In reply to Sean Andrews: Without any intended sarcasm, I truly appreciate that you read, seriously thought about, and bothered to respond to what I wrote many months ago. Therefore, I feel compelled to apologize for failing to substantively reply to your post. Unfortunately, you covered too much and I am at a loss to respond with my usual brevity and punchiness, which is all that time normally permits.
David Shemano --- Original Message--- To: "Progressive Economics" <[email protected]> From: "Sean Andrews" <[EMAIL PROTECTED]> Sent: 10/07/2008 9:35PM Subject: Re: [Pen-l] Community Reinvestment Act at fault -- NOT >> 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 >> >> >> _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
