Friday, May 30, 2014

San Antonio—HUD expressway

With Julian Castro’s nomination to the District of Columbia Vice Presidential Prep School (i.e., Department of Housing and Urban Development), the incompetent and/or disingenuous San Antonio mayor follows a well-trodden path, that first taken by former San Antonio mayor/failed Housing and Urban Development Secretary Henry Cisneros 20 years ago.

Cisneros led HUD’s charge in the Clinton administration for more affirmative action bank loans that spurred on the subprime mortgage bubble. Stanley Kurtz documents this in Radical-In-Chief: Barack Obama and the Untold Story of American Socialism:

When ACORN met with Housing Secretary Cisneros, it found a friend. The first of many meetings between ACORN and Cisneros lasted for two uninterrupted hours, instead of the one hour originally scheduled. Already, at that first meeting, Cisneros promised ACORN help with what were soon to become the Clinton administration’s signature changes in low-income lending policy—at Fannie and Freddie and elsewhere.

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By the mid-nineties, the Community Reinvestment Act applied only to about a quarter of the banking system. Yet [Assistant Secretary for Fair Housing Roberta] Achtenberg made key regulatory changes that had the effect of pressuring the other three-quarters of America’s mortgage industry into greater subprime lending. In particular, Achtenberg ruled that, regardless of any intention to discriminate, policies that ended up granting proportionally more loans to some groups than others would be considered discriminatory. So if blacks in some cities happened to have shakier credit histories than whites (a common phenomenon), banks would be punished even for applying exactly the same lending standards to both blacks and whites. Achtenberg’s new definition of discrimination helped push even institutions not covered by CRA into the business of shaky subprime lending. ACORN pressed Achtenberg hard on this and other issues, at times with help from Housing Secretary Cisneros.

Cisneros continued to do damage to the economy after he resigned from HUD over a cover-up of a Clintonesque sex scandal during his mayoral tenure. While cheating on his wife hurt his political career and his family, Cisneros’s true legacy is as a key socialist functionary and ennabler of the 2008 financial crisis. He led a $1 trillion initiative by Countrywide, then the country’s largest mortgage lender, to expand home ownership to minorities. Countrywide CEO Angelo Mozilo boasted at the time: “Henry (Cisneros) will put to use his long and respected experience as an advocate for affordable housing, who understands the benefits to communities of homeownership.” Three years later, Countrywide stock lost 80 percent of its value and it was bought out by Bank of America.

In the ’90s the banks had given in to a racial quota system advocated by community organizers like President Obama’s ACORN. Countrywide’s $1 trillion in loans was infamously securitized by the financial sector, socializing the pain of this doomed experiment in socialism. As Kurtz notes, the lowered lending standards were implicit. Not even the New York Times could ignore them:

As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.

This nonetheless surprised the Securities and Exchange Commission, who in 2009 charged Countrywide with securities fraud for failing to disclose its lax lending standards.

Achtenberg, meanwhile, by virtue of her lesbianism, currently serves on the Civil Rights Commission. This puts her in an ideal position to assist the incoming Castro in creating a new penumbra of rights for people who can’t control their sexual fetishes and impulses, something Castro thinks he knows a lot about. But he doesn’t. The only thing he’s wise about is his political fortune, so he’s skipping town before the repurcussions of his signature narcissist ordinance, as well as the city’s shoddy finances, come back to haunt him.

“From tens of millions of dollars spent on an unnecessary public safety headquarters to millions on streetcars and other special projects, the City Council has leveraged our future with spending that requires revenue now.” –Mike Helle, president of the San Antonio Police Officers Association

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