A trillion here, a trillion there, pretty soon we`re talking about real money
Now that the long predicted dubious mortgage crash has finally arrived, I keep remembering that going back to the early 1990s, the government has been twisting the arms of private lenders to get them to lend more mortgage money
to minorities than the private firms believed was justified
by colorblind principles of creditworthiness.
This history seems to have disappeared down the memory hole because it`s all in the sacred cause of fighting discrimination, but I recall it distinctly from when I was daily reader of the Wall Street Journal
in the 1990s.
For example, there was a celebrated 1993 study by the Boston Fed showing that minorities` mortgage applications
were rejected at a higher rate. (Peter Brimelow pointed out in Forbes
that minorities did not have lower default rates, suggesting that lenders were behaving in a rationally colorblind manner, but that was not a popular view at the time.
Have the chickens finally come home to roost?
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