In Order To Blame Bush, Liberals Engage In Historical Revisionism On Mortgages
In this post-housing collapse world a lot of people in the media have been scrambling to point fingers at President Bush and his “laissez-faire,” deregulation approach to housing issues. As laughable as it is for anyone to call Bush a proponent of limited government in housing, this is the line liberals have come up with to distract from the big-government meddling in the housing market that actually caused the collapse.
The paper of record [New York Times] blames the “mortgage bonfire” on President Bush and his “laissez-faire” housing policies. But to get there, the Times completely ignored history prior to 2002.
That’s when Bush gave a speech in Atlanta and announced a goal to increase minority homeowners by 5.5 million. According to the Times, this was the event that started the mortgage meltdown.
“He pushed hard to expand homeownership, especially among minorities,” its lengthy front-page piece asserts. “But his housing policies encouraged lax lending standards.”
If the Times had said the same thing about Bush’s predecessor, its story might have a kernel of truth to it.
Seeking to lock in minority voters for Democrats, Bill Clinton in 1993 set a national homeownership goal of 55% for blacks, a major increase from existing levels.
To achieve it, he tasked his regulators to lead an anti-redlining crusade against the banking industry that included revising Community Reinvestment Act regulations to pressure banks to adopt “flexible” lending standards for low-income borrowers.
Clinton also pressured Fannie Mae and Freddie Mac to buy not just subprime loans, but also subprime securities, to meet “affirmative action” lending quotas.
These actions — which were far more concrete than anything Bush did to encourage minority homeownership — were never cited in the Times’ nearly 5,000-word piece.
I don’t think there’s any doubt that many of our political leaders tried to manufacture home ownership among people who couldn’t really afford homes. They pressured lenders into making loans to people they wouldn’t have normally (see: Clinton’s HUD secretary Andrew Cuomo talking in favor of affirmative action for home loans and Obama’s adviser Austan Goolsbee saying favorable things about subprime loans).
Essentially, these politicians made too much credit available to people who really didn’t earn it. Those people used that credit to buy homes they couldn’t afford, and once the house of cards had been stacked high enough it collapsed.
It’s a simple failure of big-government, liberal policies.
What astounds me is how so many people seem to think that owning a home is a cause of prosperity rather than a symptom of it. People aren’t successful because they own their own homes. They own their own homes because they’re successful.
