More on Racist Republicans Blaming Minorities for the Financial Crisis

Daniel Gross in Newsweek:

The thesis is laid out almost daily on The Wall Street Journal editorial page and in the National Review. Washington Post columnist Charles Krauthammer provides an excellent example, writing that "much of this crisis was brought upon us by the good intentions of good people." He continues: "For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac—which in turn pressured banks and other lenders—to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity." The subtext: if only Congress didn't force banks to lend money to poor minorities, the Dow would be well on its way to 36,000. Or, as Fox Business Channel's Neil Cavuto put it: "I don't remember a clarion call that said: Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster."

Let me get this straight. Investment banks and insurance companies run by centimillionaires blow up, and it's the fault of Jimmy Carter, Bill Clinton, and poor minorities?

These arguments are generally made by people who read the editorial page of The Wall Street Journal, and ignore the rest of the paper—economic know-nothings whose opinions are informed mostly by ideology and, occasionally, by prejudice. Let's be honest. Fannie and Freddie, which didn't make subprime loans but did buy subprime loans made by others, were part of the problem. Poor congressional oversight was part of the problem. Banks that sought to meet CRA requirements by indiscriminately doling out loans to minorities may have been part of the problem. But none of these issues is the cause of the problem. Not by a long shot. From the beginning, subprime has been a symptom, not a cause. And the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd.

He then sets forth the evidence of why it is absurd.

Blaming poor blacks and Hispanics for the financial crisis has a direct parallel to Jews being blamed for Weimar Germany's hyperinflation and the deprivations caused by draconian economic punishments enforced by the French and British under the Treaty of Versailles. Many Germans, even sophisticated ones, could not wrap their minds around the abstract explanations of economic phenomenon. The Right readily supplies the answer to such anxiety and confusion by blaming it all on the Other within society which must accordingly be controlled, suppressed, punished - along with their political allies. This serves to sharpen public anger and support for the Right as a purifying force - and distract the public from the fact that the leaders of the Right are largely the ones in fact to blame.  It is a watered-down version of the Big Lie, one that the GOP has been pushing since Reagan. Of course, many Republicans personally don't blame minorities for the economic problems the country is experiencing, but they are content to use such beliefs as a means to political power, which is morally worse.

(Via p6.)