I keep reading articles trying to explain the mortgage meltdown, but the mainstream media's coverage almost utterly ignores George W. Bush's war on down payments in his effort to boost minority homeownership by 5.5 million. On Google News, the only reference over the last month to Bush's 5.5 million household goal are columns by Rod Dreher and Ross Douthat, both of whom no doubt heard about it from me.
It's like that Star Trek episode where an evil computer takes over, but Kirk and Spock make it overload its circuits by posing logical conundrums for it to figure out like:
The next thing I will say is a lie.
The last thing I said is the truth.
Or maybe not exactly that (it's been 40 years since I watched that episode), but close.
Anyway, in regard to Bush's plan to expand minority homeownership by debauching traditonal credit standards, the media reason (read with Stephen Hawking-style computer accent):
Bush is evil.
Minorities are good.
DOES NOT COMPUTE.
Best not to think about it or smoke will come out of our brains. Let us never mention it again.
I did notice that James Bovard figured out what was going on over three years ago in a June 11, 2005 column for Lew Rockwell entitled "Bush Profiteering from Housing Defaults." It also explains what the Nehemiah Corp. is up to:
President Bush is determined to end the prejudice against people who want to buy a home but don’t have any money. Since he became president the U.S. Department of Housing and Urban Development has spent more than $120 billion. HUD public-housing projects continue to devastate poor neighborhoods. HUD largesse to local governments continues to finance the confiscation and demolition of private homes, and HUD programs continue to spur fraud and corruption around the nation.
Bush has done almost nothing to reduce HUD’s damage to America. Instead, he is devoting himself to expanding home giveaways. He proclaimed on June 16, 2003,
Homeownership is more than just a symbol of the American dream; it is an important part of our way of life. Core American values of individuality, thrift, responsibility, and self-reliance are embodied in homeownership.In Bush’s eyes, self-reliance is so wonderful that the government should subsidize it.
Bush could be exposing taxpayers to tens of billions of dollars of losses, luring thousands of low- and moderate-income people to the heartbreak of losing their first house, and risking wrecking entire neighborhoods. Bush’s housing initiatives – especially his “American Dream Down Payment Act” to give free down payments to selected home buyers – were key planks in his reelection campaign. He is also pushing Congress to enact a law to permit the feds to give zero-down-payment mortgages.
The Bush “Dream Act” and the zero-down-payment plan are modeled after “down-payment assistance programs” that have proliferated in recent years. These programs, often engineered by nonprofit groups, routinely involve a home builder giving a “gift” to the nonprofit, which provides a home buyer with money for the down payment. The price of the house is sometimes increased by the same amount as the builder’s “gift.” Almost all the mortgages created with down-payment assistance end up being underwritten or guaranteed by either the Federal Housing Administration (FHA) or Ginnie Mae (the Government National Mortgage Association).
Free down payments carry catastrophic risks. The default rate on mortgages from the largest down-payment-assistance organization, Nehemiah Corp., is 25 times higher than the nationwide mortgage-delinquency rate, according to the HUD inspector general. The default rate on Nehemiah mortgages quadrupled between 1999 and 2002, reaching almost 20 percent. The I.G. warned that permitting the Federal Housing Administration to insure mortgages made with gifts from down-payment organizations is “endangering the FHA insurance pool.” HUD currently has no idea how many of the loans that the FHA is underwriting are closed with down-payment gifts.
Bush began pushing his American Dream Down Payment plan in 2002. The administration’s rhetoric echoed the 1968 Housing Act, which nullified state and local restrictions on where blacks and other groups could live. A June 17, 2002, White House Fact Sheet declared that Bush’s agenda
will help tear down the barriers to homeownership that stand in the way of our nation’s African-American, Hispanic, and other minority families by providing down-payment assistance. The single biggest barrier to home-ownership is accumulating funds for a down payment.The Bush administration sounded as if requiring down payments is the new version of Jim Crow laws.
My published articles are archived at iSteve.com -- Steve Sailer
That's because the administration of George W. Bush is, definitionally, "The Most Conservative In US History."
ReplyDeleteAlthough, umm, wait, hang on, I'll think of something he's done conservative. Embarking on two land wars in Asia? (One in AFGHANISTAN?) Massive new entitlements for surviving to late-middle-age? Eviscerating the Constitution? Massive new federal bureaucracies at the cabinet level? Unfunded mandates? Rehabilitation of illegal, scratch that, "undocumented workers"? Funding of ongoing operations through mass inflations of the monetary supply? Further fundings of ongoing operations through mass borrowing from China? Embarking on a crusade, scratch that, operation, to end evil in the world?
We is become a Seinfeld nation: a nation about nothing.
Bush famously said (of Iraq) "it will take time to restore chaos". Eight years of presidency seems to have been just about sufficient time for him to have achieved this aim.
ReplyDeleteMission accomplished, I'd say.
While Bush/Rove's jihad against the down payment was obviously part of of a program to attract Hispanic votes, it should also be viewed as a payoff to the homebuilders and the mortgage lenders. Bush/Rove expected relaxed credit standards to goose new home construction and residential real estate sales in general.
ReplyDeleteThey expected their plan would attract votes from Hispanics (maybe even blacks!), help homebuilders and mortgage lenders (who had contributed campaign cash), as well as help the overall economy.
Win-win-win-win!
That Karl Rove is a genius.
Never be surprised to find false information or lack of relevant information in media. Hayek explained ( http://mises.org/etexts/hayekintellectuals.pdf ) the phenomenon half century ago:
ReplyDelete"Even though their
knowledge may often be superficial and their intelligence limited, this does not alter the
fact that it is their judgment which mainly determines the views on which society will
act in the not too distant future. It is no exaggeration to say that, once the more active
part of the intellectuals has been converted to a set of beliefs, the process by which
these become generally accepted is almost automatic and irresistible. These intellectuals
are the organs which modern society has developed for spreading knowledge and ideas,
and it is their convictions and opinions which operate as the sieve through which all
new conceptions must pass before they can reach the masses."
Captain Kirk: Harry lied to you, Norman. Everything Harry says is a lie. Remember that, Norman. *Everything* he says is a lie.
ReplyDeleteHarcourt Fenton Mudd: Now I want you to listen to me very carefully, Norman. I'm... lying.
Norman: You say you are lying, but if everything you say is a lie, then you are telling the truth, but you cannot tell the truth because you always lie... illogical! Illogical! Please explain! You are human; only humans can explain! Illogical!
"Bush is evil.
ReplyDeleteMinorities are good.
DOES NOT COMPUTE."
That's too complex. All they get to is "minorities are good" and that right there stops further analyses of loans targeted to them. Doesn't matter who gave them to them: minorities are good, giving loans to them is good therefore that can't be the problem, move on to other possible explanation.
Come on, Steve. You can't take and utilize my "robot in a conundrum" insight - like you did months ago with my "reductionist humor" comment - and yet refuse to post other comments because I mention "Shiksas are for practice" teeshirts. It's downright unethical. LOL.
ReplyDeleteWay off topic, but at a decadent Hollywood party on location last night I met a black dwarf who told me that he has four children, ages 5-18. He owns his own house, is happily married (so he said), and seemed well adjusted. I contrasted him to all the drunken whites, talented people by many measures, many of whom have no desire for offspring at all. The weirdness of evolution.
The next thing I will say is a lie.
ReplyDeleteThe last thing I said is the truth.
I think I saw that episode as a rerun. In the one I saw Spock said to the robot/computer "I am lying."
Bush is a liberal. A good old-fashioned northeastern Republican liberal of the same mold that produced Rockefeller, Javits, Weicker, Brooke, etc. He was transplanted to the south and picked up a Texas twang that somehow eluded his siblings, even though he was sent back east to attend attend all the best schools. As Cossack points out, it's genuinely hard to name a conservative initiative with Bush's signature on it. Maybe the stem cell thing. OK. He's a pro-life liberal, unlike Laura.
ReplyDeleteWe have Reagan to thank for him, BTW. That is, unless you think W would have become President even if his father hadn't preceded him in office. But 41 never would have been 41 if Reagan hadn't picked him as his running mate, which he did to "balance" the 1980 GOP ticket with a northeastern liberal.
That is the only sense in which Bush's lousy presidency can be blamed on conservatives.
I am Lugash.
ReplyDeleteYou also can't swing a no-doc mortgage without hitting a couple dozen Democratic hacks on the boards of Fannie, Freddie and Countrywide.
I am Lugash.
Well, the media haven't been putting a lot of blame on the subprime aspect of all this *in general*, not just as it connects to Bush. To the extent I've finally started to hear it discussed it has to be a) bundled into a laundry list of other more politically correct causes like leveraging and b) it's something "we" did or the "government" did; names are never named, neither Bush nor the Democrats the media want to protect.
ReplyDeleteSteve: "The Bush “Dream Act” and the zero-down-payment plan are modeled after “down-payment assistance programs” that have proliferated in recent years. These programs, often engineered by nonprofit groups, routinely involve a home builder giving a “gift” to the nonprofit, which provides a home buyer with money for the down payment. The price of the house is sometimes increased by the same amount as the builder’s “gift.”"
ReplyDeleteFascinating! That story explains a lot. When I was selling my last house in the Midwest, a Hispanic realtor sold it to a black single mother who had two little bastards in tow.
They were trying to talk me into some "home program" in the Midwestern city I came from. They were trying to explain how they would buy the house for more than I wanted ... but not really.
If I would agree to this minority welfare scam, they would pretend that the house sold for $40K more than I was asking, and they would give the "extra" $40K to the bank as a down payment (with a little left over to buy her new appliances!)
I kept asking what they meant by "sell". I asked who they proposed should pay taxes on the extra $40K profit on the house. I wondered about fraudulent conveyances and the like. They started their jabbering and 'splainin' and eventually got bogged down in some handwaving Hispanic/Ebonic gibberish.
At the time I suspected they were running some kind of welfare agency/real estate scam and declined their offer.
Last thing I wanted to see was my mug shot alongside some sleazy black and Mexican welfare queen/scam artist/realtors in the state paper.
Noe I see it was a welfare scam set up by George Bush!
I've been predicting for a few months now that the Obama administration will be Bush III.
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