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07/17/08 - Making Americans Unsafe, by Paul Craig Roberts

07/16/08 - Red China Goes on a Dog Diet—Beijing gets an Olympian Trim, by Brenda Walker

07/16/08 - Mexican Asylum Applicants: Early Sign Of A Failed State? by Rep. Tom Tancredo

Peter Brimelow at the Miller Center of Public Affairs in RealVideo: Is Immigration a Problem? Are the Minute Men the Answer? [Text version] [Text version of Q&A]

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07/16/08 - Diplomas Won't Make Jihadis Go Away, Barack, by Michelle Malkin

07/16/08 - Little War Criminals Get Punished, Big Ones Don’t, by Paul Craig Roberts

07/14/08 - A Phony Crisis—and a Real One, On The Path To War With Iran, by Patrick J. Buchanan

07/13/08 - Grand New Party Recycles Old (But Good!) VDARE.COM Ideas, by Steve Sailer

07/13/08 - Enabling Tyranny—Brigitte Bardot And Other Victims, by Paul Craig Roberts

07/11/08 - When MLB Owners Hear The Cash Register Ring, Diversity Is Sure To Follow—Results Be Damned! by Joe Guzzardi

07/11/08 - More Big Print Media Propaganda For Open Borders Special Interests, by Donald A. Collins

07/10/08 - Cannon’s Firing: The Treason Lobby Attempts Damage Control, by Marcus Epstein

07/10/08 - Has Bush Given Israel A Blank Check For War On Iran? by Patrick J. Buchanan

VDARE is a coalition. Some of us have distinguished oeuvres; some have deviant views (categories not necessarily exclusive). The satellite pages (click on name) represent our individual archives.

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07/09/08 - Is San Francisco At The Tipping Point? by Brenda Walker

07/09/08 - A Work Force Betrayed, by Paul Craig Roberts

07/08/08 - Memo From Mexico: More Latin Loudmouths—Mercosur Hypocritically Hectors EU On Immigration, by Allan Wall

07/08/08 - 15 Things You Should Know About "The Race", by Michelle Malkin

07/08/08 - Don't Misunderestimate Obama, by Patrick J. Buchanan

07/06/08 - The Cuban Compromise—A Sustainable Model For The Jewish Lobby, by Steve Sailer

07/06/08 - Businesses Bleat For Lax Immigration Enforcement—With Full NY Times Support, by Donald A. Collins

07/04/08 - A July Fourth Toast To Thomas Jefferson—And The Anglo-Saxon Tradition, by Ilana Mercer

07/04/08 - On Gottfried, Zmirak And White Nationalism, by Jared Taylor

07/04/08 - View From Lodi CA: Democratic Congressional Leaders Blocking Vote On Birthright Citizenship, by Joe Guzzardi

07/03/08 - The Fulford File: Independence Day—"Pomp, Shows, Games, Sports, Guns, Bells, Bonfires, And Illuminations "—But Not Immigration, by James Fulford

07/03/08 - The Loss of Independence, by Patrick J. Buchanan

07/02/08 - Sailer Is Right: Measure School Achievement Relative To IQ! by Hugh McInnish

07/01/08 - World Refugee Day: Mondo Multicult—Courtesy Of The UN And The Bush White Hous, by Brenda Walker

07/01/08 - Interviewing John Ondrasik—Hollywood Patriot, by Michelle Malkin

07/01/08 - Buchanan, MacDonogh, Pilger Books Explode Illusion Of American Exceptionalism, by Paul Craig Roberts

06/30/08 - Memo From Mexico: What’s In A (Sur)Name? Plenty, If You’re Planning An Amnesty, by Allan Wall

06/30/08 - Utah Upheaval: A Cannon Shot Across The Democrats’ Bows Too, by Donald A. Collins

06/30/08 - The Wars of Religion Return, by Patrick J. Buchanan

06/29/08 - Sailer’s Four-Point Plan For Improving Schools, by Steve Sailer

06/28/08 - Saturday Forum: A Former NCAA Division I Tennis Player Says His Foreign-Born Teammates Were “Always Ready To Take, Rarely To Give Back”; etc.

06/27/08 - Immigrant Baseball—The Bubble Bursts, by Joe Guzzardi

06/27/08 - View From Lodi CA: Independence Day and Hot Dog Gluttony, by Joe Guzzardi

06/26/08 - Towson U. "Great Debaters" Mau Mau Liberal Judges, by Nicholas Stix

06/26/08 - Who's Planning Our Next War? by Patrick J. Buchanan

06/25/08 - Memo To Obama: Denounce Sharpton—Have A Real "Sister Souljah Moment"! by Marcus Epstein

06/25/08 - Democrat Finally Can Offer Government Some Applause On Immigration Policy, by Donald A. Collins

06/24/08 - Egalitarian Orthodoxy: “Noble Fiction”—Or Noxious Poison? by Jared Taylor

06/24/08 - Voter Fraud And Neosocialism—The ACORN Obama Knows, by Michelle Malkin

06/24/08 - Morality—Trotskyite vs. Christian, by Patrick J. Buchanan

06/22/08 - The College Paradox: Not Everyone Gains By Higher Education, by Steve Sailer

06/21/08 - Saturday Forum: A New York Reader Says Our Realistic Analysis Of Lou Dobbs’ Immigration Views Is “Long Overdue”; etc.

06/21/08 - A Totally Lawless Regime, by Paul Craig Roberts

06/20/08 - Dianne Feinstein: You May Not Agree—But I Say She’s Senile! by Joe Guzzardi

06/20/08 - View From Lodi CA: Obama Versus McCain—Who Has The Edge In Intangibles? by Joe Guzzardi

06/19/08 - Mothers Against Drunk Driving: Successful Reformers—Or Hypocrites from Hell? by Brenda Walker

06/19/08 - Was the Holocaust Inevitable? by Patrick J. Buchanan

06/18/08 - E-Verify Is Working. That’s Why It’s Threatened In Courts And Congress, by Marcus Epstein

06/18/08 - John Yoo, Totalitarian, by Paul Craig Roberts

06/17/08 - Memo From Mexico: Say It Ain’t So, Brian Bilbray! Time To Dump U.S-Mexico Interparliamentary Meetings, by Allan Wall

06/17/08 - US Marines Vs. Haditha Smear Merchants, by Michelle Malkin

06/17/08 - Obama Grovels To Lobby— GOP Grovels To Tyranny, by Paul Craig Roberts

06/16/08 - Richard Lynn’s The Global Bell Curve—The Explanation That Fits The Facts, by J. Philippe Rushton

06/16/08 - Return of the Censors, by Patrick J. Buchanan

06/15/08 - How To Think About Race—And Barack Obama, by Steve Sailer

06/15/08 - Israel Proves Border Fences Work—But Candidates/Congress Don’t Want To Know, by Donald A. Collins

06/14/08 - Saturday Forum: A Reader In Puerto Rico Wonders If Islanders Really Consider Themselves Americans; etc.

06/13/08 - Meet Rose—A Prospective Fiancée Visa Bride Currently Working In A Filipino Sex Club, by Joe Guzzardi

06/13/08 - View From Lodi CA: Long List Of Conspirators In Maria Isabel Vasquez Jimenez’s Death, by Joe Guzzardi

06/12/08 - The 'Good War' and the Terrible Peace, by Patrick J. Buchanan

06/11/08 - Return To The Jungle—Open Borders Wiping Out A Century Of Labor Progress, by Brenda Walker

06/10/08 - Progressive Perspective: Hispanic Nationalists And American Nationalists Unite—And Soak The Rich! by Randall Burns

06/10/08 - Why the Oil Price Is High, by Paul Craig Roberts

06/10/08 - D'OH-bama's Mortgage Industry Mess, by Michelle Malkin

06/09/08 - Memo From Mexico: Mexican “Family Values” Won’t Improve America? by Allan Wall

06/09/08 - How Obama Won—and May Win, by Patrick J. Buchanan

06/08/08 - Social Engineers Move Inner City Crime To Suburbs (Developers Delighted!), by Steve Sailer

06/07/08 - Saturday Forum: A CA Lawyer Says Ted Kennedy Couldn’t “Carry His Own Water On A Simple Test”; etc.

06/06/08 - Janet Murguía: Multiple Amnesty Failures Have Unglued Her—Will She Lose Her Job, Too? by Joe Guzzardi

06/06/08 - View From Lodi CA: The Sunday Night Drive Remembered, by Joe Guzzardi

06/05/08 - “Triple” Legal Immigration? Say It Ain't So, Lou Dobbs! by Brenda Walker

06/04/08 - “Immigration Is The Viagra Of The State”—A Libertarian Case Against Immigration, by Peter Brimelow

06/03/08 - A Progressive Indictment: How Pilgrim’s Pride Can Really Live Up To Its Name, by Randall Burns

06/03/08 - Planned Parenthood's Obscene Profits, by Michelle Malkin

06/02/08 - National Data: A Nation Of…Emigrants? by Edwin S. Rubenstein

06/02/08 - Munich, 1938 And The Unnecessary War, by Patrick J. Buchanan

06/01/08 - Roll Over, Michael Barone—Even Fourth-Generation Mexicans Are Failing, by Steve Sailer

Prior 2008 Articles...

07/18/08 - View From Lodi CA: Leaving Lodi and Saying Adiós To California, by Joe Guzzardi

07/17/08 - Barack And Michelle—The Untouchables, by Patrick J. Buchanan

The Housing Recession: Political Correctness Makes Lenders Stupid

By Steve Sailer

The American economy is sinking under the weight of trillions in dubious home loans, as exemplified by this month's failure of Pasadena-based mortgage lender IndyMac and the Treasury Department's plan for a taxpayer bailout of the privately-owned but "government sponsored" Fannie Mae and Freddie Mac. Savers are increasingly finding the value of their assets inflated away as the Federal Reserve Board devalues the dollar to spread around the suffering from bad loans.

Traditionally, markets work by balancing greed and fear. Why was greed allowed to outrun fear so badly this time?

One clue comes from looking at the places with the sharpest decline in home prices, such as California, South Florida, Arizona, and Nevada. For example, the median price of homes sold in California last month was $328,000, down 31.5 percent from a ridiculous $484,000 in June 2007. Almost 42 percent of all homes sold in California were in foreclosure.

Why did the housing bubble get out of control in many heavily Hispanic regions?

Because many important people wanted it to.

A widely overlooked reason behind this economic disaster is that the politicians, real estate interests, and financiers told the public that they weren't speculating wildly on the insane hope of home prices rising forever. No, they were actually helping minorities share in the American Dream!

A percipient April 13, 2007 article in the nonprofit San Diego Voice by Kelly Bennett, Foreclosure Wave Said to Hit Latinos Hard, reported:

"This decade, a national push to increase homeownership among Latinos coincided with one of the longest, most dramatic periods of appreciation for home values. Latino mortgage and real estate professionals put forth aggressive outreach campaigns in the community, while lenders reached out to huge, untapped sections of the market by loosening qualifying standards. …

"Because a widened lending gate allowed many more Latinos and other minorities into the housing market than had entered previously, lawmakers and special interest groups championed the lenders' efforts to extend homeownership to those groups."

It's important to understand that practically every politician who comes up through the ranks from state and local government owes favors to real estate interests. (Consider how now-convicted slumlord Tony Rezko sponsored Barack Obama's career.)

 Why? Because developers are more interested in local and state politics than anybody else is. (C'mon, admit it, local politics seem kind of boring.) They're interested because they have financial interests in land use decisions.

Politicians control developers, so developers control politicians.

Thus, politicians, developers, and financial institutions have developed a vast interlocking system of doing subtle favors for each other by leaning on the lending process. It all works smoothly for years at a time with nobody on the outside the wiser … until there's a downturn. Suddenly, the public is left holding the bag, paying off both directly and through enduring stagflation.

Diversity served as the perfect politically correct excuse for rampant irresponsibility. It gave insiders a rationale for putting their thumb on the scales of the vast lending market in the sacred name of anti-discrimination. Who dared be so racist as to argue that blacks and Hispanics should get fewer loans per capita because they were less likely to pay them back? That's "the soft bigotry of low expectations."

In a June 22 article in Taki's Magazine, The Diversity Recession, I recounted a few of the countless examples of politicians from Jimmy Carter to George W. Bush pushing for more lending to "underserved" minorities. The Bush Administration, for instance, raised the quota for Fannie Mae and Freddie Mac to 39 percent for "underserved" regions.

Perhaps worse than quotas, though, was the attack on traditional lending standards in the name of expanding minority homeownership. We've seen repeatedly over the decades that, bad as they obviously are, racial quotas are often less debilitating than eliminating tests altogether due to their "disparate impact." At least with a quota you select the best people from each race (although, by definition, not the best overall). When you junk the standards altogether, however, you end up taking at random from all races.

For example, in January 1981 the outgoing Carter Administration threw out the federal civil service exam, the exquisitely validated PACE, because blacks and Hispanics didn't perform as well on it on average. Since then, federal employees have been hired mostly on the basis of resumes and interviews, which explains a lot about the decline in the competence of the federal government.

Likewise, the mortgage industry once had traditional tests of creditworthiness, such as being able to afford a substantial down payment. Being able to put cash on the barrelhead provided tangible evidence that you weren't just making up the numbers you were putting down on your loan application.

But the politicians encouraged lenders to speculate on dubious borrowers, all in the name of racial equality. For example, MSNBC stated in a March 27, 2004 report subtitled "President wants to add new minority home owners" that Bush was putting the Presidential imprimatur on the no-money-down mortgages that so exacerbated the bubble:

"He also proposes to make zero down-payment loans available to first-time buyers whose mortgages are guaranteed by the Federal Housing Administration."

Similarly, "undocumented workers" and undocumented mortgages (colloquially known as liar loans) tend to go together.

The mortgage brokers were notoriously abusive, putting innumerate clients into teaser mortgages that reset the monthly payment sharply upward after two years. What's seldom mentioned, though, is that Hispanics generally turned to Hispanic mortgage brokers. Bennett observed:

"Among minorities, the pull toward using an agent or a loan broker from the same minority group is strong… 'People tend to go with a loan broker or officer that they know,' said Gabe del Rio, director of homeownership for Community HousingWorks, a nonprofit housing organization in San Diego. 'Everybody's got a cousin or a friend who's in the business. And, especially in ethnic communities, there's a propensity to stay with someone you know.'

"But sometimes, the broker the borrowers know is also the broker who takes advantage of them, abusing the trust of their client by tacking on fees or inadequately explaining the terms of the contract they're signing."

Spanish-language radio stations are now hurting badly because so much of their advertising came from Spanish-speaking mortgage brokers and real estate agents.

An article in today's San Diego Union-Tribune, Busted neighborhoods: Foreclosures ravage parts of county where many used risky loans, by Lori Weisberg and Emmet Pierce confirms Bennett's findings from 15 months ago:

“'Any place where there's a high density of lower-income and less-educated Hispanics and African-Americans you'll see a larger decline in values because many of these families were put into subprime loans they didn't understand and shouldn't have qualified for, more so than in other ZIP codes,' said Clifford Arellano, a real estate broker whose office is in Barrio Logan.

Not surprisingly, illegal immigration has played a big role in bubble and bust:

"A large share of those who took out risky loans were recent immigrants who spoke little English, said Gabe del Rio, vice president of lending and homeownership at Community HousingWorks, a nonprofit developer of affordable housing. Many who have come to his agency for counseling say they didn't understand the terms of their loans."

The homeowners who have been meeting their obligations are suffering collateral damage:

"Residents forced to vacate their homes leave a void in the neighborhood, said Enrique Gandarilla, executive director of the City Heights Business Association…  'It's only getting worse. A lot of loans were made to people who never should have gotten them. The impact on the community is terrible. You have vandalism. You have deterioration in values. You see homes that now are targeted by graffiti.'"

The article sums up what will be the verdict of history on America in this decade:

"Typically, a severe housing slump is preceded by a recession and job losses, but that is not the case this time around, [John Karevoll of DataQuick] said. 'So now all us number crunchers are scratching our heads. This wasn't caused by a recession, but by stupidity.'"

But it's not just the fault of stupid borrowers, although a national policy of importing more of them by not enforcing the immigration laws clearly worsened the problem.

Stupidity extended all the way up the hierarchy—and that was intentional.

Political correctness makes people stupid, so diversity provided the ideal cover story for financial crime of the century.

[Steve Sailer (email him) is founder of the Human Biodiversity Institute and movie critic for The American Conservative. His website www.iSteve.blogspot.com features his daily blog.]

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