August 30, 2009

"Our Lot"

From my new column:
Our Lot: How Real Estate Came to Own Us by Alyssa Katz, a liberal journalist who writes for Mother Jones, is the best book yet on how the sacred cause of “diversity” merged with pedal-to-the-metal capitalism to bring us the Great Mortgage Meltdown.

The book hasn’t garnered the attention it deserves—probably because it makes clear the bipartisan responsibility of both her opponents on the Right and her friends on the Left.

Our Lot focuses equally on the misdeeds of both capitalists and leftists. But I won’t give the boiler room boys as much attention in this review because they’re a more familiar tale, while Katz’s reporting on the role of her side is compelling “testimony against interest.”

Katz is remarkably frank about how government programs and political pressure to boost minority homeownership helped blow up the economy. She’s particularly good at explicating how leftist housing activists, such as ACORN and Gale Cincotta, the godmother of the Community Reinvestment Act, worked with Democratic politicians such as Bill Clinton, HUD Secretary Henry Cisneros, and Jim Johnson, CEO of Fannie Mae, to lay the groundwork for the Bubble and Bust.

Katz doesn’t devote quite as much depth to the Bush Administration’s culpability (which, to my mind, is even greater). Perhaps she lacked Republican contacts to give her the kind of inside story she got on her own party’s mistakes.

Still, Our Lot makes clear that on housing policy, the Clinton-Bush years form a single continuum with one overarching plan: boost the minority homeownership rate by lowering credit standards. I call it the Era of Multi-Culti Capitalism.

And there’s little reason to think that its lessons have been learned yet.

My published articles are archived at -- Steve Sailer


Xtra Laj said...

Is it that much better than Sowell's book?

agnostic said...

The Independent Institute is putting out a book, Housing America, that looks good. It's got Stan Liebowitz's "Anatomy of a Train Wreck." Should be out now or very soon.

Henry Canaday said...

The latest issue of City Journal has a history of Federal efforts to artificially boost home-ownership rates, dating back to the Hoover administration. The article says that these efforts have frequently led to periodic financial crises, small or large. The push for home ownership starts out fairly realistic, then progressively becomes more unrealistic as voters’ interests and political temptations corrupt policy. Until the latest Diversity programs were in place, all these programs were directed to benefit the largely white middle class.

Viewed this way, the latest catastrophe stemmed from risky policies adopted for the white majority being further corrupted by an effort to close gaps in minority home ownership before the racial gaps in income and responsibility were closed.

Again and again our affirmative action follies were built on Federal policies that once sought to use government to enable the white working and middle classes to subsidize themselves. The many racially-motivated Federal interferences in employment decisions were built, after all, on the New Deal’s assertion of a Federal right to regulate in detail wages and other local employment practices.

I would argue that Federal housing policy was also responsible for our other major post-World War II economic disaster, the stagflation of the 1970s. This grim period was rooted in the Federal Reserve’s unwillingness to accept moderate unemployment to control inflation in the late 1960s and early 1970s. But the Fed was only reflecting the values of its political masters, who in turn were reflecting the desires of voters. Middle- and upper middle-class voters, who should have been staunchest in resisting inflation, were casual about it because they owned homes that appreciated with inflation while these homes were being paid for by 30-year fixed mortgages at the very low interest rates on the late 1940s and early 1950s.

A Friedman-Occam interpretation of all this might be that we should simply not be using government to manipulate ordinary private economic decisions, except to remedy true market dangers, such as risky banking practices.

Big Bill said...

We HAVE to lower standards if we are to incorporate NAMs into American culture. America must "dumb down" and act stupid.

The problem (or benefit, depending on your goals) is that one cannot tell where the "dumbing down" is causing problems.

For example, we can track lowered credit standards, their causes and their effects, but how do we track the effects of the Mexification of the fire jumper corp in California, for example?

There was a story five years ago about the feds hiring non-English speaking Mexican illegals as forest fire fighters and the problems it was causing.

Since then, all is silence.

How many people are dying and acreage is burned because of non-English-speaking illegals becoming the core of the firefighting force?

Katto said...

Steve! You probably read many months ago, as I did, that people were predicting a second wave of mortgage-related financial crisis; this second wave was to involve commercial real estate. See the current WSJ article: "Commercial Real Estate Lurks as Next Potential Mortgage Crisis"

Was there any racial/affirmative-action angle in this commercial real-estate stuff? You're the man to judge.

Anonymous said...

THANKS, Liberals!

spacehabitats said...

THE CONUNDRUMS OF INTEGRATION" that you reference in your VDARE article to be a fascinating example of missing the obvious through observing the world through ideological eyeglasses.

The "Black-a-Block" strategy works because it caters to the legitimate and very natural (dare I say sociobiological)tendencies for people to feel safer and happier living in a community dominated by their own kind.

After all, hunter-gatherer tribes in Borneo will schism along lines of genetic consanguinity when the village exceeds a population of 250. Is it any wonder that neighborhoods will flee when a critical racial balance is reached?

These feelings, of course, are never acknowledged as legitimate (i.e. politically correct) because they justify racial segregation.

Besides the rational (and conscious) concerns of whites for their property value and school quality; these innate, evolutionary psychosocial tipping points should not be ignored.

silly girl said...

It would be interesting to see the what percent of white families where the man and woman have been married at least ten years and then compare that to other ethnic groups where the couple have been married at least ten years. There may be a correlation to the length of marriage and rate of homeownership that is stronger than the racial trend. If you eliminate from consideration unmarried or recently married, then you are comparing more apples to apples.

Anonymous said...

Can someone post the URL to the reference for the Black-a-block strategy in Oak Park. I clicked on the link but got a 404 error.