03 March 2013

Responsibility for the mortgage crisis

There's a line of movement conservative propaganda which blames not the financial industry for the mortgage lending crisis which triggered the 2008 financial crisis, but rather blames irresponsible homebuyers taking out loans for more house than they can afford. An article at Columbia Journalism Review provides a bunch of links to resources exploring that story in the course of criticizing a magazine cover for Bloomberg BusinessWeek which plays off of the racist dimension of this telling of the mortgage crisis (because of course those irresponsible homebuyers are people of color).

The narrative of the crash on the right has been the blame-minority-borrowers line, sometimes via dog whistle, often via bullhorn.

It’s a narrative that has, not coincidentally, dovetailed with “Obamaphone” baloney, the ACORN pseudo-scandal, and Southern politicians calling the first black president “food-stamp president,” and is meant to take the focus off the ultimate culprits: mortgage lenders with no scruples and the Wall Street banks who financed them.

In fact, though, the record is clear: minorities were disproportionately targeted by predatory lending, which has always gone hand in hand with subprime. Even when they qualified for prime loans that similar-circumstance whites got, they were pushed into higher-interest subprimes.

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