April 30, 2009

Rick Perlstein almost figured out the Mortgage Meltdown in 2007

Mike at RortyBomb just pointed out to me an insightful four-part series from way back in July 2007 called "The Foreclosing of America" by liberal journalist Rick Perlstein, author of Nixonland, which is all about evil Republican racists. Perlstein's theme was how the Bush Push for the "Ownership Society" led to the Housing Bubble:
What with all the best-dressed Republican strategists speaking of homeownership for one and all as the royal road to permanent Republican rule, what with Bushies constantly boasting of increasing a homeownership rate of 65 percent in 1996 to 69 percent in 2002 - well, might some order for all these regulators to stand down come directly from the White House?

That's a question above my pay grade. It's the kind of question only historians are able to answer decade later, sifting through memoranda in presidential libraries (which is why this White House kneecapped the Presidential Records Act that puts such memos in the public domain; lawyers call this "mens rea").

What we do know now is that that the positive policies the Bush White House has actually put forward to realize greater homeownership bear no relationship whatsoever to the importance, politically and policy-wise, the White House claims to place on the problem. For all intents and purposes, it's been but a single program - the American Dream Down-payment Fund, funded at a paltry $200 million. Let's do a little math. There are, by last count, 73.4 million homeowners. Rough-and-ready, without adjusting for population increase, a homeownership rate of 67.4 percent in 2000 and 68.9 percent in 2005 - and stat-heads, correct me if I'm wrong - we're talking about approximately 1.1 million new homeowners. That's a one-hundred-eight-one buck subsidy for new homeowner. I have to imagine, if Karl Rove was relying on more homeowners to help mint more Republicans, he'd be making some greater effort above and beyond this?

Was Karl Rove relying on all those NINJA loans instead? Was the White House, sub rosa, encouraging them? It's not hard to imagine. If so, how well and truly rogered the Republicans finds themselves. One more Bushian house of cards has collapsed. If only the damage could be contained within the political fortunes of the Republican Party.

I wish I had read Perlstein's series earlier. Despite his insightfulness, Perlstein got zero traction with this line of argument.

One obvious problem was that he didn't present any direct evidence of Bush sending secret signals.

And yet, Perlstein didn't need to speculate about secret signals from the White House to federal regulators about backing off on enforcing credit standards and to mortgage lenders to Go For It. Instead, Bush's messages were sent in the form of Presidential Addresses.

Heck, Bush had an official mural painted to get his message across, presumably so that his point wouldn't be missed by even potential minority subprime borrowers who happened to be illiterate.

So, why didn't Perlstein simply quote Bush's speech from the October 15, 2002 White House Conference on Increasing Minority Homeownership in which Bush said down payment requirements were the chief barrier to adding 5.5 million minority homeowners to eradicate the racial gap in access to the American Dream?

Now you can see just how powerful was the juju that Bush and Rove were wielding. Here's Rick Perlstein, as fine a hater as you can want, and yet it's more important to him and his readers to denounce Republicans as racists than to denounce Republicans effectively. If Perlstein had tried to quote Bush's speech on "Increasing Minority Homeownership," his head would have exploded.


bjdouble said...

Gene Epstein at Barrons had nailed the problme with the ownership society years ago. I haven't been able to find the articles though.

Anonymous said...

The irony is delicious.

Perlstein thinks that Bush et alia screwed over minorities out of *racism*.

Actually, they screwed them over out of *antiracism*.

Kind of like a lot of other policies, in fact.

Anonymous said...

Where is the evidence that Perlstein is a fine hater who calls Republicans racists?

Lucius Vorenus said...

Anonymous: The irony is delicious. Perlstein thinks that Bush et alia screwed over minorities out of *racism*. Actually, they screwed them over out of *antiracism*.

Dude - The Left doesn't do humor, or introspection, or - Cthulhu forbid - irony.

Soul Searcher said...

A liberal making this argument should give you some credibility.

AmericanGoy said...


AmericanGoy said...

This was, as is usual in America, about $$$, not racism or whatnot.

Eric said...

I like how he constructed a straw man Bush to attack - SOP for liberal pundits - when the real Bush was worse than the straw man. This is funny.

Cat Patrol said...

The problem facing White America is that the Republicans have painted themselves into a corner on the immigration/Hispanic issue.
For years and years the GOP turned a blind eye to the problem for the sake of business donations. Well here it is 2009 and there are an estimated 20-30 million illegals. At least 15 percent of the population is hispanic, and they are much younger than the general population. They let em in, now they fear offending them.