An equal opportunity recession?

March 16, 2009

Jim CarrJames H. Carr is chief operating officer for the National Community Reinvestment Coalition, a Washington-based association that promote access to basic banking services for America’s working families. He is a member of the Insight Center for Community Economic Development’s “Experts of Color Clearinghouse”. The views expressed are his own.

The U.S. economy is unraveling at a pace not seen in decades. The more than 650,000 jobs lost last month has contributed to a growing concern that the unemployment rate could rise to 10 percent or higher before the economy rebounds. At the center of the economy’s instability is a foreclosure crisis that has claimed 3.5 million homes in the last year alone, and threatens the loss of an additional 8 to 10 million homes to foreclosure over the next five years.

The loss of wealth associated with the collapse of the housing market is staggering. More than $5 trillion in housing equity has virtually evaporated since the foreclosure crisis began. Major stock indexes have also been cut in half, further contributing to decreased consumer confidence, substantially reduced spending, lower productivity, rising unemployment and additional foreclosures.

The magnitude of the economic decline has led many observers to conclude that the current crisis is an “equal opportunity financial nightmare.” But, reality paints a different picture.

While few have been able to escape the financial pain completely, African Americans, Latinos, Native Americans and many Asian sub‐populations are bearing the brunt of this national epidemic. Today, as the national unemployment rate rests at 8.1 percent, African Americans and Latinos are mired in double-digit job losses — the unemployment rate exceeds 13 percent for African Americans, is just under 11 percent for Latinos, and is a little over 7 percent for non-Hispanic whites. For young black males, the rate is 25 percent and climbing.

Before the current crisis, African Americans and Latinos held on average a mere $10 and $12 of net worth respectively for every $100 held by the typical non‐Hispanic white household. The disproportionate impact of the foreclosure crisis on African Americans and Latinos expands further the racial and ethnic wealth gap.

African Americans and Latinos were the disproportionate targets for the unfair, deceptive and reckless lending practices that triggered the foreclosure collapse and imploded the credit markets. The situation is so dire within the African‐American community that United for a Fair Economy, a Boston‐based policy group, estimates that African Americans could experience the greatest loss of wealth since Reconstruction.

To date, federal intervention has focused almost exclusively on propping up the credit markets. While ensuring the health of the credit system is essential, ignoring the plight of struggling homeowners has proven to be a costly and ineffective remedy. In total, the federal government has provided $9.7 trillion in investments and loans to ailing financial institutions. This amount is equivalent to almost 90 percent of all mortgage debt outstanding. Yet only 11 percent of outstanding home loans are delinquent or in foreclosure.

Meanwhile, the financial system remains in critical condition and may require several hundred billion dollars of additional life support. The Obama administration recently launched the most comprehensive program to date to stem foreclosures, but more borrower‐focused assistance is needed. The administration has also enacted a major economic recovery program to preserve or create 3 to 4 million jobs. Although impressive in scale and scope, that nearly $800 billion package of stimulus spending will not fully repair the severely damaged economy that has been inherited by the new administration.

There is growing consensus that a second round of stimulus will be needed. The administration and Congress should consider targeting spending in a manner that prioritizes communities that have the highest levels of unemployment, the greatest concentrations of foreclosures and historically under‐funded, inferior or poorly maintained infrastructure.

Channeling dollars to individuals and communities that need them most will immediately stimulate the economy and save and create jobs because families living on the margins of survival will pour those recovery dollars immediately back into the economy through spending on food, medicine, clothing, child care, energy, transportation and other necessities. Prioritizing areas hardest hit by the foreclosure crisis would more directly help stabilize the housing markets and steady falling home prices that continue to infect financial institutions.

Finally, investing in areas most in need of infrastructure improvements would provide fertile ground for shovel‐ready projects in communities long‐neglected. This prioritization of economic recovery spending would not only jump start the economy, it would aid the most financially vulnerable populations, stabilize communities, and reward all Americans by providing a more direct route to economic recovery.

Of course, there are those who will feel now is not the time to focus on wealth and income disparities and that further one‐time tax rebates to struggling middle-income families generally would be more equitable in the current crisis. But broad‐based stimulus checks will not have the same economic leverage effect as channeling those same dollars to the families and communities that need them the most.


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This sounds all good and PC. Who will pay for all this ivestment in the inner cities of America? I think the Chinese are tired of our spending. Taxing the rich, productive classes will only worsen our collective misery. Most rich people are not born rich. They are also working people and the engine that drives our economy.

Posted by Andy Ahuja | Report as abusive

Not everyone is blind to your game. Force lending to poor credits, then force bailouts for them. Deadbeat free ride.

Posted by kelly p | Report as abusive

It seems to me that it is less about the color of one’s skin, and more about one’s skill set and education. I have 10 years of experience in the IT world, and a Masters degree. I was laid off 3 weeks ago. I do see opportunities out there. Other educated people that I know are finding positions.

I have read that the unemployment rate for skilled, educated workers is much less than for those in industries not requiring college educations – all except for the financial industry.

Posted by Dave | Report as abusive

How can a government be so dumb or greedy for the inner city vote that they force banks to lend money to those who couldn’t afford them? Bailout Barney Frank protects Fannie Mae because to question Fannie Mae is racist and the government knows best. Now you want the middle class to send more money to the inner cities because it is “fair”. Let’s start with Chicago at the same place where a Chicago state senator built low income housing and did such a goood job the masses elected him president.

Posted by JH Griffin | Report as abusive

Mr. Carr,

I understand your rationale, but I can’t see how you could direct funds to the bottom level without causing injury to many in the middle level. I tend to think that social inequalities (that we DO have) can only be dealt with with more long term measures. The stimulus must first do no harm. Second it must be the most efficient solution to the defined scope of the problem. Scope creep in projects tends not to end well. That’s been my experience at least…

Posted by Winchester73 | Report as abusive

What is the culture and work ethic of those who are asking for more money? “If you give a man a fish you feed him for a day, if you teach him to fish he can feed himself”. We have got to find ways to teach people to take care of themselves. Four generations on welfare has bred a culture of inability and no work ethic. It is not about race anymore, its about the culture and desire to do for ones self. President Obama is half black and half white, what a great place to start to rise above this racial bickering and find a cause bigger than ourselves to succeed. Get a life!

Posted by Wm Hancock | Report as abusive

Funny how you Americans stick to your dogmas no matter what. The facts are the opposite. Most rich people are born rich, and most poor are born poor. Opportunities to change one’s economic status are greater in most European countries.
And who, exactly, are these “productive” rich people? The GM and Chrysler bosses begging for handouts from the taxpayers? The AIG bosses on billion dollar welware?

Posted by Ben S | Report as abusive

I think Mr. Carr makes a very good point. The $9.7 tillion bailout to the so called “productive class” totals 90 percent of all mortgages, not simply mortgages facing default. This is a ridiculous amount considering the fault of the crisis lays squarely at this capitalist “productive class.” The fact that working class and minority communities have to face an added burden (in addition to being victims of fraudulent mortgagees) while the people responsible for this catastrophe get handouts to maintain their inflated bonuses is a crime worthy of the most dysfunctional banana republic. John Kenneth Galbraith once said, “The only respectable form of socialism in the United States is corporate socialism.” Our present crisis reinforces this unfortunate truism.

Posted by Niki Bawa | Report as abusive

Nice PC Article. I’m in management in the professional services area and I specifically assess performance. So how come I have seen layoffs changed at the last minute to the benefit of African-Americans? These were clear specific cases of a weaker performing minority being taken off a list in favor of laying off a white employee. Do you think maybe the intimidation factor by the far left is at work and companies are afraid of lawsuits!?!?! I have seen it at the beginning of my career 15 years ago and again today. I guess the real truth is whites are actually being hurt more than other racial groups! Sorry article writer, people are getting tired of excuses. We are all equal and so should be held to similar standards on performance!

Posted by SFH | Report as abusive

We need a definition of terms when statements such as “channeling dollars to individuals and communities that need them most” are made. Like Dave, Andy A and the other posters said, ones status in life has to do with other things than the color of ones skin, or ones ethnic group. Family size and education level come to mind, also legality of citizenship status of family members.
The world economy that is crumbling is the result of ‘force feeding’ poor people things they don’t need via advertising, peer pressure and cheap credit. I don’t think many of the 650,000 jobs lost last month were in ‘historically underfunded areas’ with ‘poorly maintained infrastructure” I think a lot of these people lived in ‘overbuilt’ new housing areas, and had purchased a new home because they thought they would have a fairly good job for many years. These ‘overbuilt’ areas will get ‘rescued ‘, sooner or later, but there will not be any more ‘overbuilt’ new housing areas going up any time soon. Hummmm, where shall we build now?
I actually like the idea of large projects to improve infrastructure, a la ‘new deal’. There is just something about the way this is tied in with ‘race’ that does not ‘smell’ right to me. We are all Americans, we are all in this together. I thought President Obama said something about breaking the ties of the ‘Tribe’ and coming together as a people.
By the way, Native Americans are the only people in America with guaranteed cradle to grave health care, and free education from most institutions of higher learning, if they qualify for the program and put themselves through the rigors of the programs, and live like a poor student while they are going to school, like most students of all ethnic groups have done throughout history.

Posted by QueZen | Report as abusive

(Most rich people are not born rich. They are also working people)…Andy Ahuja

Most rich people in this and any other country, are either rich because they cheat and rob over or under the law, or because they inherited the wealth from their cheating and robbing parents/grandparents. A very ,very small percent of those have been real hard working people that deserve what they have/had. What you call hard work, is called cheating in my book…e.g.(car companies shoving lousy gas guzzling cars down our throats for 30+years telling us American cars are the best, banks telling us how much they care about our money , etc)Communism doesn’t work because of corruption and capitalism doesn’t work because of corruption, so what do you think the real solution is?

Posted by richard | Report as abusive

You get into a house you would never be able to afford, you take out a loan no one in their right mind should’ve underwritten, you default – and now you cry for bailout, and – who would’ve thought – there’s a likelihood you might just get it.
You play by the rules, you buy only what you can realistically afford, you save for your retirement and your kids’ education, you pay your debts and taxes on time, and now you (or your kids, or most likely both you and your kids and even your as of yet unborn grandkids) are asked to pay up so “thy neighbor” who should’ve never bought his house because it’s completely beyond his means would be spared from foreclosure. Meanwhile you still have to pay your mortgage in full – no loan modification for you because you always paid your due on time. As an added bonus, your retirement and college savings, already halved because of the financial crisis triggered in part by “thy neighbor’s” default, will be further reduced by inflation.
Isn’t that the kind of Social Justice some people are promoting? And would you still “love thy neighbor” after that?

Posted by Anonymous | Report as abusive

Make the CONGRESS and the PRESIDENT participate personally, and significantly in the losses and the rest of the fat cats will follow. Give them a free ride and we’ll have business as usual in Washington and on Wall Street – and more poverty.

Posted by spudbabs | Report as abusive

I see a lot of people not understanding (or not wanting to understand) the appaling numbers on this article.
Look at the big picture and see that if this trend continues, social inestability in our contry will arise within a decade.
Yes, we are going thru TEMPORARY hard times. But, I have seen the fruits of the recent stimulus package locally, with some peoples income actually quadrupling, and they are not african-american, nor hispanics,nor indian-american.
Stop saying there is no racism and inequality in america, and stop crying over your TEMPORARY spur of layoffs. White collar and well paid jobs will be back before you know it, but lower paid jobs will stay eliminated for a whole generation, because they are obsolete to the present overall economy.
A temporary period of hardship for some people cannot equate a lifetime of harship for millions of minorities in this country, it’s happen before and it’s happening again. By being proactive and creating a solution before the problem is out of control, you create wealth and well-being for all americans in the near future.

Posted by Athena | Report as abusive

What makes any of the posters cling to the quaint notion that this country is guided by the work ethic or even could be?

Maybe history classes teach it all wrong. We are told to admire the founding father’s notions of self-reliance but how many people do you know can claim hundreds of acres of wilderness where one can truly act on a work ethic? But maybe I show my age by even mentioning them.

The guiding principle behind the modern economy is not the work ethic but the investment and consumption ethic. Are memories so short and attention spans so truncated that few remember that almost the first words out of the former President’s mouth after 911 were to assure Americans that life must go on and to continue to shop and invest?

Machines can do the work. Even humans workers are more valued for their ability to deal with machines than they are if they only have manual or intellectual skills. Artisans for the most part starve and have precarious futures in any but the lush times. They need consumers with a lot to “invest”.

The work ethic is for fools and the self deluded. This is the brave new world of bread and circuses (for circus substitute cable TV and all the sex on demand you can find on the net). I tend to like the ebay “race to the bargains”. I can’t remember the last time I ever worked for someone else and found employment that really demanded much effort or even rewarded it when it had it.

The target of the bulk of the bailout money screams to all but the stone deaf that this is the country that believes money alone makes the world go round. Workers are a temporary inconvenience and the homegrown homeland insecurity model is too damn expensive to appeal to the investors anyway.

For real wage slaves you have to go east young men – go very far East.

Posted by Paul Rosa | Report as abusive

Work ethic? The problem is that we have a corruption ethic. We have a crime ethic (led from the top). We have a speculation ethic (make money with no productive work). We have a blindness epidemic. The very people who are the corrupt, criminal, speculative looters of our society are now being bailed out and nobody seems to notice. Instead the pirates dream….Privatize the profits, socialize the losses. A society cannot recover from this degree of lack of virtue. Most of the commentary on this article really shows the heartless, mercenary-minded, hypocrites that this nation has turned into. No bonuses for reckless speculators. Throw them in jail and throw away the key. Assist the innocent bystanders no matter what their ethnicity or neighborhood. Otherwise we get civil war.

Posted by Jonathan Cole | Report as abusive

Well said and AMEN, Johnathan!

Posted by Ray | Report as abusive

First of all, I feel that main problem here is the education and skills of minorities- or the lack of it. To think that a company would not lay-off someone that is a big asset to them and is consider highly skilled. Most jobs minorities take is jobs that requires minimal skills and education, therefore can be replaced/cluster easily. To change this inequality one most start in our education system. We need to educate minorities with the same level of their middle/upper class counterparts. Giving them free housing, food stamps, money will only prolong their poverty.

Posted by Yo | Report as abusive

Well now I have begin to doubt what you people write in this news. After looking at where all the money in AIG bailout got funneled,it is disconcerting to think if that bailout was ever needed. Are we all being fooled once again for the benefit of those well networked monsters at Wall Street. Why not set fire to it and end all the miseries for once and for all.

Posted by asterix117 | Report as abusive

I am an african american woman with 20 years experience and mba. I have been in interviews where I am asked in a degrading manner by a white guy did I get my degree online. I have to fight for work assignments that utilize my skills. Yet I put enormous pressure on my children to tackle math, science and tough assignments in school. It is difficult for an under-educated minority to compete in the job market of privileged better educated whites. Minorities are under educated because they are not given the challenging course work in public school. My children attend school in a nationally recognized public school district. What they are expected to do in 5th grade math is mind boggling. When I show it to my sister who’s children attend an under performing school district in the suburbs, she is concerned about their future. Yet you have republican governors who will not put needed financial resources in schools with a high minority attendance. Let’s face it. America wants-needs an underclass to do the work nobody wants to do. They need them to qualify for predatory lenders loans to buy homes that are in need of repair so the sellers have equity to purchase builders upgraded overpriced homes in newly designed neighborhoods…So you are white with an advanced degree and you were laid off and a minority with an associates degree was not. Your pain is the same. Could it be the employer wants diversity in the workplace?

Posted by Pearl | Report as abusive

When the crisis started last fall, the government should have simply stated that it would cover any of the loans that defaulted. Problem solved, since those “questionable loans” were at the center of the issues. But instead the big money barons got the funds. I blame Congress and all politicians in Washington.

But all this ignores the basic issues raised by this article. I think the whole sub-prime mortgage thing was done wrong from the very beginning. Efforts should have been made to get poor folk (of all colors and races) up to higher wage standards, by encouraging people to get educated and work hard. Thus they would have qualified for standard loans. Instead, Congress imposed rules on the lending companies that forced them to provide loans to people who could not afford them. It doesn’t take much to default on a loan you should not have qualified for in the first place.

This is part of a larger issue – people seem to believe they “earn” things like houses and other goods simply by being who they are; in reality all of us have to earn in order to deserve what we get.

My grandfather was a share cropper, without any education. My father worked his way through college and became a military officer. I worked three jobs during college, entered the military, and when I left the service I used the skills I gained to secure a good job in private industry. Over the years I have increased my salary due to my performance. I respect anyone who tries to better themselves, but I can’t stand people who just want “something” for doing “nothing” – because of who they “are”.

No amount of “infrastructure” is going to provide a basis for improving lives if people do not have the drive to improve themselves. True self worth comes by one’s own effort, and cannot be given.

Posted by John Green | Report as abusive

A little more intellectual honesty would have been nice in this article. The $9+ trillion dollars mentioned represents potential commitments. The total amount spent is actually $2.1 trillion, still an astonishing amount of money, but nowhere near the limit.

Of this $2.1 trillion, $1.2 trillion represents direct investments, with government taking an ownership stake. The federal government currently owns 79.6% of AIG. Presumably it can recover most of these investments over time as equity values return, even if it takes a decade, or through the orderly breakup of bankrupt companies.

$688 billion has been spent on overnight lending to banks, something the government has always done, as well as to other financial institutions. The terms of these short-term loans have been modified, but essentially this is a market that cycles frequently and has been around for many, many years.

$279 billion has been set aside to INSURE debt and to guarantee assets. This money has not actually been handed to anyone.

As far as helping disadvantaged communities goes, it all starts with education. Proper education for everyone should be a priority, and lifetime college tax credits should be made available so that ALL who qualify can get a degree or a recognized trade. Lengthening the school year and each school day should also be made priorities, with school breaks shorter and less frequent interruptions in class time (say, two three week breaks per year).

Throwing money at multi-generational problems has never helped anyone before, and will not help now or in the future, unless those we try to help have the basic skill sets that all employers seek.

Posted by Robert | Report as abusive

Until we stop using the words “black”, “white”, “Latino”, “ethnic minority”, “race”, et al… we will ALWAYS be inequal and preoccupied with the subject of racism. Get over it and treat every face you meet with politeness and respect. Teach your children the same.

I agree that yes, we need to revamp the education system as a whole. *Everyone* deserves a great education. Everyone deserves a fair chance, but without education, those chances will not come. Stop whining about it and DO something about it. Petition your city council, petition the senate, petition the house, petition the president. Don’t stop until you’ve achieved your goals. Respectful persistence will win every time.

Posted by CS | Report as abusive

This article is tragic! The responses are tragic too…

America is in a crisis that goes beyond financial and we are bickering over race?? This is something so far from the core of the issues that MUST be discussed by the people of this nation. Genetics will prove, can prove it now if you have the money that there is no ‘race’ in America, our country is the melting pot and you can call yourself Black, or Hispanic, or White but closer examination of genetics will yield surprises. We are all mixed race, back before recorded history.

One of the worst demises of ‘people of color’ is the fact that we/you identify with immigrants (for no reason other than ignorance and skin color). You allow the powers that be to flood our boarders and ports with people who have nothing in common with you, compared to your own people, and are surprised and disillusioned when low and mid-level paying jobs disappear to people who are poorer than you.

Politicians take advantage of you and the same immigrants by encouraging you to ‘be liberal’ and ‘colorblind’ when in fact your very livelihood and future is being stolen from you and your children. The politicians win by FLOODING our country with poor uneducated people because this means that they can ‘breed’ liberal supporters for their agenda as soon as the native born children of these people are voting age.

But you, because you are ‘liberal’ and wish for ‘peace and freedom’ for all support this…in the meantime uneducated and incompetent children of the poor minorities flood your public schools, unable to speak English they degrade the education that your children will receive further, to the point that an American public education in a poor neighborhood means NOTHING.

You can rail on this all you want, but the fact of the matter is that you are doing it to yourselves, with the support of the politicians because THEY are not getting poorer like you are, they are getting richer and more powerful. Keep deluding yourselves into thinking that you are being ‘open minded’ and you are going to find that you have nothing in the end, and neither will your children.

The reason that white people aren’t doing as badly is because in their hearts they are classicist, if not racist, and they are very interested in protecting what they can from the poor immigrants, who are not inherently bad people, but still bring bad things about (drug use, crime, lower property values, educational problems and lower wages). The majority of America is mixed race but white people are gradually getting the shaft from this ideology of ‘open minded liberalism’ too.

I should point out that I am not a Republican, I am for the people of the United States, they are all I care about, all of them, regardless of color or race. But caring for our people means that I really care for ‘our people’ before I care about others and it is not race dependant.

The very moral values that support people of color in our country are used to destroy you through political machinations.

Posted by Kiki | Report as abusive

I’m convinced that what we need are some advocates that are courageous enough to speak AGAINST THE POOR. Since the 60’s, I’ve watched social engineering activism destroy basic principals of human enterprise—that you are the sum of your choices. Exploiting empathies, the concept of the “noble sainted poor” has become the worshipping aniums of soft-skulled tender hearts who religiously vote to remove all consequence of poverty behaviors. BUT, it was catering to minorities and the poor which caused the credit crisis by forcing financial institutions into giving unworthy people easy loans (my brother-in-law works for Fannie Mae, he has monthly race demographic quotas…TRUE!). In my 50 years, I’ve yet to meet one chronically poor person that has a financial plan; or is committed enough in doing what it takes to improve their lives (they generally live in denial, falsely blaming the rich [without specifics] for their poverty). I am so sick of getting taxed into oblivion; while surrounded by the lazy parasite class that puts their energy into taking someone else’s industry, instead of sacrificing their own leisure time to improve their lot! Boo-hoo for the poor? NO MORE. With an activist media on their side, the low-income classes intimidate like thugs—angry at everybody that doesn’t willing hand over our earnings to them. America’s poor are so narcisistic, that THEY are the one’s who won’t do the jobs immigrants will do. Barney Frank now complains about “rewarding failure”…but isn’t that the whole premise of ALL Left wing politics? Yes. Minorities need to grow-up and get tough like the rest of us…subsidizing poverty behaviors is a limiting insult to people who need to learn drive and ambition instead of how to get their next free check. Want to really help the poor? Tell ’em that unless they are physically hobbled; the gravy train is over! Then maybe they’ll develop some responsible habits of adulthood.

Posted by Thogwummpy | Report as abusive

Wow! Ten dollars for every hundred dollars? I believe it, but still, that’s horrifying. Of course we should talk about race in times like these. If fact, we should be talking a lot more about race in my not so humble opinion. We should talk more about race all the time though, not just in times like these. Maybe if we talked more about race, this downturn wouldn’t affect racial minorities as disproportionately.

Posted by Josef Hoffman | Report as abusive

part of solving a problem is finding the cause , and rather than that antagonistic word blame we’ll use responsibility .

the global economic and environmental meltdown is caused by the fatally flawed excessive wasteful lifestyle needs of the American dream … end of argument .

though the world can be grateful for the post WW2 improvements in quality of life and the capitalist system has some great merits , the moral and ethical decay has led to a point of total collapse … unless a total shift in life values happens quickly it won’t be avoided … the $$$ chase into tax havens , re-organizing the money games is just a short term fix … when bail outs run dry , double recession will see a mind numbing global problem that will test the spirit of humanity.

printing more $$$ has already started till all the stashed cash can be found … but relying on consumer spending on temporary lifestyle wants to survive is madness as the planet overheats .

everyone is dodging the issues in self interest … the solutions are there internally trying to work .. solid foundations working with a dynamic humanity …. but this machine of inhumane numbers and Draconian blood sucking laws , needs a massive overhaul .

laws are easy to change … common consensus of needs and values … though all the litigation suits the law business , the waste of energy and time is taking us to gridlock … more regulation ?

try Karma … big business failed because of greed … mortgages because people wanted more than can afford … save the bail out money to build a whole new industrial infrastructure and fair playing field or that infamous year 2012 will be the end of our civilization as we know it .

the challenge !!! we’ve run out of chances … so get it right this time .

educate the world .. fair and ethical play , not win at all cost or secret get rich quick wishes .

the capitalist machine can work but media takes the most responsibility …. so here we are time to get rid of the mindless clutter , trash and waste .

ethical journalism ? 1000’s of media SUV’s chasing Paris around for an underskirt pic … we’ll all know who to thank when the crash comes .

Posted by Harry | Report as abusive

Those with few assets have financially lost little. I agree in terms of employment this is rough situation – although there is equity in the suffering. The psychological hurdle for me is learning not to save. Until recently it has been painful to take money out – I guess because or pride or an underlying sense of insecurity. The brain is too well trained to stash away the nuts. It is also hard to be at peace with unemployment – although it is the best situation to be in order to withdraw savings. Even unemployed my income threatens to be higher this year than the years before. I just never agreed to keep my savings tied up for decades earning 2 to 3 percent interest. That is not the deal.

Posted by Don | Report as abusive

But, so many of the Hispanics are ILLEGAL ALIENS and their children. Los Angeles County reports it spends one Billion dollars per year on the children of illegal aliens. If all illegal aliens left, the percentage of Hispanics adversely affected would drop notably.

Posted by John | Report as abusive

The author claims that by directing government largesse at the areas of greatest need, we will get more “bang for the buck”. What he doesn’t consider is that the areas of greatest need are also the areas of greatest irresponsibility. First the reckless financial institutions and now the reckless borrowers should get taxpayers’ dollars? Those taxpayers earned the money through hard work. Should they give their money to someone just because that someone needs it? In this economy, we all need it. I fear that the government is going to destroy the responsible middle class in order to redistribute wealth to the irresponsible. When hard work and savings are squeezed out, the economy will collapse. Completely.

Posted by Sam Rodgers | Report as abusive

Gosh, all of these highly educated folks sure know how to make the very simple seem very complicated. The losers of this country will ultimately prevail, undoubtedly. My only consolation is that they will then receive their just reward.

Posted by Kelly P | Report as abusive

Complain when they don’t give minorities loans, complain when they do. Why not just admit that it is your fault that you are poor an unemployed and stop blaming “The majority” that you already outnumber.

Import cheap labor, export productive jobs and make sure that ideology rather than reality governs your hiring, lending and funding practices and this is exactly what you must have wanted.

Posted by Haha | Report as abusive

Boy, am I tired of these color-highlighting articles. I don’t care who writes them, or how theoretically well-credentialed they are. These black/white pieces are so socially counter-productive today, so…20th century.

Posted by Ken | Report as abusive

One of the most blatanly racist statement is to blame the present crisis in the poor and the minorities, and to say that we should forget the poor and that all this talk is boring and so out of style.
Those opinions only further the cause of bigotry and injustice.
No, the present crisis is the result of the Madoff masterminds, the untouchable elite, the ones that cause damage in the billions.
Yes, there was financial irresponsability, yes, there are moral shortfalls, bad choices. But do not tell me minorities and black people invented the derivative market, sub-prime loans and wanted to put the Social Security fund under the hands of the stock market brokers (remember that?). The gap between the rich and the poor has widen and it is not exactly the poor’s fault.
By acknowledging the reality of the palpable inequities in our society we move closer to a more balanced and just society. OPEN YOUR EYES.

Posted by Bill N | Report as abusive

When the property bubble began to burst much of the blame was placed on sub-prime mortgages. These mortgages, offered to traditionally ‘higher risk’ borrowers, were in part driven by the community reinvestment act (CRA) as a counter to red-lining. If the CRA worked, it should have put mortgages into the hands of lower income communities, which correlates strongly with black and hispanic communities. Let’s assume it did… So what’s the surprise that these lower income communities are taking a hit with foreclosures? It was the non-market driven distortion of a government regulation, CRA, that forced, or at miminum encouraged, banks to make subprime mortgages available. Now these have blown up (that’s how markets work, you know, bad stuff blows up), it’s hardly a surprise that the biggest loss is where it is. But it’s very hard to see any inequity on the downside as a ‘current’ issue – it’s just the echo of the 1977 government distortion.

Posted by Anonymous Coward | Report as abusive

I would agree that “race” based rhetoric of this nature is very 20th century and it is certainly time to move on.
I welcome more immigrants from Africa to come to this country to set a good example
of upward mobility.

Posted by Bill Martin | Report as abusive

I hate to burst your bubble, Kiki, but it turns out that the greatest welfare queens of all are sitting in fancy executive suites. Or have you been missing the headlines lately? I do not necessarily agree with everything Mr. Carr says, but I admire him for how he has chosen to live his life. I can’t imagine what it would be like to be in his shoes and read all this sickening invective against people of color, immigrants and the poor. We have tried cash subsidies, education schemes and a raft of other policies. We have had both success and failure. But the truth is that the world will change and change utterly only when EVERYONE thinks like Mr. Carr, who no doubt could have just about any job, house, vacation and giant-screen TV he wanted and instead looks for ways to provide better opportunities for all of us.

Posted by B.C. | Report as abusive

The problem with sub-prime and fraudulent mortgage practices isn’t that minorities were unfairly targeted – everyone was targeted. It just happens that minorities were unable to figure out they need to understand fully what they are signing, have attorneys review everything they are signing and that if a $700,000 house with a $1,500 mortgage seems too good to be true, it is.

Yes, that was the vast majority of the problem – people wanting something for nothing now crying about not being able to keep it. I have seen this first hand where live and it was completely out of control.

One other note – the mortgage broker who so unfairly targeted minorities were you guessed it – minorities themselves. What a big surprise.

But let’s all forget about accountability and beg for another hand out because hard work, education and determination to get what you want is too darn hard. Just give it to me.

Posted by John | Report as abusive

“Channeling dollars to individuals and communities that need them most will immediately stimulate the economy and save and create jobs because families living on the margins of survival will pour those recovery dollars immediately back into the economy through spending on food, medicine, clothing, child care, energy, transportation and other necessities.”
Sorry, it ain’t so. And if anyone expects me to suggest that the money would be wasted on booze and drugs – I’m not going to. I would even suggest that the money given directly to the poor would be spent firstly to get current on the newly modified mortgages. Let’s say that’s where 50% of the money would go (I don’t pretend for this number being anywhere close to correct – just the first number that came to mind). How about the other 50% left after the loans are dealt with?
Definitely there’ll be not much difference seen in local grocery stores. People don’t really change their eating habits overnight just because of money being or not being available. They still are eating even while getting more and more behind on their loans. If, by a miracle or Uncle Sam’s helping hand, the loans get paid off/modified/rescinded, they would still eat, and a person can eat only that much. Maybe it would mean more expensive cuts of meat, or some tasty treats that are not a necessity but oh-so-craved for, but that’s not much of a change. Besides, with more money in the pocket people would eat out more and shop for groceries less. I don’t see much of economic growth potential here.
They’d drive more, and count miles and gallons less. But are oil companies and Arab sheiks the intended recipients of bailout funds?
Local fast food joints and discounters will surely see more sales. They might even hire more. But burger flipper or Walmart greeter is not the type of positions both Mr. Carr and the government want to be created. And the goods sold at the likes of Walmart are mostly imported from China. How many examples of apparel, or electronics, or toys, or whatever, proudly displaying “Made in USA” label have you seen there lately? So don’t expect American manufacturers to get the benefit from higher Walmart sales. Are Chinese Communists the intended recipients of bailout funds?
The most economic impact would be seen if the bailout money were channeled to the middle class instead, without regard to color, ethnic origin, gender, whatever. Middle class is much more likely than the poor to buy goods and, especially, services based domestically. Middle class, if only because of generally higher education comparing to the poor, is much more responsible in their economic decisions.
And playing the racial card is irresponsible, especially in the times as difficult as it is now. If there’s one thing President Obama needs the least, it’s racial tensions, let alone riots like LA’92.

Posted by Anonymous | Report as abusive

One issue that strikes me is that “the Poor” is being consider as an underclass by the majority of the responses to this article, like a whole different type of Americans, with no goals or aspirations.
There was a time when the American Society had upward mobility, when the Middle Class of today was the Upper Middle Class of tomorrow.
All the talk of self-defeatism is frankly, Un-American and Un-Patriotic. This temporary recession has uncovered all the racism and mediocrity that is harbored in the hearts and minds of so many.
So what if -as stated by some Anonymous- poor people spend their money on Fast Food and Discount Chains? There are people working on this places, and these businesses pay the lease, pay the truckers who bring the goods from wherever, pay the electric bill, pay the janitor. That is contributing to the overall ecomony, albeit not exactly what some people wish it was.
If you want the money to really impact the economy, ask to know where the billions of dollars that have evaporated from the ecomony have gone, starting with one certain Enron collapse. Did that improve the lives of anyone? Are you mad and raging with these people as much as you are against “The Poor”, to whom you blame all 21st century american calamites?
Maybe we cannot change the eating and shopping habits of millions of people, but we can contribute by making their lifes a little better, so they can become the Middle Class of tomorrow, because they are Americans too, as deserving and potentially valuable.

Posted by MJ | Report as abusive

Those who think that the disadvantage of race is a twentieth century phenomenon should look at the 16th century, when Americans decided that Africans should be enslaved rather than treated as equals. The law of slavery is gone but the social consequences have never been eliminated, like they were for once oppressed immigrant groups like the Irish and Chinese. We have poverty, unemployment, failing schools and their consequence, high prison populations as a result.
And as one person pointed out, the poor and minorities did not invent bad mortgages and complex derivatives that have brought down the financial system and with it businesses, consumption and employment. Neither did the Community Reinvestment Act or Fannie Mae. Blaming the victims is bad policy. Rather the “welfare queens” of today are getting million dollar bonuses from AIG and similar bailout recipients. If anything the finance industry took advantage of the decline of local lenders and replacement with global financial institutions unconnected to local communities, inflation in home values, and stagnant wages and decline of the social safety net, so that the consumer economy needed to be maintained by borrowing. All this was enabled by a regulatory system that was dysfunctional at the private, state and federal level.
The first thing to do is fix bad mortgages so they are fixed, affordable and related to the real value of the property. Take over insolvent banks, recapitalize them into smaller, more broadly owned banks that can be privatized. We also need to give more of the fruits of labor to working people and less to owners to spread the wealth in the tradition of Henry Ford rather than concentrating it in the tradition of George Bush. And we need to reregulate the entire financial sector to prevent these and similar abuses from reoccurring, and fund the regulators so they can do their jobs. Ultimately we need to invest more in our communities, keep local factories up with technologies, and prevent abuses around the world from undermining us at home.
As for minorities, we need to invest heavily in improving their school systems, not just with money but with know how and experience. And there need to be jobs paying good wages at the end of the tunnel.

Posted by Stan Hirtle | Report as abusive

“That is contributing to the overall ecomony (sic! – A.), albeit not exactly what some people wish it was.”

Posted by MJ

If you believe the goal of the bailout should be creation of more McJobs and support of Chinese manufacturing – that’s your right, the 1st Amendment is still on the books. However it’s my right to disagree with it under the same 1st Amendment.
Back then, when McDonnell Douglas was still in existence, it was said that McDonalds job is not an equivalent replacement of a McDonnell Douglas job. Still holds true. Stimulating creation of McJobs at the expense of more skilled, better paid jobs (the bailout, no matter how big, is still finite resource) will result only in Middle Class of today becoming the Poor of tomorrow.
Like it or not, American manufacturing has shrunk. The most notable manufacturers still surviving are auto and aircraft makers. The poor don’t buy new cars, and not supposed to. If they do, then whoever underwrote their auto loan is either brainless or a crook, and the whole thing most likely will result in repo. Is that the kind of economical activity you’d want to see growing?
Aircraft orders more or less correlate with the intensity of air travel. The poor simply can’t afford flyaway vacations – even middle class hardly can in today’s economy. If the poor still buy flyaway vacation – then whoever underwrote their credit card is either brainless or a crook, and the whole thing most likely will result in either default or enslavement of the card holder by sky high interest payments for years to come. Is that the kind of economical activity you’d want to see growing?
If we want to revive domestic economy, we must first and foremost empower the consumers of domestic goods and services, and that is the middle class. It is the middle class (and above) that buys cars and houses. It’s the middle class that uses financial, travel, telecom, whatever services. And that’s the industries that create decent jobs, including the ones that don’t require high education and skill level. And who benefits from these low skill jobs? Exactly the poor, and that’s their chance on upward mobility, the lack of which you lament. You can disparage the trickle down approach all you want, but that’s how it works.

Posted by Anonymous | Report as abusive

They weren’t all “taken advantage” of – a large majority lied about their income and more to cash in on the GREED in the housing market. The GREED was color blind – EVERYONE jumped on. Now you want to make it a race issue – another sad, easy and cop-out commentary when things go wrong, it must be racial.

Posted by John | Report as abusive

In the name of recession and global slowdown, many companies engaged in job cuts. Instead, companies should request its employees to work with lesser pay and retain their jobs, until the economic recovery. Many people agree with this idea and even trade unions agree with it. I think, this experiment will largely succeed and the employee feel loyalty to the organisation.On the other hand, company can retain better skilled staff instead of finding new staff and train them with new environment. Pay cuts is necessary at top executive level. Job insecurity is hunting Americans minds and their respective govt. and corporations find a better solution like retaining their employees through pay cuts if they are willing to work. It is a cyclic reaction in the economy. If the employees survive, then only corporate will survive,govt. will survive.

Half hungry is sometime good for innovate new things. If they are full hungry and feel full insecurity, then there is no room for innovation and creativity. It will definitely create chaos, violence and criminal action. Is the corporate world and American and EU nations listening to me?!

Posted by commonman | Report as abusive