On Tue, Oct 7, 2008 at 8:48 PM, Perelman, Michael <[EMAIL PROTECTED]> wrote: > I don't recall if Robert Gordon's article was posted earlier, but it is > relevant to the discussion. > > http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
Shemano was responding to this in the April post. He falls back here on some argument about general subsidy of home ownership--doesn't explain why the bubble occurred in this particular moment--and merely insinuates the more problematic arguments about the removal of anti-redlining laws that he made in March: <on March 11, DAVID SHEMANO SAID:> prior to anti-redlining laws, there was absolutely no difference in the default rates between white and black borrowers, so even assuming bankers discriminated based upon race (which I am willing to assume for purposes of discussion), the discrimination was evident the bankers were doing what they were supposed to be doing -- making creditworthy loans. If we make the collective decision, through our government, to require bankers to make loans to people who are going to default at higher rates, that is fine, but let's be clear in understanding the consequences. <END QUOTE> In this, he buys completely the line of Liebowitz, which is to insinuate that there was some objective measure of creditworthiness that mapped fairly clearly onto race and that the discrimination that existed was valid on objective terms, --that the Fed reports in 1992 were motivated by bad data (race only figures "for purposes of discussion") --by extension that the changes at the CRA and the faulty Fed paper are solely responsible for the weakening of standards, a process which was motivated by bleeding heart liberal thinking on diversity, etc. (though now we drop the race issue because, in actuality it WORKED to increase home ownership for people who were, evidently, being discriminated against based either on the "objective" understanding of creditworthiness or the "speculative" subjective understanding of racially motivated redlining) --And so we shift back to the argument that, though there is some recent changes to the banking industry, recent events in the world financial markets and in the global investment boom in real estate, the real issue is this general loosening of standards (or the "Subsidizing of housing for people who couldn't afford it" as opposed to eliminating the discriminatory lending practices. --Doug's valid point about this as a political strategy, in place of actual gains in wages or social safety net would fall on deaf ears for Shemano because he doesn't think it should do that either. It would just create distortions of a different kind, upsetting the natural liberty and freedom of the market by, again, forcing the owners of _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
