Talk About Getting it Backwards
In the United Kingdom there is an over-paid and perfectly superfluous civil servant, Trevor Phillips, who earns his self-important living as the chief of the “Equality Commission”.
The Daily Telegraph reports that in a speech to be delivered before the Policy Exchange think tank,
he will argue that the phenomenon of subprime home loans, which led to the 2008 banking collapse, emerged because even wealthy black families could not obtain regular mortgages.
“it’s not a thing that the bankers and economists like to talk about, but the American financial crisis was precipitated at least in part by racial prejudice.
“Why were so many minority families taking these expensive loans?
Because discrimination left them with no choice.
“The rapid growth of the sub-prime market in the past decade probably owed more to the history of racial discrimination than any other factor.” [my emphasis]
Racism did not cause the crisis … we would probably have faced a meltdown at some point even if all the loans had been to white folks. [my emphasis]
… there is no doubt that when the full story is unravelled we’ll find that a racial factor did play a role in what happened.
In other words, racist United States bankers are to blame for the credit crisis.
Now, my understanding is that where a racial factor played a part in the credit crisis was in the desire by a number of United States presidents, particularly Bill Clinton and G. W. Bush, to increase home ownership among Blacks and Hispanics. As it was pointed out in 2008,
To encourage broader homeownership, did not Congress amend the Community Reinvestment Act in 1995 to require commercial and mortgage banks to lend to high-risk borrowers? Banks that failed to comply were hit with fines and faced rejection when they requested mergers and branch expansions. Suddenly the subprime mortgage business boomed, and Countrywide Financial became its poster child.
As usual, Mr. Phillips’ Emmental logic, treats inequality of outcome as synonymous with inequality of opportunity. If Blacks and Hispanics in the United States owned proportionally fewer homes, it was not because they were less productive and less financially reliable than the Whites, but because of White racism. And if Black and Hispanics produced less and were less reliable financially, it is because of White racism too. Never mind that it was White presidents pushing to boost Black and Hispanic home ownership.
Bankers are undoubtedly guilty, but they are guilty of greed, which drives them to prey on anyone, irrespective of race, creed, age, gender, disability, or sexual orientation.
Mr. Phillips is worried about a disproportionate impact on ethnic minorities of the budget cuts being implemented by the coalition in its efforts to reduce the previous Labour government’s colossal deficit. What he means by “disproportionate”, however, is not “out of line with ethnic minority averages” but “out of line with the White average”.
In other words, because on average Whites perform better economically, Mr. Phillips is requesting preferential treatment for minorities—preferential treatment he knows he is likely to get, because of White anti-racism. After all, that is why he is here, earning a fat living at British taxpayers’ expense, doing absolutely nothing useful, and even advising think tanks without feeling the need for solid research.
Cuts? I say shut down the Equality Commission and have Mr. Phillips get a productive job in the real world.