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The New "Welfare Queens"

Throughout this long presidential campaign, there's been endless discussion of race as a factor. But until recently, such talk revolved around hard-to-assess white fears about Barack Obama's racial identity, along with efforts to conjure up the ancient hobgoblin of the Scary Black Man via images of Obama's former pastor, Jeremiah Wright.

Now, in the wake of the ongoing financial crisis, racism has entered the campaign conversation from an unexpected direction. In the fever swamps of conservatism, there's a growing drumbeat of claims that the entire housing mess, and its financial consequences, are the result of "socialist" schemes to give mortgages to shiftless black people whose irresponsibility is now being paid for by good, decent, white folks.

Some of this talk is in thinly-veiled code, via endless discussions on conservative web sites (though it spilled over into Congress during the bailout debate) attributing the subprime mortgage meltdown to the effects of the Community Reinvestment Act of 1977, which was aimed at fighting the common practice of mortgage "redlining" in low-income and/or minority areas (basically, a refusal to make any mortgages, regardless of the creditworthiness of individual applicants, in such areas).

In truth, the CRA didn't require lending to unqualified applicants (though it did provide that applicants' credit-worthiness could be established through means more sophisticated that standard credit scores), and in any event, CRA doesn't even apply to the non-bank lenders responsible for the vast majority of bad mortgages. (Sara Robinson has a very useful primer on CRA at the OurFuture blog).

A closely associated and even more racially tinged element of the conservative narrative on the financial crisis focuses on lurid claims about the vast influence of ACORN, a national non-profit group active in advocacy work for low-income Americans. Among its many activities, ACORN has promoted low-income and minority homeownership, mainly through personal counseling. More to the point, though it's unrelated to any of the claims about ACORN's alleged role in the financial crisis, the group worked with Barack Obama back in his community organizing days on the South Side of Chicago.

Now as it happens, I've never been a huge fan of ACORN, mainly because its ham-handed voter registration efforts in recent years have supplied Republicans with their only shred of evidence that "voter fraud" is a legitimate concern in this country. But ACORN, a relatively marginal group, had no real influence over toxic mortgage practices, which again, to state the crucial point, had little to do with CRA-enabled loans to low-income and minority homeowners. Google "ACORN financial crisis" and you'll be treated to an amazingly huge number of articles and blog posts on the subject, virtually all of them from conservatives. None of them, so far as I can tell, establish that the group has had any significant involvement in mortgage decisions, mainly because most subprime loans were made in areas where ACORN activists would never set foot. ACORN is being singled out by conservatives for a leading role in the crisis simply because it's crucial to the whole CRA/Socialist/Minorities/Fannie Mae/Freddie Mac/Obama narrative about the financial crisis. And that narrative is not simply all over the internet: it's common on the airwaves as well, from Lou Dobbs to an assortment of "analysts" at Fox.

While some conservatives are careful not to get too explicit about the racial underpinnings of this argument, others aren't. As usual, we can rely on Ann Coulter to expose the raw id of conservative sentiment, as in a post on the financial crisis with the title: "They Gave Your Mortgage To a Less Qualified Minority," which deliberately played off the theme of a famous Jesse Helms campaign ad demonizing affirmative action.

Here's Coulter's take on the alleged impact of CRA:

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee."

Nice. The coda of Coulter's "argument" plows some very familar furrows:

Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients.

Political correctness had already ruined education, sports, science and entertainment. But it took a Democratic president with a Democratic congress for political correctness to wreck the financial industry.

There you have it: once again, rich liberals in league with shiftless minority "welfare recipients" are sticking it to Joe Sixpack.

Coulter's uninhibited take seems to be closer to what we are now seeing and hearing among grassroots conservatives, whose anger is now visibly spilling onto the campaign trail, than the more circumspect "analysis" of her more "responsible" colleagues.

It shouldn't be that surprising. Let's say you are a classic Main Street conservative, a white middle-class man near or past retirement age. You own your home, you pay your bills. Maybe at some point you benefitted from a government-subsidized or underwritten home loan. Maybe you were lucky enough to do your own modest real estate speculation in the mid-80s or mid-90s or early 00's, when it all worked. Maybe you even have a defined-benefit pension that insulates you from the immediate effects of the stock market collapse. But still, you've played by the rules, and are entirely innocent. And now the whole economy is collapsing around you, and worse yet, many hundreds of billions of your taxpayer dollars are being tossed around Washington to "bail out" everybody but you. Two kinds of explanations are being offered to you for what went wrong. One involves an impenetrable haze of financial jargon about the securitization of mortgages and derivative instruments and hedge funds, which only a handful of people in the country can even pretend to understand. The other is Ann Coulter's. What are you going to believe?

Perhaps it's an ironic sign of social progress that today's emerging racist stereotypes involve minorities getting behind on their mortgage payments, rather than "welfare queens" using change from their food stamps to buy vodka (the famous Ronald Reagan anecdote) or black men impregnating their girlfriends to live off those bountiful welfare payments. But it's still disgusting. As Rick Perlstein has righteously argued, it's a blood libel on people who exert no real power in this country.

As the foregoing meditation indicates, I'm less inclined to blame those fist-shaking angry Main Street conservatives at McCain's rallies than the conservative "thinkers" who promote racist stereotypes as part of a broader effort to deflect responsibility anywhere, everywhere, than towards the corruption and ideological manias of their own leaders.

UPDATE: Perhaps folks are too freaked out today about "Black Friday" in the stock market to give much thought to a post about racism towards black people. But it does occur to me that I didn't quite close the loop on one element of my argument about what's going on with grassroots conservatives. When people at a McCain rally in Wisconsin started chanting "ACORN! ACORN!" earlier this week, most observers thought they were just upset about allegations of voter registration fraud (for a discussion of that subject, see Adam Serwer). I've convinced something much deeper was going on.

Grassroots conservatives have been fed a steady, toxic diet in recent weeks, on talk radio, on Fox, and in the blogs, of a narrative that suggests "Obama's ACORN" (with the complicity of Fannie Mae/Freddie Mac) created the financial crisis, is benefitting massively from the bailout, and is now trying to steal the election. This is a race-based Unified Field Theory that connects everything these folks fear and hate, and they want John McCain to talk about it, instead of all this bushwa about greedy lobbyists and bipartisanship.

On a broader front, this may represent the ultimate climax in the original and central dilemma of the McCain campaign: how to stay "bipartisan" and mavericky while channeling the passions of the conservative base. The whole contrived balancing act could well be blowing up, at McCain's own rallies.

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I was stunned to hear upon waking this morning an interview by a reporter for Nashville's public radio station with Lamar Alexander on the long-term consequences of this financial crisis, in which he said that Congress would soon have to take a look at the role of the Community Reinvestment Act in creating this situation! Clearly the views of the vicious racist fringe are now being taken up by the "respectable" Republicans--if, indeed, one can actually use "respectable" and "Republican in the same sentence any more.

The basic premise of this article is flawed. While it is true that President Clinton's changes to the regulations under which the CRA was administered did provide certain safeguards for the banks, i.e., the bank did not have to accept a specific non-credit worthy borrower, the pass/fail test under the CRA was administered was based on results only. Thus if a bank were to have 1000 applicants from a particular area -- the vast majority of which were non-credit worthy -- the bank would fail the overall CRA test if they turned down these applicants. In essense, the banks were damned if they do and damned if they don't. In addition, it is disappointing to see a reputable publication like this charge "racism" on such a flimsy pretense. To take such action is long-term detrimental as more-and-more, it makes the serious cases of racism look like just another attempt to cry wolf.

This article is flawed, and not just in terms of the financial details of the strong arm tactics employed under CRA. If I protest ACORN, which I do, based on policy, behavior, law, fairness, I am nonetheless deemed to be "racializing" the debate? This is nonsense, of the highest order. Some of ACORN's behavior and tactics, bordering on illegal and certainly entering into shameless, should be decried by people of reasonable standards in politics and law. It's a typical tactic of the left to suggest that simply because I protest the actions of a group that is run by black people, that therefor I am racist. That's just silly....

And please, "stealing the election" is such a tired term. Is it yours, by decree? If you think that the political process in this country doesn't have its hands dirty, on both sides of the aisle, you are kidding yourself, in a simple, partisan way.....

This is a brilliant post.

But regarding whether people are going to believe Ann Coulter or some complicated argument, luckily there's a simple argument that doesn't rest on using acronyms. It goes something like this: this is the final verdict on eight years (or 28, with the briefest, halfhearted break during Clinton) of failed economic policies. This is the argument Barack's making, and he's doing a pretty decent job of it based on how his numbers look.

Dan Ancona::: You logic seems a little weak. Your statement is not an argument -- it is a belief. Your belief may be right or wrong but there is certainly no logic to it. Your "argument" is similar to someone saying "Look at all the great wonders of the earth -- this is proof that God created it". God may or may not have created the earth but the statement contains no proof.

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