without being in severe danger of it turning up in the discovery of a "redlining" discrimination case.

Steve Sailer was right; it was a “diversity recession”.

More "inconvenient truth" about the housing crash

The Congressional Democrats were warned again and again, but did nothing. John Fund lays it out:

We will look back on the failure of Congress to reform the government-sponsored enterprises at the heart of the mortgage meltdown as one of the most expensive derelictions of its duty ever. Fannie Mae and Freddie Mac used their lobbying clout, political contributions and even charitable largesse to charm or bully anyone demanding reform in their lending practices.

The Bush administration certainly didn't cover itself in glory either, for example issuing news releases in 2005 touting the introduction of "zero down-payment " mortgages through federal housing programs designed to encourage home ownership.

But the administration at least tried to warn Congress that the Government Sponsored Enterprises (GSEs) should be reined in. Gateway Pundit notes that President Bush publicly called for GSE reform 17 times this year before Congress finally passed a bill increasing oversight of Fannie and Freddie — though by then it was too late.

Indeed, the White House's list calls for GSE reform is a long one, stretching as far back as April 2001. At that time, the administration's first budget declared that Fannie Mae and Freddie Mac's growing dominance of the mortgage market was "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

In 2003, after both Fannie and Freddie were found to have cooked their accounting books, then-Treasury Secretary John Snow urged Congress to "create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate capital requirements.

Two years later, Mr. Snow again called for GSE reform, noting that recent events "reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform.... Half-measures will only exacerbate the risks to our financial system."

The response? Rep. Barney Frank, who now vilifies Republican House members for questioning a policy of throwing another $700 billion on the bonfire, insisted to the New York Times during the 2003 accounting scandal: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

The wages of "Diversity" is death

"WaMu Recognized as Top Diverse Employer--Again," reads the headline on a recent bank press release:

Washington Mutual, Inc. (NYSE:WM), one of the nation's leading banks for consumers and small businesses, has once again been recognized as a top employer by Hispanic Business magazine and the Human Rights Campaign.

Hispanic Business magazine recently ranked WaMu sixth in its annual Diversity Elite list, which names the top 60 companies for Hispanics. The company was honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations.

The Human Rights Campaign, the largest national gay, lesbian, bisexual and transgender (GLBT) civil rights organization, also awarded WaMu its second consecutive 100 percent score in the organization's 2009 Corporate Equality Index (CEI), which measures progress in attaining equal rights for GLBT employees and consumers. WaMu joins the ranks of 259 other major U.S. businesses that also received top marks in the annual survey. The CEI rated a total of 583 businesses on GLBT-related policies and practices, including non-discrimination policies and domestic partner benefits.

In both surveys, WaMu earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups, all of which have a corporate executive sponsor and champion.

WaMu's recent press release yesterday was titled "Washington Mutual, Inc. Announces Conditional Exchange of Preferred Securities." That's rather cryptic, but the news headlines are pretty clear, such as this one: "Fed Takes Over WaMu in Largest Bank Failure in American History."

This is what happens when banks and other corporations try to placate leftists and liberals. i suspect those businesses who try to be "Green" will suffer the same fate. You can't sell your soul to the Satans of the Left and not expect to be damned.

Requiem For The Bush Presidency

Hearing the President asking his fellow Republicans to cave in and sign on to the bailout bill, I can only ask: What happened to this man I voted for twice?

I will give credit to President Bush where it is due:

1. He maintained, indeed, surged, the wars in Iraq and Afghanistan despite a fat, lazy, historically illiterate country that has lost its spine. Indeed, Iraq now looks very winnable, and Afghanistan, while "nation-building" there will always be dubious, as it is landlocked and has no oil revenue and no literate population to speak of, at least the Taliban and Ql Quaeda look like they can be wiped out there.

2. His two Supreme Court nominees, young and energetically pro-Constitution, will help protect us from radical activism for decades to come.

3. His tax cuts have let me keep a little more of my own money from an obscenely massive government.

But this does not excuse his wretched blunders:

1. I have long wondered how can a President who brings such strength and clarity to the war can be so soft and blind on the dangers of illegal immigration. Is he this naive and romantic about immigration of what is mostly an underclass? Or is cheap hired help that important?

2. And tonight, after his sad speech asking us to buy into this insane bailout, I wonder how a man with such resolve, who has asked us to firm our own resolve in so many ways, can fail to ask us for strength in these tough economic waters.

Hearing President Bush tell us the horrors that await us if we do not drink his Bailout Kool-Aid is more than a little depressing.

On the war, I have often analogized that America is like a stupid "multicultural" brainwashed teenager and Bush is the Dad who fills the vital role of telling the teen the way life is. The teen hates it, but realizes later on how right the Dad was.

Well, on this one Dad has wimped out. The President threw down this litany of things that will happen if we fail to listen to the snake oil from his friends the Fed Chairman and the Treasury Secretary. Every single dark consequence is precisely what SHOULD happen in a country where the public and private sector both failed to see the ill wisdom of Affirmative Action Lending and extending bad debt into the hands of people who were wholly unable to pay it back.
Want to know the true source of the financial meltdown in the home mortgage industry leading to the collapse of Fannie Mae and Freddie Mac and today's attendant financial crisis? Follow the money trail back about nine years. Check out this article from the September 30, 1999 edition of the New York Times (yes, that notoriously right-wing paper!)

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. [Emphasis added.]

The article goes on to predict that such a strategy might not cause problems during times of economic prosperity but that Fannie Mae could run into serious financial difficulty during an economic downturn.

And here we are with the financial markets on the verge of collapse and the federal government debating the largest government bailout in the nation's history.

While the Clinton administration is certainly culpable for getting the ball rolling on these high-risk loans, there is plenty of blame to go around. Fannie Mae led by Clinton's former budget director Franklin Raines and Obama campaign advisor Jim Johnson took Clinton's risky gamble and then doubled down. The pair allegedly cooked the books at Fannie, issued countless dubious mortgages, and then took huge bonuses before leaving the company. Both men have also been accused of accepting special mortgage deals from Countrywide (a co-conspirator in this financial mess) as well.
Johnson resigned from his official position with the Obama campaign because of the scandal, though he, like Raines, may still be advising him.

Liberal politicians on Capitol Hill were no better. For example, Senate Banking Chairman Chris Dodd (D-CT), who was also nabbed in the Countrywide scandal, took more money in campaign contributions from Fannie Mae and Freddie Mac than anyone else in the U.S. Senate. (Barack Obama, with only four years in the Senate under his belt, was close behind.) When reform proposals for Fannie and Freddie were put before Dodd, he called them "ill advised."

Despite their accounting problems and dire warnings of crisis, these "government sponsored enterprises" with the full support of liberals in Congress and their special-interest community organizing friends such as ACORN pushed for more subprime lending for their politically-correct constituencies. And calculating financial institutions (too many of which had corrupt relationships with these very same politicians) were happy to play along. Now the entire country is facing a financial disaster.

Any lessons learned? Not in this town. Fannie Mae and Freddie Mac are raring to reinvigorate the ruinous business of subprime loans to those who can't handle them. And the latest version of the bailout would take "profits" in the bailout scheme from the taxpayer and give them to government programs designed to push yet more risky mortgage loans and related programs controlled by liberal activist groups.

But instead of fighting back about all this, President Bush has caved in. This is not wise. Wise leadership means telling us tough times lie ahead, but we can lick them. Wise leadership means taking bold steps like suspending capital gains taxes so that investors will still invest, even in a recovering market. Wise leadership means suppressing the urge for a quick, expensive fix.

George W. Bush did do some great things. His rightness on the biggest issues means I will never regret his eight-year term. But I cannot hide my disappointment. I fear that his likely successor, Barack Obama, will take the inch of Federal bailout that President Bush gave him and make a mile out of it.

When liberals sit in judgement of bankers...

It is truly loathsome.

...how else would you describe these congressmen who are now blaming the financial mess on the failure of the free market? Starting with the Community Reinvestment Act of 1977, that was given more teeth during the Clinton administration, Congress started intimidating banks and other financial institutions into making loans, so-called subprime loans, to high-risk homebuyers and businesses. The carrot offered (to offset the stick of discrimination lawsuits) was that these high-risk loans would be purchased by the government-sponsored enterprises Fannie Mae and Freddie Mac. Anyone with an ounce of brains would have known that this was a prescription for disaster but there was a congressional chorus of denial.

Five years ago, Congressman Barney Frank (D-Mass.) vouched for the "soundness" of Fannie Mae and Freddie Mac, and said, "I do not see any possibility of serious financial losses to the treasury." In 2004 congressional hearings, where the Bush administration sought greater oversight over Freddie Mac and Fannie Mae, congresswoman Maxine Waters (D-Calif.) said, "We do not have a crisis at Freddie Mac and particularly at Fannie Mae," adding that "the GSEs have exceeded their housing goals." Congressman Gregory Meeks (D-N.Y.) said, "There's nothing wrong with Fannie Mae and Freddie Mac." In these hearings Barney Frank said that he doesn't see "anything in the reports that raises safety and soundness problems." Earlier this year, Sen. Christopher Dodd (D-Conn.) praised Fannie Mae and Freddie Mac for "riding to the rescue" to help people get home mortgage loans, adding that they "need to do more" to help high-risk borrowers get better loans.

The financial collapse of Fannie Mae and Freddie Mac is not a failure of the free market because lending institutions in a free market would not have taken on the high-risk loans. They were forced to by the heavy hand of government....

In 2002, when the Enron and WorldCom scandal broke, the Congress held hearings and some chief executives were jailed. Who did what was the big story in the major news media almost every night. Congress rushed to enact the Sarbanes-Oxley Act, also known as the Public Company Accounting Reform and Investor Protection Act of 2002. The act placed unnecessary, onerous and costly accounting standards on American businesses. The Enron and WorldCom debacle is a drop in the bucket compared to the financial mess that Congress has created through Fannie Mae and Freddie Mac, in the name of "affordable" housing. Have you heard Congress calling for hearings? They haven't called for hearings because many of them, both Democrats and Republicans, receiving hundreds of thousands of dollars, were in cahoots with Fannie Mae and Freddie Mac. If Americans are going to be on the hook to bail out these government-sponsored enterprises, at the minimum congressional hearings ought to be held to find out who did what and when.

Corporations employ accounting practices promulgated by the Financial Accounting Standards Board (FASB) that established Generally Accepted Accounting Principles (GAAP). Fannie Mae, Freddie Mac and government agencies have accounting practices that don't come close to, and never did, the honesty of private accounting practices. Accounting fraud and deception are the dominant features of government agencies. If a private business kept and cooked the books, like government agencies do, the top executives would go to jail. Shouldn't the accounting standards businesses have to meet be applied to Washington? My answer is yes and if a congressman says no, I'd like for him to tell us why.

Mortgage Crisis - Do Facts Matter?

Thomas Sowell asks this:

It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today's financial crisis.
Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury, five years ago.
Yet, today, what are we hearing? That it was the Bush administration "right-wing deology" of "de-regulation" that set the stage for the financial crisis. Do facts matter?
We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't.
Is that the free market? Or do facts not matter?
Then there is the question of being against the "greed" of CEOs and for "the people." Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis.
Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the "lynching" of Raines, as if it was racist to hold him to the same standard as white CEOs.

Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing!
The Washington Post criticized the McCain campaign for calling Raines an adviser to Obama, even though that fact was reported in the Washington Post itself on July 16th. The technicality and the spin here is that Raines is not officially listed as an adviser. But someone who advises is an adviser, whether or not his name appears on a letterhead.

The tie between Barack Obama and Franklin Raines is not all one-way. Obama
has been the second-largest recipient of Fannie Mae's financial contributions,
right after Senator Christopher Dodd.

Unfortunately, Thomas, facts don't matter, because the liberal media has a template! And the liberal media template is that there is “racial disparity” in loan application approvals. As if ability to pay didn't matter. The liberal media template is that we must have “fairness” of home ownership absent ability to handle it. The liberal media template is that there is inherent “virtue” in poverty and inherent “vice” in prosperity.

Just get everyone who wants one a home and the result will be grateful owners responsibly shouldering their good fortune. Poverty, as liberals see it, is nothing more than an accidental circumstance of birth resulting in the absence of wherewithal. Lack of judgement, ambition or a sense of responsibility has nothing to do with it.

Thus, when people start defaulting loans they never should have received in the first place, no one is more surprised than liberals.

Another interesting factor in the warped liberal media template is that all immigrants would be grateful mortgage payers. As a result, a huge number of these no-documentation-required "liar loans" were made to illegal aliens, who must have thought the gringo was crazy to give them a house with only a promise, made in Spanish, to repay the loan. No Social Security Number, no credit history...hey, this is easy. Now that these illegal Mexicans don't have jobs in the construction business anymore, they have stopped paying their mortgage along with their new truck payments and the credit cards that banks like Washington Mutual sent them. They don't worry about their credit being ruined. No Social Security Number to trace their movements, so why should they worry about loan defaults. They've haven't any stake in the future of this country, so when everything dries up they'll just drive back home to Mexico in their truck they didn't pay for, with the goodies they bought with plastic they didn't pay for, and lay low and wait until the next time America is offering goodies.

Housing Crash: Karl Rove partly to blame???

Steve Sailer makes his case:

Last week, the mainstream conservative punditry finally picked up an idea I had first put forward in August 2007 (and developed with more detail last June): that an underestimated factor in the financial crisis set off by the mortgage meltdown is our reigning ideology of multiculturalism and diversity.

In other words, this is a minority mortgage meltdown—and it may trigger a Diversity Recession.
(...)
There's one man, however, who has so far escaped any blame. Few have realized something that turns out to have been staring us in the face all along: that the mortgage mess was, in sizable measure, an outgrowth of the primary political goal of the Bush Administration.

That man's name is Karl Rove.

And the primary political goal of President George W. Bush's political strategist: to bring Hispanics into the Republican Party.

As you'll recall, Rove's best-known tactic to appeal to Latino voters was repeatedly pushing "comprehensive immigration reform" (i.e., an amnesty for illegal immigrants).

Rove, though, had other arrows in his quiver. One was a plan to turn Hispanics into Republicans by providing them with loose credit so they could become homeowners. (Rove's belief that there's a connection between being able to afford a home and voting Republican is not totally irrational. As I've documented, since 2004 states with higher degrees of "affordable family formation" do vote Republican more than states where people can less afford to buy houses. That's why the Republican "Red States" tend to be inland, where land for housing is abundant and cheap, while Democratic "Blue States" tend to be expensive because oceans or Great Lakes restrict suburban expansion.)

As part of this plan, George W. Bush made several speeches rallying enthusiasm for his October 15, 2002 White House Conference on Increasing Minority Homeownership. For instance, there was his classic Bushian effort on June 18, 2002:

"The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. … So I've set this goal for the country. We want 5.5 million more homeowners by 2010—million more minority homeowners by 2010. (Applause.) … "

The five and a half million marginal minority homeowners that Bush bunglingly called for is a big number. At a mortgage of, say, $127,000 each, that would add up to, let me check my calculator, oh…

$700 billion—the size of the current bailout. Well, whaddaya know …

Bush rattled on:
"I'm going to do my part by setting the goal, by reminding people of the goal, by heralding the goal, and by calling people into action, both the federal level, state level, local level, and in the private sector. (Applause.) …“And so what are the barriers that we can deal with here in Washington?"

Well, there’s one obvious barrier to minority homeownership: many American minorities don't earn enough money to be able to afford their own home.

You might think, therefore, that the way to help minorities make higher wages would be to alleviate competition for their jobs by cracking down on legal and illegal immigration. Especially because illegal immigration is, well, illegal. And that's what the Chief Executive gets paid to do—enforce laws.

Nevertheless, Bush and Rove apparently hoped that amnestying illegal immigrants would win over Hispanic citizens, so they did almost nothing about illegal immigration (other than trying to legalize it, of course) until an outraged public forced their hands in the last couple of years.

Bush and Rove didn't have a plan for helping minorities earn more. Instead, they had a plan for helping minorities borrow more.

Bush went on in his June 18th speech:

"Well, probably the single barrier to first-time homeownership is high down payments. "

Uh-oh.

Traditional standards requiring "high down payments" existed for, as we see now, very good reasons. Being able to pony up 20 percent, or even just 10 percent, was cold, hard evidence of borrowers' credit-worthiness. It showed you hadn't spent every penny you ever earned. And a big down payment meant you instantly had substantial skin in the game. That you had paid out tens of thousands of dollars meant you were likely to do whatever it took to avoid losing your house by failing to pay off the loan.

To Bush and Rove, however, old-fashioned down payments were just keeping minorities from their fair share of the American Dream. Bush burbled on:

"People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)

We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year—40,000 families a year—will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)"

If you do the arithmetic, you'll see that Bush's silly little American Dream slush fund for subsidizing 40,000 families per year would take, not the eight years Bush promised to add 5,500,000 minority households to the ranks of homeowners, but 137.5 years. But, obviously, subsidizing all 5.5 million new minority homeowners out of the taxpayers' money would be so insanely expensive that white voters would rebel.

No, it had to be done on the sly, through the magic of fractional reserve banking, which, as the Federal Reserve notes, "permits the banking system to 'create' money." By taking more risks, by handing out more mortgages to likely deadbeats, the financial system could simply "create" the cost of 5.5 million homes for minorities.
(...)
(Thomas Allen wrote a must-read article on Fannie Mae's push for more—and more dubious—lending to immigrants way back in 2004.)

In December 2003, when signing the American Dream Downpayment Act, Bush bragged:

 "Last year I set a goal to add 5.5 million new minority homeowners in America by the end of the decade. That is an attainable goal; that is an essential goal. And we're making progress toward that goal. In the past 18 months, more than 1 million minority families have become homeowners. (Applause.) And there's more that we can do to achieve the goal. The law I sign today will help us build on this progress in a very practical way."

What was truly significant about Bush's 2002 speeches (including the doozy he delivered on October 15, 2002 at his White House conference, which you should read for the schadenfreude alone) was not the legislation he endorsed—but the unsubtle message he was sending to lenders and, most importantly, to his own employees, the federal regulators.

Bush made clear at his October 15, 2002 conference that he opposed not merely discriminating against borrowers who might turn out to be bad credit risks—he wanted more money to go to documented bad credit risks. He brayed:

 "Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans."

Let's put Bush's influence in perspective. I'm not saying that financial institutions would intentionally make hundreds of billions of dollars worth of bad loans just on the President's say-so. But what I am saying is that federal employees, such as financial regulators, do listen closely to what the Chief Executive says about what he wants done regarding those iffy loans.

Let's review: As long as the federal government ends up bailing out lenders, financial regulation is a necessity.

Lenders like to lend. That's what they do. That, typically, is for what they get paid bonuses.

Overly exuberant lending, unfortunately, leads to financial crises. And taxpayers and savers always seem to wind up paying to resolve them, either through formal programs like the Federal Deposit Insurance Corporation, or through ad hoc bailouts (of which we've seen so many in 2008).

Thus, since the government is on the hook for excessive lending, the government regulates lending.

The job of these federal regulators is to "take away the punchbowl just as the party gets going," as former Fed Chairman William McChesney Martin said long ago.

In his many speeches on minority housing, however, President Bush was telling his underlings to keep their hands off the punchbowl. Heck, maybe the regulators should add another bottle of Everclear just to be hospitable.

And if private lenders started worrying that giving mortgages to dubious credit risks could backfire on them, Bush's speeches could be read as hinting that his Administration would try to help them out, to the tune of, say, $700 billion.
(...)
This orchestrated push for more minority homeownership wasn't some random caprice of the President. It was part of the master plan of his political Svengali, Karl Rove. As Rove told every reporter who would listen in 2000 and 2001, Bush was supposed to be the new William McKinley, whose 1896 campaign manager Mark Hanna had figured out how to build a Republican coalition combining the business interests with (some) new immigrants to make the Republicans dominant until the Great Depression.

In 1999, the Washington Post reported on the McKinley Mania launched by Rove in Republicans Admire Bill … McKinley, That Is:

"Marshall Wittmann of the conservative Heritage Foundation explains: '1896 was the year that McKinley and Hanna tried to redefine the Republican Party. Instead of rehashing Reconstruction and the Civil War, McKinley offered an appealing image to new immigrants, rising entrepreneurs and working folks.

“'The theory of the Bush campaign,' Wittmann continues, 'with the slogan of 'compassionate conservatism,' is to similarly expand the base of the Republican Party, specifically by appealing to minorities and more centrist voters.'"

In 2001, for example, Rove told reporter Ralph Z. Hallow of the Washington Times:

"If you're a Mexican-American … if Mel Martinez comes to town and talks about his life story and this administration's policies to encourage homeownership, and you hear Bush talking a tax cut, education and leaving no child behind, and he's seen with Fox, and the first place he goes when in Europe is Spain—you say, 'Hey, Bush gets it. Our community is important to this guy.'"

Before the 2004 election, Rove boasted:

"[T]here are more people owning homes—particularly in the Hispanic and African-American communities—than ever before. This is a result of wise policies instituted at just the right time."

At the height of the housing bubble, on Mayday 2007, the day of planned pro-amnesty marches, Rove's protégé, Ken Mehlman, the campaign manager (under Rove's guidance) of Bush-Cheney 2004, wrote of how the GOP was wooing Hispanics:

 "There are several steps we can take to ensure that America's fastest-growing and most conservative voter bloc joins the GOP. …Home ownership has always been an important element of the American Dream, and Hispanic-Americans have made enormous progress thanks to the hard work of many families and the innovative policies of the president. Hispanic home ownership is at an all-time high with 50 percent of Hispanics owning their homes."

And these increases in minority homeownership due to government initiatives going back decades were true … temporarily.

But now minority homeownership rates appear to be falling as foreclosures hit Hispanics and blacks harder than whites and Asians. [Foreclosure Activity Increases 12 Percent In August, RealtyTrac.comSept. 12, 2008]

Foreclosures appear to be one of the few things in America not tracked directly by race. But the circumstantial evidence that blacks and Hispanics account for a disproportionate share is agreed upon by all who have looked into the question closely.

This map from RealtyTrac shows that the foreclosure disaster is largely regional. There are high rates of foreclosure in states such as Georgia and New Jersey, but the two main default dumps are the Midwestern Rustbelt and the heavily Hispanic Sunbelt.

The first regional meltdown is centered in Detroit, where the auto industry is perpetually dwindling. It's hitting black neighborhoods particularly hard.
(...)
Yet the Rust Belt default catastrophe is dwarfed by what's happened in California, along with its neighbors Arizona and Nevada, and in Florida. And this is much more of a self-inflicted wound, occurring in seemingly prosperous places where immigrants have flooded in.
(...)
As of August 2008, California alone, with 12 percent of the national population, accounted for 29 percent of all foreclosures. Add in the two California wannabes, Nevada and Arizona, and states with just 15 percent of the population are responsible for 36 percent of the foreclosures. Add in Florida, and four states with 21 percent of the population are home to half the foreclosures.

This is not to say that Hispanics account for most of the defaults in those four states. Plenty of white speculators bought homes figuring they could rent them out to all the Latino laborers who had flocked across the border to build exurban homes. And other whites wanted to move to the exurbs to get their children out of public school systems overwhelmed by the children of illegal immigrants. (Notice the circularity of the economic logic of this decade—which Dennis Dale aptly calls “The Blunder Years”?)

The foreclosure rate per capita in California is 2.9 times that of the other 49 states. And because houses are so much more expensive in California than elsewhere, the tarnished Golden State by itself probably accounts for something approaching half of the value of all foreclosures in America. The median house price in California is currently about twice the national average. At the peak of the bubble was closer to triple the national average.

In defense of Bush and Rove, as Texans they may have had a misguided sense of the scale of what they were unleashing. Texas Republicans are prone to blame the limited supply of housing in California on Not In My Back Yard eco-politics used by homeowners to raise their home values and keep out undesirables. And some of that is true. But there are topographical reasons for limiting development in mountainous California—such as smog and traffic. They aren't easily understood on the Texas prairie. The result: in California, unlike in Texas, it takes many years for increases in housing supply to catch up to increases in demand. That's why the loose credit policies of the Bush years turned into higher home prices in California than in Texas.

To be precise, a Los Angeles home averaged 2.56 times the price of a Dallas home in 2001 and 4.69 times in 2005. Even in 2005, the median Dallas home only cost 2.8 times the local annual income, while the median Los Angeles home cost 12.7 times what the median Angeleno was making.

Most white pundits can't believe that minorities had an impact on the mortgage meltdown because they don't really grasp the number of minorities now in the country. After all, there aren't a lot of Hispanics at dinner parties in Georgetown and the Upper West Side. (At least, not sitting down.)

The National Association of Realtor's webpage entitled "Diversity Is Good Business" quantifies where we're headed. Minorities are expected to comprise 64 percent of the net new households over the next decade and 54 percent of first-time homeowners by 2010.

 USA Today reported in 2007:

 "Across the nation, black and Hispanic borrowers helped fuel a multiyear housing boom, accounting for 49% of the increase in homeowners from 1995 to 2005, says Harvard's Joint Center for Housing Studies. But Hispanics and African-Americans were far more likely to leverage the American dream with subprime loans — higher-cost products for buyers with impaired credit — that are now going bad at an alarming rate. About 46% of Hispanics and 55% of blacks who took out purchase mortgages in 2005 got higher-cost loans, compared with about 17% of whites and Asians, according to Federal Reserve data."

In retrospect, it might have been less costly to the taxpayers and savers if the Bush Administration had just given every Hispanic voter in America a giant flat screen TV inscribed: "A gift from the Republican Party. Vote for George P. Bush Garnica for President in 2016!"

The only problem was that they just don't let you do that.

They do let you hand out racial preferences, but there are limitations. For example, you have to include African-Americans. Rove is not a stupid man (he's not as smart as he thinks he is, but he's not stupid). So he never thought the GOP had much chance to get black voters. Still, you can't just hand out affirmative action to your targeted immigrant group and exclude the descendents of slaves.

Worst of all, the Bush-Rove assault on credit standards meant that the white majority could qualify for doubtful debt, too.

White people sometimes get up in arms when the quotas get too obvious. Thus, it's often easier for politicians just to toss out all the standards, such as substantial down payments. And that often makes the effect more pervasive than if a straightforward quota had been used.

Attacking down payments and the like is the same as when the National Organization for Women protests as discriminatory against women a fire department making job applicants perform a minimum number of pull-ups to show they can carry unconscious smoke-inhalation victims out of burning buildings. One alternative is to impose upon yourself a simple quota of female firefighters (or, as they are known in the heroic New York Fire Department, "firewatchers"—there is a reason 343 firemen died on 9/11, but zero firewomen). At least with a quota you can keep your upper body strength test in order to still get strong men. Unfortunately, some fire departments respond by eliminating the strength test to stop N.O.W. from whining. That way, the fire department ends up hiring both women and men too weak to save your life.

 Similarly, the Bush jihad against traditional credit standards meant that not only more Hispanics and blacks could get loans they couldn't pay back—but more whites could, too.

Why didn't the financial institutions realize what was going on. Were they greedy?

Of course they were greedy. Greed is an omnipresent constant on Wall Street. Greed and fear, famously, drive the markets.
(...)
The relevant question is: Why wasn't greed balanced by fear? Why did the Wall Street financial engineers concoct a mountain of leverage on the back of the pebble of probability that these California mortgages would be paid off?

One reason is obvious: political correctness, enforced by anti-discrimination lawsuits. Expressing "prejudices" about the likelihood of protected minorities paying off loans violates anti-discrimination laws.
It's now legally dangerous to express fear in writing. Imagine that an executive in a financial firm had sent an email to a fellow executive saying:

"I see that the median home price in California is heading toward a half million bucks. Isn't California full of Mexicans? How can a bunch of poor Mexicans afford to pay off half million dollar mortgages once the price of homes stops going up and they can't refinance anymore. Aren't we headed for disaster in California if we don't go back to traditional credit standards?"

An email like that would wind up in the hands of plaintiffs' attorneys during discovery in discrimination lawsuits. The author would be fired. The CEO would have to go apologize to the National Council of La Raza and promise to give a whole bunch more zero down payment loans to people whose names end in Z.

You can only mutter heresies like that over drinks to close confidants.

Anyway, if you'd asked about how Californians could pay off their monster mortgages, you'd probably just hear that the firm's rocket scientists had taken everything into consideration in their immensely complicated calculations. They've got decades of data on California mortgages! What could possibly go wrong?

Unfortunately, one little thing had changed over the decades that the Wall Street quant jocks didn't include in their numbers: the Californians themselves.

The current average resident of California just doesn't have the same human capital as in the old days. In the 2007 National Assessment of Educational Progress test, California's 8th graders came in 49th out of the 50 states in reading. A United Way study recently found that 53 percent of the adult residents of Los Angeles are functionally illiterate in English.

If you stopped and thought about it, you might wonder how they would earn enough to pay back those massive mortgages. But stopping and thinking about the shortcomings of minorities is the road to legal ruin in modern corporate America.

In summary: for eight years, I've argued in VDARE.com that the Bush-Rove plan to convert a majority of Hispanics into Republicans would not work politically. (By the way, the latest poll of Hispanics in seven swing states shows Barack Obama with a 63-26 lead over John McAmnesty.)

Latinos, I've argued, will remain mostly conventional tax-and-spend Democrats. On average, they simply aren't going to make enough money to make it rational for them to switch to the party of cutting taxes and spending. The main reason they won't make enough money: they typically lack the human capital to earn enough.

But now, for similar reasons, Latinos have turned out to lack the earning power to pay off enough California-sized mortgages.

Still, never mind that political correctness has ignited this financial apocalypse.

The Affirmative Action Housing Bust, Part 2

They like to blame "deregulation" for the subprime mortgage crash. But exactly WHO did the deregulating?

"Once your bank has lent you money to buy a house, it can't lend the money again until you pay it back. But if your bank sells your mortgage, it can make another loan right away. Without the secondary market, most of the funds for home mortgages would dry up.

Fannie and Freddie went broke because they bought billions of dollars worth of subprime mortgages, on which borrowers defaulted when the housing bubble popped. Fannie bought most of its bad mortgages from Countrywide Financial, whose CEO, Angelo Mozilo, gave sweetheart loans to senior executives of Fannie Mae.
(...)
President Bush proposed regulatory reforms in 2003, but Congress took no action. In 2005, John McCain and three other GOP senators proposed a strong reform bill. It died when Democrats threatened a filibuster. Democrats opposed reform in part because they feared it would mean fewer loans to poor people.

"Fannie Mae and Freddie Mac are not facing any kind of financial crisis," Rep. Barney Frank (D., Mass.) told the New York Times when the Bush bill was introduced. "The more pressure there is on these companies, the less we will see in terms of affordable housing."

Democrats and some Republicans opposed reform in part because Fannie and Freddie were very good at greasing palms. Fannie has spent $170 million on lobbying since 1998 and $19.3 million on political contributions since 1990.

The principal recipient of Fannie Mae's largesse was Sen. Chris Dodd (D., Conn.), chairman of the Senate Banking Committee. No. 2 was Barack Obama.

Mr. Dodd was also the second largest recipient in the Senate of contributions from Countrywide's political action committee and its employees, and the recipient of a home loan from Countrywide at well below market rates. The No. 1 senator on Countrywide's list? Barack Obama.

Fannie Mae CEO Franklin Raines was forced to resign in December, 2004, because of "accounting irregularities." The Washington Post reported July 16 that the Obama campaign has called Mr. Raines "seeking his advice on mortgage and housing policy matters."

Mr. Obama appointed Mr. Raines' predecessor, James Johnson, as head of his vice presidential search committee until he also was implicated in "accounting irregularities," and it was revealed he'd received cut-rate loans from Countrywide.

Chicago billionaire Penny Pritzker, head of Mr. Obama's finance committee, chaired the now-defunct Superior bank when it began to cook the books to conceal losses from subprime mortgages. The holding company her family owned collected $200 million in dividends on phony profits."