This shouldn't be entirely unexpected, since every time there's a major problem conservatives find some way to blame it on a certain ethnic, racial, or religious group. Now they're looking for any minority to blame for what's really the absolute failure of their economic policy.
The very last thing they want the American people to see right now is that a bunch of rich, mostly-white people got together and worked the system so cynically and for so long that now they're asking for a $700 billion hand-out to put the cherry on top of their epoch-making hustle. So they'll search for someone else to blame and hope it sticks.
A few examples of conservative talking heads blaming the crisis on minorities are after the jump. They're hoping the general equation many Americans operate under, "White = Safe," will prevent closer examination of the problem. Because it's just such a complicated financial skigamadoo, some people might actually fall for Michelle Malkin, Neil Cavuto, and The National Review saying that it's all really just the fault of dangerous minorities.
The Mother of All Bailouts has many fathers. As panicked politicians prepare to fork over $1 trillion in taxpayer funding to rescue the financial industry, they've fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers, and minority home ownership mau-mauers (can't call 'em greedy, that would be racist) for blame.
But there's one giant paternal elephant in the room that has slipped notice: how illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis.
It's no coincidence that most of the areas hardest hit by the foreclosure wave -- Loudoun County, Va., California's Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters -- also happen to be some of the nation's largest illegal-alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.
Yes, the problem is all those goddamn illegals crossing the border and building McMansions in the exurbs.
The whole article is a piece of work. Like a complete racist, she doesn't know the difference between undocumented immigrants, Mexican Americans, and Hispanics. She slips between them, because of course every Hispanic in America is undocumented and comes from Mexico.
Mark Krikorian, over at The National Review, takes another tack in blaming Hispanics: Washington Mutual went under because it hired too many. Here's Glenn Greenwald commenting:
National Review's Mark Krikorian notes that (1) Washington Mutual became the largest bank to fail in American history yesterday and (2) its last press release touted the fact that it was named one of America's most diverse employers, having been "honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations"; for being "named [one of] the top 60 companies for Hispanics"; for "attaining equal rights for GLBT employees and consumers"; for having "earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups"; and for being "named one of 25 Noteworthy Companies by Diversity Inc magazine and one of the Top 50 Corporations for Supplier Diversity by Hispanic Enterprise magazine."
While juxtaposing these two facts -- (1) WaMu has a racially and ethnically diverse workforce and (2) WaMu collapsed yesterday -- the National Review writer headlined his post: "Cause and Effect?" He apparently believes that the reason Washington Mutual failed may be because it employed and was too accommodating to large numbers of Hispanics, African-Americans and gays.
And here's Neil Cavuto, chastising Congressman Xavier Becerra because Congress didn't warn lending agencies not to give money to "minorities and risky folks":
Rupert Mudoch's Wall Street Journal took a similar position, except it went on, at-length, blaming Congress's penchant for "affordable housing." It's a bit more abstract, but the op-ed is definitely borrowing the language of white resentment that surrounds affirmative action programs:
If they were not making mortgages cheaper and were creating risks for the taxpayers and the economy, what value were they providing? The answer was their affordable-housing mission. So it was that, beginning in 2004, their portfolios of subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.
The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.
Then again, in an even more abstract sense, the way the solution to this crisis is being posited is racist and classist in and of itself. After years of denying basic funding to programs that help out lower-income folks, saying again and again that they were too expensive and that the people receiving them couldn't be trusted, Henry Paulson is asking for $700 billion to effectively give to a small group of people who are rich and mostly white and have proven themselves to be completely irresponsible with money.
And what's the reaction from the same people who can't be bothered to enact a food stamps program for fear that that money will get "wasted" on lobster (imagery of fictional welfare queens comes to mind)?
It may not seem this way, but Americans are a lucky people.
Last week, we did our best to destroy the financial system but somehow came through it. This week, Congress will have only 72 hours to ruin the Treasury's $700 billion mortgage plan before it recesses.
Of course, it is easy to be outraged by the Treasury's bail-out proposal. Lots of money. Lots of power. Naked, ugly dictatorial power.
"Decisions by the Treasury pursuant to the Authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Such language could have been drafted by any Third World caudillo.
But it wasn't. It was drafted by U.S. Treasury lawyers at the behest of the Secretary of the Treasury.
And Paulson isn't any Secretary of the Treasury. He doesn't need power. And he certainly doesn't need money.
Of course, he isn't a saint or Superman. He is awkward and an awful public speaker. But he is the one man that can serve as an honest broker between the banks and the taxpayers-between Wall Street and Washington.
He can do the right thing for the country. How many other people on Wall Street or Washington can we say that about?
Well, we could say it about all of them, again and again, if we wanted to.
That's the right-wing response to someone who's proven that he doesn't understand the current financial crisis asking for money to just hand out to a bunch of rich, mostly white men who've proven that they can't handle.
Compare the fact that the bailout is supposed to be instituted with no judicial or Congressional review with this story from a few days ago (keep in mind that food stamp spending projected for 2008 is about 5% that of the proposed bailout):
The raid of nine gas stations and convenience stores resulted in the recovery of more than $100,000.
Attorney General Mike Cox announced the arrests today. He says the yearlong probe uncovered that food stamp benefits were being exchanged for cash.
State and federal authorities worked on the investigation. Both store owners and employees face charges ranging from racketeering to conspiracy. Some face up to 20 years in prison if they're convicted.
I wonder how many businesses will be raided to prevent any fraud when it comes to the bailout!
It's insane how the business class, after building decades of distrust towards those who receive relatively minuscule amounts of money from social programming, is asking us to simply trust Paulson and these bankers. The difference isn't just class privilege, but white privilege, considering how imagery surrounding welfare reform constantly drifted off into racial territory.
You start out in 1954 by saying, "Nigger, nigger, nigger." By 1968 you can't say "nigger" - that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites.
And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me - because obviously sitting around saying, "We want to cut this," is much more abstract than even the busing thing, and a hell of a lot more abstract than "Nigger, nigger."
All that white privilege that Wall Street bankers are trading in right now makes the fact that conservatives are looking for some way to pin this all on minorities even more sick.
Besides that, pinning the blame on borrowers is just another distraction. Sorry, if a bank gives out a loan to someone they know won't be able to pay back because they know they'll get a profit by selling that loan in a bond and then selling credit default swaps on it, it's the bank's fault. They said they shouldn't be regulated because they could handle it themselves, so this is either their own problem to fix or we admit that they can't be left with so little regulation and that they're too important to the economy to be left to their own devices.
But that doesn't help the wealthy people who profited from this mess, so they search for a scapegoat. I don't know if we're going to go down that path in America. Considering what happened when other economic crises in history got blamed on a minority, it's not going to be pretty if we do.