A reader sent me a link to yet another smoking gun NY Times article from 1999 demonstrating how the current credit crisis came about.
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
We see that the motivation behind loosening credit was to give more loans to minorities. Liberals failed to consider that these minorities were inherently bad credit risks, because we all know that credit standards are how the white racist majority keeps the black man down.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
We see that the Democratic Clinton Administration was pushing for looser credit to help minorities. There's also a mention of stock holder profits. It was wrong that anyone was profiting from the implicit assumption that the government would stand behind bad Fannie Mae debt. It's an example of making money through value transference--transferring value from the taxpayers to Fannie Mae.
[Franklin D. Raines, Fannie Mae's chairman and chief executive officer, and also a black man, said:] ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
"Too many" borrowers have bad credit. So the solution to this perceived social problem is not to change the behavior of the borrowers (if that's even possible given their genetic deficits), but to just lower lending standards.
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
Yes, lending standards be racist.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
A conservative warns of the problem, but he is ignored by Democrats because Democrats and liberals know that the conservative is motivated by racism.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
It's all clear. The big financial mess we're in today was due to failure of liberals and Democrats to acknolwedge the genetic deficits of the poor and of non-Asian minorities. Proper lending standards are called "racial discrimination," and something had to be done about it.
I didn't mean to imply that non-Asian minorities are morally responsible for the crisis. After all, it's not their fault they are born with bad genes. The moral responsibility is with liberal elites who refuse to acknowledge the genetic problem and insist against all evidence that everyone is born with exactly the same cognitive attributes.