Help with a basic question
The hard conservative line on the crisis seems to be that low interest rates and loose mortgage requirements arising from political correctness or something led to the current mess. Andy McCarthy at the Corner presupposes something like this in a post mocking Obama. Sullivan last week quoted a Lisa Schiffren post that places blame for the crisis at community organizers who accused lenders of racism. I don’t doubt that political pressures distorted housing and mortgage markets. Indeed, our entire housing industry – the entire American Dream, you might say – is based upon distortions arising from political pressures. It seems like what’s being explained in this is a further set of distortions that might have contributed to but not, on its own, created the housing bubble but not the ensuing financial and credit crises. My question to conservatives explaining the current meltdown with reference to anti-racism and Fannie and Freddie and the like is: Are these things that Wall Street didn’t know about? Were the people who packaged and bought and sold mortgage backed securities ignorant of the on-the-ground conditions in actual housing markets? Didn’t they know about community organizers and low interest rates and Fannie and Freddie’s political mandates? Did they really dispose of hundreds of billions of dollars worth of investment instruments while ignorant of the basic political and regulatory conditions surrounding the underlying assets? If not, then mightn’t risk-awareness in financial institutions be a better explanation? If so, isn’t that an even better explanation?
Someone on high was going to profit from PC regulation initiated absurdity. It was a matter of who scrambled aggresively. This is where hyper-competitive d0uchebaggery kicks in.
— bobo · Sep 25, 05:39 PM · #
This notion is utterly bogus. The legislation in question was passed in 1971. Am I supposed to believe that it took 37 years for a fundamental insolvency in that legislation— which affects less than a quarter of sub-prime mortgages— to work itself out? This is straightforward, obvious “any culprit but us” thinking. It’s a flailing, sad spectacle.
The fact of the matter is, conservatives are incredibly invested in the notion that big business and the i-banks can do no wrong, so they are flailing around for a culprit. And who have the decided is really to blame for a mess on Wall Street? Why, of course. Liberals, and poor black people.
Shameless.
— Freddie · Sep 25, 06:14 PM · #
“Shameless” might be a good way to describe those who equate the argument that artificially easy credit contributed to the financial crisis to blaming “poor black people.”
— Blar · Sep 25, 06:51 PM · #
a. Matt, if you are asking if hedge fund managers and investment bankers were well informed about the conditions and material struggles of the urban hyper-ghetto or the risks of struggling middle-class families….no, I don’t believe so. To put it gently. :)
b. It’s not clear what a risk manager does in your above scenario if he knows it’s going to be worse than the wisdom. Convention was 3% of subprimes would default (bell curve) – with extreme stress tests around 7-9% at the tail. The number has turned out to be ~18%. In terms of rationally aggregating all information, it was still terribly off – I think far worse than simple risk management. What’s a RM to do? Stress at 12%, a sigma event which would be laughed out of the room?
c. As far as I understand the latest empirical work, it shows that the CRA were incredibly successful with their loans. The ‘easy credit’ Blar refers to (Greenspan aside) isn’t a result of government action/CRA, but of fly-by-night shadow banks. Though I know how I’d bet on a matchup against empirical work and a hunch that helping ‘urban poor’ was counterproductive for everyone.
— rortybomb · Sep 25, 07:29 PM · #
“Shameless” might be a good way to describe those who equate the argument that artificially easy credit contributed to the financial crisis to blaming “poor black people.”
This is the argument that is being bandied about: rather than being the fault of rapacious bankers who wanted to wring every drop of profit out of an extremely unstable and poorly thought out financial vehicle, it’s actually the fault of guilt-stricken liberals who wanted to secure mortgages for people who couldn’t afford to pay them. And the supposed tactic that these pernicious liberals used to leverage this desire was to accuse mortgage lenders of classism or racism.
That’s what’s being asserted out there. And it’s specifically being asserted in regard to ACORN and the Community Reinvestment Act. This makes no sense. It doesn’t make sense based on the timeline. It doesn’t make sense based on the fact that twice as many of these mortgages were being made by non-CRA lenders. And it’s not supported by any kind of data that reflects either the racial makeup of the people who secured sub-prime mortgages, or evidence that a significant portion of these sub-prime mortgages were the result of CRA or similar.
It’s just thrown out there, and the thinking is clear. We live in a rhetorical atmosphere devoted to the politics of resentment. So instead of this issue being a non-partisan one, people like the editorial board of the National Review have to find some way to flog liberals with it. So they dream up this CRA stuff out of thin air.
Yes, individual home-owners are partly responsible for taking on mortgages they couldn’t afford. But there’s no reason to believe that any significant portion of them were able to get mortgages thanks to liberal hand-wringing, and the ultimate responsibility in any poorly thought out loan has to rest with the bank. It’s the banks who are responsible for deciding if a loan is prudent or not. They abdicated that responsibility, and for the most basic motive of all: profit. Sanctimony from liberals is just a canard.
— Freddie · Sep 25, 07:35 PM · #
Matt, I’m no economist, but I think the answer to your question is that economic actors by their nature don’t look at the big picture the way you think they should. An example of something more concrete than mortgages may help.
Let’s say the federal government decides to increase the current price of wheat to ten times the current market price. It could do this any number of ways: taxes, buy-up programs, tax credits for not growing wheat. In any case, economic actors act according to whatever incentives are in place. If wheat is taxed, people buy less. If the government is buying wheat at an inflated price, people grow more wheat for them to sell. If the government cuts them a check, people grow less wheat than the market may require. This affects commodities and derivatives markets that rely on the sale of wheat in similar ways.
At no point during all this do a significant number of economic actors say, “Hold on, I learned about this in Econ 101. A price floor above the market rate inevitably leads to a huge surplus. This is all a house of cards of the government’s making, and the bubble is going to burst. I’m going to get out of wheat and focus my economic activity on corn.” A few farsighted individuals might, and more power to them, but the majority will continue producing, buying, and selling wheat according to the incentives that the government has put in place. We should anticipate no less.
As I said, I’m not an economist, and I am not really sure if the Great Wheat Floor scenario is at all analogous to the financial crisis. But it is all to say that the government is big, and when it plunks down an incentive, people act on it, no matter how distortive its effects may be.
— Blar · Sep 25, 07:51 PM · #
Freddie, I don’t know what to make of the notion that encouraging easy credit in high-risk neighborhoods contributed to the crisis. It sounds plausible, but your argument about timelines also seems reasonable. It was your race-baiting that I found coarse and unedifying.
You say, “Yes, individual home-owners are partly responsible for taking on mortgages they couldn’t afford,” which is curious, because no one is making that argument. People took out mortgages because they thought they could afford them, and in many cases they thought they could afford them because some banks promised loans at “less-that-perfect-credit.” What is being asserted is that well-intentioned public pressure encouraged these banks to promise loans they shouldn’t have. If you want to argue against that proposition, great. But don’t make it sound like individual borrowers are being blamed when they aren’t, black or otherwise.
— Blar · Sep 25, 08:05 PM · #
Fair enough.
— Freddie · Sep 25, 08:31 PM · #
This is the attitude I was talking about, Blar, just as food for thought.
http://www.anncoulter.com/cgi-local/printer_friendly.cgi?article=275
— Freddie · Sep 26, 02:18 AM · #
Blar, I take your point about the marginal effects of government incentives. But the thing that I, and Freddie, too, were recoiling at was the quick pounce on ideologically convenient factors like, in Ann Coulter’s hard to imitate style, “affirmative action” loans to people with “good jump shots.” Jeezus. Schiffren was close to this. The thing about the housing economy – I was trying to suggest – is that it is suffused incentives both intentional and unintentional, it’s a highly artificial economy. It’s not like it would be a perfect market if it weren’t for CRA. If you’re going to pounce on CRA for distorting buying and lending decisions, why not complain about the mortgage interest tax deduction, or the interstate highways system? What’s lacking in these arguments – coming from people more respectable than Ann Coulter, such as Rich Lowry – is anything beyond assertions, anything weighing the factors empirically. It’s just…CRA, ACORN, jump shots.
I would like to hear rortybomb weigh in, since he clearly knows a lot more about this than I do.
— Matt Feeney · Sep 26, 03:25 AM · #
Good Lord, people, I hope you are not taking Ann Coulter as anything like the pulse of conservative opinion. I’m sure I could track down some perfectly odious comments on the financial crisis from Michael Moore and the like, but I have the good sense to restrain myself.
If you have an issue with the argument in the NR editorial, make your case. If you don’t think they have enough evidence for their claims, that is fine to say. But to reduce it to “CRA, ACORN, jump shots” is gross. You can make your point without tying reasonable people to extremists like Coulter, or claiming the argument is on a continuum with racial victim-blaming.
— Blar · Sep 26, 03:47 AM · #
It’s funny, arguing with conservatives about race is like being back on a university campus, tending the sensitivities of one’s marginalized interlocutors. I retract the word “jump shots,” Blar! I do. I read in Derrida that words are actions. I don’t want to hurt anyone.
— Matt Feeney · Sep 26, 04:33 AM · #
OK, but blar, I thought I did that. Non-CRA subprimes dwarf the number obtained through CRA. And CRA mortgages have performed significantly better than the national average. AND the timeline makes no sense. The argument is being made that liberal guilt forced banks to give mortgages to the undeserving. But that’s totally out of tune with the consensus understanding of this crisis, which is that banks abandoned basic diligence in pursuit of profit. There is a second, uglier notion that the people who obtained mortgages deserve most of the blame, and there are some very unpleasant associations going on there (made explicit by Coulter). It was wrong of me to conflate the two, and I apologize. But that doesn’t make the National Review’s bogus effort to brand liberals with this crisis any more palatable.
— Freddie · Sep 26, 04:51 AM · #
Matt,
You need to do more research to understand the full extent of the bipartisan consensus to rationalize debauching traditional restrictions on lending in the sacred name of “diversity.” It’s not just the Community Redevelopment Act. It was a vast sweep of programs and attitudes that promised something for everybody (except for the taxpayers and savers when the carriage inevitably turned into a pumpkin.) Everybody was in on it: the GOP, the Democrats, the banks, Wall Street, ACORN, the real estate developers, the NAACP, the local politicians. Everybody.
I blogged skeptically way back in 2002 about the Bush push to create 5.5 million new minority homeowners. Then I started the current version of this meme in August of 2007 with a blog posting that just scratched the surface of the extent and variety of ways that the “diversity” mantra was used both to lean on the credit markets to lend money to politically favored groups and to rationalize allowing the mortgage industry to run amok. You can read about it in my June article in Taki’s mag: The Diversity Recession:
http://www.takimag.com/site/article/the_diversity_recession_or_how_affirmative_action_helped_cause_the_housing/
— Steve Sailer · Sep 26, 07:35 AM · #
Matt asks:
“Are these things that Wall Street didn’t know about?”
The purpose of political correctness is to make people stupid, to prevent them from putting the truth in writing.
Imagine that one financial firm executive sent another one an email that read:
“The median home price in California is now a half million bucks. Isn’t California full of Mexicans? Can all these Mexicans really pay off their half million dollar mortgages? Shouldn’t we be worried?”
That email would inevitable show up in discovery during a discrimination trial and it would cause a huge scandal. The guy who wrote it would be fired, and the CEO would have to go apologize to La Raza and promise zillions in no down payment loans to Latinos for $400,000 homes in Modesto.
So, nobody puts anything in writing. Sure, people might mutter this during drinks to each other, but oral communication is much weaker for communicating complex analyses than written.
— Steve Sailer · Sep 26, 07:46 AM · #
President George W. Bush addresses the White House Conference on Increasing Minority Homeownership at The George Washington University Tuesday, Oct. 15, 2002
THE PRESIDENT: …. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That’s what we want. This is — an ownership society is a compassionate society. More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a — it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future. We’ve got to work to knock down the barriers that have created a homeownership gap. I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. (Applause.) … And it’s going to require a strong commitment from those of you involved in the housing industry. … I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they’re on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.) We’ve got the Horton family from Little Rock, Arkansas, here today. … They were helped by HUD, they were helped by Freddie Mac. … Finally, Kim Berry from New York is here. She’s a single mom. You’re not going to believe this, but her son is 18 years old. (Laughter.) She barely looked like she was 18 to me. And being a single mom is the hardest job in America. And the idea of this fine American working hard to provide for her child, at the same time working hard to realize her dream, which is owning a home on Long Island, is really a special tribute to the character of this particular person and to the character of a lot of Americans. So we’re honored to have you here, Kim, and thanks for being such a good mom and a fine American. (Applause.) I told Mel Martinez I was serious about this initiative… And the good news is, Mel Martinez believes it and means it, as well. He’s doing a fine job of running HUD, and I’m glad he has joined my Cabinet. (Applause.) And I picked a pretty spunky deputy, as well, Alphonso Jackson — my fellow Texan. (Applause.) I call him A.J. … I see Rosario Marin, who’s the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is. … All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I’m concerned. It’s part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it’s safe or not. It brings pride to people, it’s a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It’s a part of — it’s of being a — it’s a part of — an important part of America. Homeownership is also an important part of our economic vitality. If — when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; … Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it’s good for the pocketbook of the country, as well. To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can’t make a down payment. They may be qualified. They may desire to buy a home, but they don’t have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can’t cross. And one way to address that is to have the federal government participate. And so we’ve called upon Congress to set up what’s called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there’s a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers. Secondly, affordable housing is a problem in many neighborhoods, particularly inner-city neighborhoods. … I’m doing is proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce. (Applause.) Over the next five years the initiative will provide home builders and therefore home buyers with — home builders with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. … And we’ve got to set priorities. And one of the key priorities is going to be inner-city America. … Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.) Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there’s a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I’m not sure I can possibly understand that. Why do I want to buy a home? There’s an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream. Homeownership education is critical. And so today, I’m pleased to announce that through Mel’s office, we’re going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.) And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that’s what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it’s important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they’re into their new home. It is a — it is a way to help us meet this dream of 5.5 million additional families owning their home. I’m also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. … Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I’m talking about, I’m talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities. Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set. Freddie Mae — Fannie Mae and Freddie Mac — I see the heads who are here; I want to thank you all for coming — (laughter) — have committed to provide more money for lenders. They’ve committed to help meet the shortage of capital available for minority home buyers. Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin [Raines], I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It’s the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done. 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. … There’s all kinds of ways that we can work together to meet the goal. Corporate America has a responsibility to work to make America a compassionate place. Corporate America has responded. As an example — only one of many examples — the good folks at Sears and Roebuck have responded by making a five-year, $100 million commitment to making homeownership and home maintenance possible for millions of Americans. … The non-profit groups are bringing homeownership to some of our most troubled communities. … The other thing Kirbyjon told me, which I really appreciate, is you don’t have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives. And so is Luis Cortes, who represents Nueva Esperanza in Philadelphia. I went to see Luis in the inner-city Philadelphia. … But he also understood that a homeownership program is incredibly important to revitalize this neighborhood that a lot of folks had already quit on. … Again, I want to tell you, this is an initiative — as Mel will tell you, it’s an initiative that we take very seriously. … Thank you for coming. May God bless your vision. May God bless America. (Applause.)Steve’s closing thought:
What would 5.5 million marginal mortgages cost? I dunno … at, say, $127,000 each, that would be, what, $700 billion?
— Steve Sailer · Sep 26, 07:51 AM · #
That’s funny – I was actually going to post something about Sailer on his blog writing “Here’s George W. Bush’s speech…The precise programs he was advocating aren’t terribly important, they’re fairly minor, but the tone of his speech is important. It puts the Presidential Seal of Approval on the orgy of dubious mortgage lending (Down payments? We don’t need no steenking down payments!) in the name of increasing minority homeownership.”
Several traders and I were laughing earlier at the idea that conservatives think we sat around in 2003 and said “ya know, the greeks look all off on these derivatives, and there are concerns about the tail risk, but Mel Martinez really wants us to help minorities so let’s take huge positions!” (We actually didn’t even know Mel was a dude until we check who it was.)
Seriously though, Bush gave a “Seal of Approval” to the subprime CDOs and that’s why they were traded? Bearn Sterns didn’t confuse beta with alpha but instead were trading based on how Bush felt about minorities? That the first among these dudes were acting less on shadow banking non-regulations and moral hazard of making loans they didn’t hold but instead signals from Congress about hispanics?
I need a bit more. Also why are we assuming all subprime loans were to minorities or to poor people? It’s probably also worth noting, according to the best Fed numbers, somewhere between 1/3rd and a 1/4th of the subprime defaults are from people who originally had prime loans as their first loan – sold dependable borrowers fallen on tough post-Fordist times. The “us” when we complain about “them” abusing mortages.
— rortybomb · Sep 26, 08:52 AM · #
Rortybomb’s comments here are especially good. At the moment, I’m thinking that he and Steve Sailer can both be right at the same time, as long as you weight Steve’s modest claims (“non-negligible,” for instance, is a low bar) more than his [Steve’s] sweeping ones.
— Matt Frost · Sep 26, 09:09 AM · #
Sorry, my reply to Steve’s thought was a bit snarky; but I honestly don’t see a strong connection between banks-that-are-not-banks making loans they won’t hold, which is the result of specific deregulation, and poverty-related policy.
And thanks on the link! I do think there is also a bias, in addition to the right and poverty programs mentioned above, on the left to see the current housing problems as a result of McMansions and why-don’t-you-like-the-new-urbanism and “you wanted the extra garage and now you get what you deserve!” type stuff. (Exaggerations, yes. But it’s there.) Again, both are partially right, but there’s also elements of specific, current economic forces playing out on agents.
I’d think this would be equally popular on the right. Certainly “Sam’s Club Voters” all are feeling this, and house prices as proxy for schools could be a rallying call for school choicers as well.
— rortybomb · Sep 26, 04:46 PM · #
Dear Rortybomb:
California is central to the collapse — it accounted for something like 22% of all foreclosures in 2007, and, due to high home prices, I might guess 1/3rd of the dollars.
Did you guys sit around saying, “Hey, have you guys looked at the NAEP test scores in California lately — they’re down around Arkansas and Mississippi. The United Way says that 53% of the residents of Los Angeles are functionally illiterate in English. How are Californians going to earn enough money to pay off these giant mortgages?”
— Steve Sailer · Sep 26, 08:28 PM · #
I quite agree with Rortybomb’s comments that Matt links to on the fundamental problem being low earnings by the mass of Americans. Our elites have used fears of “wage inflation” to drive down the earning power of the bottom 2/3rds of society through mass immigration, outsourcing, tariff-cutting, and the like. Moreover, importing millions of low-skilled immigrants has driven down the median human capital level and earning power, especially in the heartland of the mortgage mess: California, Nevada, Arizona, and Florida.
But, the elites wanted Americans to keep spending ever more. So, that meant more debt. But now we’re realizing that the debt can’t be paid off because of lack of earning power among the masses. Kaboom.
— Steve Sailer · Sep 26, 08:42 PM · #
The “tone” of Bush’s 2002 speech was less important to traders than to officials in the Executive Branch who might have used regulatory powers to dampen the housing bubble. But, this speech gave them a vivid indication that their boss wanted to see down payments and other “barriers” to mortgages reduced.
— Steve Sailer · Sep 26, 08:51 PM · #
I see your point re:“than to officials in the Executive Branch who might have used regulatory powers to dampen the housing bubble.” Whenever people argue about anti-racism efforts -> housing bubble, I want to link it up with some motivating action/signal that got these lenders to give out such bad loans (as for their logic, it was probably like “We aren’t going to hold them, good luck to whoever is buying them”). The best action I can think of is the GSE’s change of conforming to 5% down, which I’m still parsing in terms of the political climate. And maybe an implied Greenspan-put type effort to keep housing prices up no matter what, though that’s not a moral hazard to these shadow lenders per se. Honestly, as I understand it the shadow lenders hated the CRA type efforts, cause it was money off their plate.
Still, I see that move by Bush as a result of a blind fate in unregulated markets as opposed to a move to fold poor Hispanics and other minorities into the Republican Big Tent. Such are anchoring heuristics.
— rortybomb · Sep 26, 10:08 PM · #
This is all part of the Bush-Rove plan to win the Hispanic vote. The Bush admin looked at the demographic forecasts and decided to make Hispanics into Republicans by making them prosperous homeowners who would naturally vote Republican.
I’ve argued all decade that Bush and Rove were deluded — that Hispanics, on average were never going to make enough money because, on average, they lacked the human capital, to become majority Republican. They would remain tax-and-spend Democrats. Similarly, they turned out to be lacking the earning power to pay off California-sized mortgages.
But I’ve been denounced as racist for years for saying that. Now, a lot of influential people read me, but who else comes out and says stuff like that? No, everybody reassures everybody else that it will all work out fine and there’s nothing to worry about in the massive demographic change going on in America. All these Latinos in California will be just like the Ellis Island immigrants, so only KKK racists worry about them paying off their huge mortgages.
Well, how’s that working out for us this week?
— Steve Sailer · Sep 26, 11:18 PM · #