The Minority Mortgage Meltdown: How The Community Reinvestment Act Fits In

By Steve Sailer

The mortgage fiasco devastating America’s big banks has many causes, but perhaps the least understood is the complex impact of the 1977 Community Reinvestment Act (CRA). There has been some hoopla over the CRA in recent months, but nobody seems to have noticed the subtle way the CRA actually exacerbated the disaster.

I’ll demonstrate using the meteoric rise and fall of Washington Mutual, Inc. (WaMu). Under CEO Kerry Killinger’s direction, WaMu went from being an obscure Seattle outfit to the sixth biggest bank in America.

So WaMu wasn’t quite the biggest bank—but it may well have been the silliest. When a mariachi singer in California claimed a six-figure income on his mortgage application, for example, WaMu accepted a picture of him in his mariachi outfit as the sole documentation of his income.

The bank’s slogan was “The Power of Yes”. You know, as in “Yes, We Can”.

Then, during last year’s 1930s-style bank run, the government seized WaMu last September 25 and sold its remnants to JP Morgan Chase for less than $2 billion. The Federal Reserve later outright gave $25 billion to the purchaser, in part for taking this stinker off the government’s hands.

Back in the summer of 2008, I pointed out that affirmative action likely had something to do with the horrific default rates on subprime mortgages. That became a modestly popular argument during the recent election campaign. Republicans would attempt to counter Democrats’ claim that the mortgage meltdown was caused by "greed" by pointing toward the Community Reinvestment Act.

After being strengthened under the elder Bush (n.b.!) and Clinton Administrations, the CRB was exploited by "community organizers", like President Barack Obama’s old ally ACORN, to shake down banks wanting government permission to buy others banks. In return for not protesting the merger, the racial activists would demand promises of more loans to minorities with doubtful credit.

The National Community Reinvestment Coalition boasted about the early 1990s change in the CRA from toothless to lucrative:

this old Washington Mutual press release on Eric Falkenstein’s Falkenblog dating back to WaMu’s $5.2 billion purchase of New York City’s Dime Bank:

“SEATTLE, Dec 21, 2001 … In connection with its merger with Dime [Bank], Washington Mutual recently established a ten-year, $375 billion community commitment which targets funding to low- and moderate-income borrowers, and minority borrowers … One of the largest community commitments of its kind, the ten-year pledge will be implemented with the assistance and support of a variety of non-profit community partners.”

On WaMu’s still-existent website, the bank explains that $375 billion pledge:

“These funds will provide loans and other financial support to communities consisting predominantly of people of color, to residents of low- to moderate-income (LMI) census tracts, and to people whose income is below 80 percent of median income. We will strive to create products and programs that increase our market share in low income and diverse communities, with a long-term goal of making our market share in these communities more closely mirror our market share overall. Using our Year 2000 production as a baseline, we have set our goal to double the number of loans made to borrowers of color by the end of the first year of this commitment. Thereafter, we will increase the number of loans made in these communities as quickly as possible.”

Not surprisingly, WaMu won the 2003 CRA Community Impact Award.

We now know that subprime foreclosures are centered among exactly the kind of people targeted in WaMu’s CRA agreement with racial activists. During the Housing Bubble of 2004-2007, minorities accounted for twice as many subprime dollars borrowed per capita than did whites. And the new report by the Boston Fed shows that, at least in Massachusetts, minorities defaulted on subprime loans at twice the white rate. All this suggests that minorities accounted for approaching two-thirds of subprime mortgage dollars lost.

For the GOP, the Community Reinvestment Act (CRA) was a more convenient example of government interference in the mortgage markets than, say, George W. Bush’s 2002-2004 holy war on down payments in his effort to boost minority home ownership. That’s because the CRA was passed by a Democratic Congress and signed by a Democratic President.

Of course, the GOP’s claims about the CRA’s centrality in the mortgage meltdown were obviously partisan. And more skepticism about the importance of the CRA seemed plausible, along these lines:

"How could the government hold a gun to the financial institutions’ heads and force them to make hundreds of billions in stupid loans? Sure, giving out $375 million in stupid loans to get the government off your back, that would make sense. $3.75 billion, maybe. $37.5 billion, conceivably. But $375 billion, no way. Nobody would promise to give away $375 billion to dubious borrowers unless they thought it was a great idea. They’d leave the industry before they’d promise to hand out $375 billion to people whom they doubted would pay it back.”

In general, the government and its associated racket-runners can extort mid-level amounts of affirmative action booty. But when the demands get too great, businesses exit in one way or another. (Often with bad effects on general welfare, of course).

Obviously, it’s a massive exaggeration to say the government and the ACORN clones forced WaMu to lend to likely deadbeats. Nobody promises to loan out $375 billion to low and moderate income and minority borrowers unless they actually want to lend out to low and moderate income and minority borrowers something approaching $375 billion.

Moreover, Washington Mutual sure didn’t act reluctant. They were positively exuberant about pouring money into the hands of minorities with weak histories of paying off debts. The relatively small number of big financial institutions that did a major fraction of subprime lending really seem to have drunk the same Kool-Aid as ACORN, Congress, Clinton, and Bush. They actually thought they were going to get rich off no-money-down, $400,000 loans to high school dropouts.

And they did, for a few years. CEO Killinger “earned” $88 million from 2001-2007.

WaMu’s strategy was lending to deadbeats—the more minority the better. For years, WaMu ran a series of TV commercials where one cool black guy in a blue WaMu shirt, an actor who looked like a cross between Barack Obama and Don Cheadle, would humiliate dozens of old white bankers in suits.

Most advertisers would have put one token minority banker in the crowd of pompous empty suits. But WaMu didn’t bother. They wanted to get their message across.

So it would seem that WaMu didn’t need the CRA to blows billions.

And yet … there’s a more subtle point that I, and seemingly everybody else, missed in thinking about the impact of the CRA’s veto over bank acquisitions: the selection effect on who gets to get big.

Before I explain that, let’s back up and think about the big bank-bad bank paradox more generally.

We naturally assume that big banks are safer storehouses for our money than flimsy little banks. It’s the basic probability theory of “gambler’s ruin”—the more money an institution has, the less likely the chance of running out of money. That’s why a casino would still win even if it gave gamblers a fair shake (e.g., no zeros on the roulette wheel): the gamblers would be more likely to run out of money before the casino did.

For this reason, banks have traditionally employed the wiles of architects to make them look as reassuringly massive as possible. When I moved to Chicago in 1982, for instance, I always enjoyed visiting my cousin at work because I had to pass through perhaps the most imposing interior space in the city: the stupendous second floor lobby of the Continental Illinois bank building on La Salle, next to the Board of Trade.

And yet, big banks aren’t always as trustworthy as they might look. An aggressive strategy had made Continental Illinois the largest commercial and industrial lender in America—until it went broke in May 1984, requiring the biggest FDIC bailout of depositors in American history…up to that point, of course.

Today, the old Continental Illinois building at 231 S. La Salle St. is owned by Bank of America, one of the new four Red Ink Supergiants of American banking along with Citigroup, JP Morgan Chase, and Wells Fargo. Nonetheless, B of A—and perhaps some of its colossal colleagues—may follow Continental Illinois into nonexistence if the federal government ever tires of bailouts. The problem, of course, is countless (at present, literally)bad mortgages made during the late Housing Bubble.

Why do big banks tend to be bad banks?

First, one obvious reason is the “too big to fail” theory that the feds applied to Continental Illinois. The government bailed out bondholders and kept the shell of Continental Illinois limping along for a decade until Bank of America bought it. So, managements and creditors assume there is safety in size, even though the law of diminishing marginal returns says the opposite: the more loans you make, the more likely you’ll make bad ones because you’ll be less selective.

Second, there’s a natural tendency during economic good times for the most recklessly optimistic managements to grow fastest. They borrow the most money and buy the most competitors. (At least until the bad times roll around again, when the skeptics can pick up the wreckage for a song.)

In many industries, however, skill puts a restraint on growth through confidence and luck. For example, Ford Motor Co. became the biggest car company in the world in the first quarter of the 20th Century not because Henry Ford was the biggest risk-taker, but because he was the best car-maker (e.g., he invented the moving assembly line). Similarly, Intel is the top chip maker largely because it’s good at making CPU chips.

In finance, in contrast, sheer boldness appears to play a relatively larger role.

Third, the high CEO compensation of recent decades has encouraged a get-rich-quick attitude.

Say a 45-year-old gets appointed CEO of a small bank, with a salary of $1 million per year. He could carefully steward his stockholders’ investments, and continue to make roughly $1 million per year until he enters a comfortable but not lavish retirement in 20 years.

Or, he could try to grow the bank fast via risky bets. If he could increase the size radically, he would show the Board that CEOs of banks that big usually get paid $10 million per year. Even if the bank blows up two years later, he’d still have earned $20 million in those two years, as much as he’d earn in 20 years of prudent management of his bank at its current size.

So why not gamble? What’s the worst that could happen to his net worth?

Finally, the executives of big banks are, by necessity, farther removed from what’s happening on the street. In 2006, WaMu moved into the 42-story WaMu Center skyscraper in downtown Seattle—a long way from Southern California, where Killinger’s minions were making so many fraudulent loans.

Knowing all the biases favoring risky business, you might expect the government to prudently lean against the tendency of ambitious mortgage lenders to hand out too much money to bad credit risks. Yet, in the name of increasing minority and low-income home ownership, the government did exactly the opposite: since the early 1990s, it has relentlessly pushed for more risky mortgage lending—with the catastrophic results we see all around us.

How did the Community Reinvestment Act worsen imprudent lending to minorities?

It’s not a popular question even to ask. “I want to give you my verdict on CRA: NOT guilty”, said FDIC Chairman Sheila Bair:

“And ‘Let me ask you. Where in the CRA does it say to make loans to people who can’t afford to repay? Nowhere.’ The facts are simple, Bair said. The lending practices that are causing problems today were driven by a desire for more market share and revenue growth, not because the government encouraged certain lending practices.” (FDIC’s Bair Sets to Shatter CRA “Myth”, by Kelly Curran, HousingWire.com, December 5, 2008.)

Okay–but how does a bank get more market share and revenue growth?

One major way: by buying other banks. And to do that, you have to pass through the CRA gauntlet. If you aren’t willing to lend to people the government wanted you to lend to, then you were out of luck at mergers and acquisitions game.

So, the CRA implicitly selected for Kool-Aid Drinkers, such as WaMu’s Killinger. They’re the ones whom the government allows to build empires. (Unfortunately, their houses turned out to be built on sand.)

I missed understanding the impact of the CRA because I kept asking myself: “How could the CRA force a banker who thinks lending more to minorities is a bad idea to lend more to minorities?” I kept trying to imagine the CRA’s effect on the already crazy-stupid WaMu, and how that couldn’t have been all that significant.

But I should have been thinking about the other side of the coin: all the sane-smart banks that didn’t get to get big like WaMu did because the government rigged the acquisition process so that crazy-stupid banks were more likely to get merger approval. WaMu got permission from the government to make 29 acquisitions from 1990 onward. A smart-sane bank wouldn’t.

That WaMu sincerely believed that it was going to make a fortune handing big mortgages to mariachi singers, illegal immigrants, and Department of Motor Vehicle clerks etc. etc. seems clear. After all, WaMu not only originated about one out of every eight mortgages in the U.S., but it also held on to a fair number of them instead of securitizing them and dumping them on Wall Street.

WaMu explained its minority-oriented strategy over and over again. Robert O’Connor wrote in Mortgage Banking, October 2003:

“Craig Davis, president of Washington Mutual’s Home Loans & Insurance Services Group, says that the high rate of homeownership in the United States–currently about 68 percent–can mask very low rates among immigrants and minorities. He argues that encouraging ownership among these groups is both good for Washington Mutual and good for the country. ‘Affordable housing and lending is front and center in terms of our strategy,’ Davis says.

“… Porter says that Washington Mutual takes the CRA very seriously. But he adds the bank regards the CRA as a floor rather than a ceiling. He says the company, and its employees, want to surpass the regulatory standard for institutions to meet the credit needs of their communities. Porter points out, for instance, that the bank’s $375-billion, 10-year lending commitment was not necessarily dictated by the CRA. ‘It was good from the company’s perspective,’ he says. ‘It was good from the community perspective, and it actually gives us a higher bar that we want to achieve.’ …

“Despite the strength of its portfolio operation, Washington Mutual is also committed to the secondary market. Early this year, it entered into a five-year strategic alliance with Fannie Mae Fannie Mae: to encourage home-buying among a number of groups, including immigrants, minorities, first-time buyers first-time buyer  first-time buyer and people with low and moderate incomes. The goal is to generate $85 billion in mortgage lending.”

And here’s a 2003 WaMu press release that sounds like Dave Barry wrote it:

“Helping to build strong, vibrant communities wherever Washington Mutual does business is integral to the company’s long-term strategy. The Community and External Affairs Division oversees all community investment and development activities to ensure that Washington Mutual fulfills its community goals in the most strategic way possible.”

Why was WaMu, with its derisible strategy, able to buy out so many big lenders? To understand it, think about it the other way around: why didn’t more prudent financial institutions outbid WaMu for acquisitions?

Say there are two banks, WaMu and Scrooge-Potter BanCorp. The latter is owned by Ebenezer Scrooge of Charles Dickens’ A Christmas Carol and Mister Potter of Frank Capra’s It’s a Wonderful Life. While WaMu is beloved for lending to anybody with a pulse, Scrooge-Potter BanCorp is widely loathed for taking a dim view of lending money to likely deadbeats.

They both would like to buy George Bailey’s Bailey Building and Loan Association. ACORN and the National Community Reinvestment Coalition announce they will protest vociferously against regulatory approval of the merger unless the winner pledges to make $50 billion in minority and low income loans.

Reprations in the form of loans you don’t have to pay back?

Fearing a debacle of defaults, Scrooge-Potter BanCorp issues a two-word press release: “Bah, humbug”. And it drops out of the bidding.

WaMu announces: “Well, heck, we’ll promise to lend $55 billion.”

In fact, because Scrooge-Potter realized its quest was hopeless, WaMu got Bailey Building and Loan for less than it would have paid if the government wasn’t biased in favor of imprudent bankers. This gives WaMu more money to pursue more targets.

Lather, rinse, and repeat. The CRA means that WaMu gets big while Scrooge-Potter stays small.

Consider the indirect effects on Scrooge-Potter BanCorp. Who would want to go to work for a bank that can’t make acquisitions because it won’t play nice with the government on CRA? Scrooge-Potter can’t buy anybody, it can only be bought. So, how’s your job security at Scrooge-Potter looking? Wouldn’t it make more sense to go work for WaMu instead?

The CRA drives the climate of opinion in the entire mortgage industry. If you wanted to be able to buy other banks, you had to play ball.

Practically everybody did. Out of the thousands of banks with federal CRA Performance Evaluations, 496 got the highest rating of Outstanding, while only five dared to be in “Substantial Noncompliance”.

The biggest noncomplier: First Bank of Beverly Hills. It had the kind of business strategy that you’d expect from a bank with that name: take in deposits from rich people and make loans to big real estate developers outside Los Angeles. Sensing the popping of the Housing Bubble coming, it was pulling it its horns when the government evaluated it. The feds didn’t like that. (You can read the government’s report and see if you can find anything shameful about how FBBH did business. I can’t.)

Over time, the madness infects the entire culture of finance, as the government labels the prudent bankers automatic losers in the great game of acquisitions.

WaMu’s 2001 purchase of Dime Bank may have been its crowning excess. But in the history of the downfall of the American economy, it wasn’t as important as WaMu’s 1990s move into California. WaMu and California went together like a match and dynamite.

In 1997, WaMu was the second biggest thrift. When the biggest thrift, Home Savings of America (owned by H.F. Ahmanson and Co. of Irvine, CA), attempted a hostile takeover of its Southern California rival, the number three thrift, Great Western, WaMu entered as a white knight. This set off a CRA bidding war. The two competed to see who could promise the most lending to the politically favored.

The Seattle Times headline on April 10, 1997 read “Wamu Loan Plan Trumps Rival—$75 Billion Inner-City Proposal Eclipses Ahmanson Bid.” Reporter Don Lee wrote:

“In the largest inner-city loan program ever proposed by a U.S. banking institution, Washington Mutual said today it will lend $75 billion to mostly lower-income and minority borrowers over 10 years if it successfully acquires Great Western Financial. Washington Mutual said the majority of those mortgages, consumer and small-business loans would be made in California. The proposal eclipses a $70 billion community reinvestment commitment made three weeks ago by Home Savings of America.”

After winning Great Western, Washington Mutual then bid for Home Savings itself in 1998, upping its Community Reinvestment ante to $120 billion. Leftist thinktank PolicyLink reported:

“In the wake of its takeover of H.F. Ahmanson’s Home Savings of America, Washington Mutual signed a $120 billion CRA agreement with the California Reinvestment Committee (CRC), the Greenlining Institute, the Washington Reinvestment Alliance, and other community groups.”[Community Reinvestment Act—Tool in Action, no date]

 Grabbing Home Savings made WaMu the nation’s number one lender of adjustable-rate mortgages. Even more ominous, WaMu was now heavily concentrated in California, a state where the combination of nice weather, environmental restrictions on housing development, and a huge influx of immigrants combined to make home prices absurdly volatile in the next decade.

Then, when WaMu bought Dime Bank in 2001, it made a binding promise to lend for Community Reinvestment Act credit $375 billion. Sure, why not?

The only problem is that $375 billion here, $375 billion there, pretty soon you are talking about real money.

The question is, how can Barack Obama, a former community organizer and a charter member of the socialist, interventionist, Big Government Left, get us out of this mess?

Answer—he can’t. He can only get us in deeper.

[Steve Sailer (email him) is movie critic for The American Conservative. His website www.iSteve.blogspot.com features his daily blog. His new book, AMERICA’S HALF-BLOOD PRINCE: BARACK OBAMA’S "STORY OF RACE AND INHERITANCE", is available here.]

By Carl F. Horowitz

There is no word for "compromise" in Spanish, nor is there a Spanish word that captures the full meaning of the English word "dissent".

There is nothing new about physical abuse, or threats of it, in a sexual relationship. Primitive conflict-resolution techniques can wind up trumping even the most fevered declarations of love.

(Nor is the commission of abusive acts unique to men. Respected researchers such as Donald Dutton, Richard Felson, Richard Gelles, Suzanne Steinmetz and Murray Straus  have shown that women commit unprovoked acts of violence against their male partners at least as often as vice versa.)

But the incidence of violence doesn’t just vary by personal situation. It also varies by culture. And the politically incorrect truth is that Hispanic cultures have a high propensity of substituting criminal violence for verbal facility as a way of settling disputes.

As Tufts University’s Lawrence Harrison observes: “There is no word for ‘compromise’ in Spanish, nor is there a Spanish word that captures the full meaning of the English word ‘dissent.’” This is both a cause and effect of attitudes acquired early in life.

The key to combating abuse is education, according to Liz Claiborne’s then-CEO Paul R. Charron. He called for more widespread adoption of Love Is Not Abuse, a model curriculum that the company developed in 1991 and now distributes to middle- and high-school students at over 350 schools across the U.S.

Needless to say, the fact that for several decades immigration policy has been inadvertently importing such attitudes was off the table.

But abuse is learned behavior. And learning doesn’t take place in a vacuum. In much of Hispanic culture, intimidation—not just self-defense—by males is considered honorable and thus “normal”. It’s a worldview passed on from one generation to the next.

And it crosses borders, too. Put simply, we are not all equally at risk

One day in September 2005, Lindsay’s mother, concerned when her daughter didn’t answer the phone, called police. The cops visited the Martinez residence, believing Lindsay could be there in hopes of giving the relationship one last chance.

The first state to adopt such a program was Texas in 2007. Again, it’s not hard to find Hispanic reasons. Let’s hope students there won’t grow up to be like Antonio Perez or Marcus Abrego.

Mr. Perez, a San Antonio resident, on February 11, 2007 fatally shot his wife, Teena, in the chest, and then killed himself with a bullet to his head.

A week later, Mr. Abrego, also of San Antonio, upset with something or other, dragged his girlfriend, Dolores Bibiano, up a flight of stairs, beat her, broke her spinal column, and left her for dead behind a wooden fence at the couple’s apartment. Paralyzed from the waist down, she has a slim prospect of recovery. The pair had three children, all of whom witnessed the attack. Abrego currently is awaiting trial at an unspecified date.

But it’s time to raise—forcefully and frankly– the strong possibility that certain ethnic groups have more trouble than others in adapting to our behavioral code. Empirical research beyond the horror anecdotes makes a case that, on average, Hispanics as a whole are less capable than non-Hispanic whites in handling disagreements within a sexual relationship.

• Raul Caetano and Craig Field of the University of Texas’s School of Public Health found that Hispanic (and black) couples exhibited three times the frequency of male-on-female violence and twice the frequency of female-on-male violence than did white couples. [Longitudinal model predicting mutual partner violence among White, Black, and Hispanic couples in the United States general population. Violence and victims 2005;20(5):499-511.]
• In a separate study, Dr. Caetano, John Schafer of the University of Cincinnati and Carol Cunradi of the Prevention Research Center at Berkeley, California found that black, Hispanic, and white couples reported violent incidents within the previous 12 months at respective levels of 23 percent, 17 percent and 11.5 percent. [Alcohol-Related Intimate Partner Violence among White, Black, and Hispanic Couples in the United States.]

(What these studies say about blacks is a subject for a separate article).

• In 2005, the University of South Carolina’s College of Nursing released the results of a survey of more than 300 Hispanic women across South Carolina. Fully 70 percent of the respondents had experienced domestic abuse during the previous year.

About three-fourths of these women did not report incidents, citing at least one of the following reasons: embarrassment; lack of fluency in English; fear of losing children; fear of losing income; and fear of deportation.

About that last one—in about a third of all cases, women believed that talking to police and/or health care providers would result in their removal from the U.S.

“They don’t want shelters”, she remarked. “They want to learn English. They want transportation and legal help”. Another researcher, Irma Santana, former director of South Carolina’s Hispanic Outreach, complained: “Women are not being educated…Health providers should be educating the Hispanic community that domestic violence is not permissible. It’s a crime here”. [South Carolina study: domestic violence prevalent among Hispanics, May 5, 2005]

Tena Hunt, one of the study’s principal investigators, admitted that around 95 percent of the women surveyed were “undocumented” (PC-speak for illegal). Yet that finding didn’t seem to trouble her nearly as much as the supposed inadequacy of social services targeted to their needs.

Apparently, neither Ms. Hunt nor Ms. Santana can bring themselves to understand that 95 percent of these women had also committed a crime simply by being in the U.S.

But that’s no surprise. Social services agencies and research groups are fairly stuffed with mass-immigration boosters who operate on the assumption that America has a duty to address pathologies among immigrants already here, regardless of legal status or even ability to assimilate. Immigration, by implication, is a right. 

The National Latino Alliance for the Elimination of Domestic Violence, better known as “Alianza”, is the lead organization in this area. Here, too, one finds the paradox: oppose the pathology, but not the people who inflict it.

At an April 26, 2005 luncheon at Manhattan’s Tavern on the Green, various speakers spoke of the need for Hispanic men to take a stand for healthy family environments. The ramped-up multimedia campaign, in its own words, “celebrates Latino values of community, family, passion, and compassion”, and “shows why domestic violence DOESN’T fit in Latino communities”.

But if Latinos are supposedly so steeped in warm communal values, why do they so often behave in diametrically opposite ways? Alianza doesn’t seem interested in addressing this contradiction.

What Alianza does seem interested in is expanding Latino-oriented social service delivery in this country.

On October 1, 2008, to kick off Domestic Violence Month, the group called for additional funds for women’s shelters. It claimed: “Several factors, including discrimination and lack of bilingual/bicultural staff, have led to an underutilization of shelters and other domestic violence services by Latinas/os affected by domestic violence”.

This appeal, steeped in the clinical language of gender-neutral egalitarianism, implies that the main roadblock to reform is American policy—not Hispanic folkways. If only we Americans can be made to understand these folkways, goes the argument, the assimilation process would go much more smoothly.

A niche industry thus has arisen to connect Anglo and Hispanic cultures. Hispanic Research Inc., an East Brunswick, N.J.-based marketing firm, for example, offers these pearls of wisdom on its website (www.hispanic-research.com):

• "Hispanics tend to be conservative/traditional in their cultural lifestyle. The men’s “machismo” clearly separates the Latino male from his Anglo counterparts. The female also plays a very different role from that of the Anglo female. These traits are especially evident in new immigrants."
• "Most Hispanics exhibit a similar longing and nostalgia for their country of origin. "

But why don’t Hispanic immigrants, at least those possessed of a machismo sensibility, express their longing by, well, returning home?

Even more to the point, why did they come here in the first place?

Apparently, these are not polite questions to ask at the dinner table—at least not to company founder Ricardo Lopez.

Immigration enthusiasts argue that, rather than close the gates to newcomers, we should invest more in education and other areas to promote assimilation and hence discourage domestic abuse among immigrants already here.

Yet, even without the likes of MALDEF and the National Council of La Raza promoting their noxious brew of ethnic triumphalism and separatism, these types of preventative measures work more easily in theory than in practice.

Susan Mattson and Ester Rodriguez of Arizona State University’s College of Nursing, for example, have concluded from their research on Hispanic immigrants that it is precisely in situations where one partner assimilates and the other doesn’t that the capacity for violence is greatest. The male in particular becomes prone to violence if his partner becomes aware of her legal rights and sheds the born-to-suffer fatalism of the old culture.[Intimate Partner Violence in the Latino Community and Its Effect on Children, ]

Joanne Klevens of the Centers for Disease Control and Prevention admits: “Role strain, especially as a result of immigration and acculturation, might be unique to Latinos, and its importance, and the importance of male dominance among Latinas experiencing IPV [intimate partner violence], deserve more research”.[An Overview of Intimate Partner Violence Among Latinos, Klevens VIOLENCE AGAINST WOMEN.2007; 13: 111-122]

Let’s put this less euphemistically: America is importing domestic abuse

Education and outreach programs might mitigate some immigrant dysfunctional behavior. But greater selectivity in whom we admit to this country will accomplish this goal faster and better.

Ingrained patterns of belief and behavior don’t simply dissipate by crossing someone else’s border.

Just ask the parents of Lindsay Ann Burke.

Carl F. Horowitz (email him) is director of the Organized Labor Accountability Project of the National Legal and Policy Center in Falls Church, Va. He has a Ph.D. in urban planning and policy development.

For some curious reason, immigrants of all stripes are lauded by America’s elite for their exemplary family values. But huddling in high-density hovels should not be mistaken for loving relationships or psychologically healthy lifestyles. There is plenty of dysfunction in those communities of diversitude, from continuing high levels of Hispanic teen and unmarried pregnancy to numerous cases of familial mass murder. Intrafamily killing deserves our attention, because it reveals the underside of immigrant communities in a way that little else can.

When an American mother like Andrea Yates or Susan Smith kills her children, the news coverage is plentiful and angry. But when a dim immigrant mom murders her kids, no one in the media seems to care.

Why is that? The dead children of foreigners are just as innocent as American youngsters.

Apparently the big brains in the editorial offices become squeamish when the sordid details of immigrant life don’t conform to the happy-face template—diverse Horatio Algers making their way up the sparkly ladder of success.

Achieving the American Dream is alive and well on paper—but less so in real life.

Following is an incomplete but representative list of unhappy immigrant parents who have murdered their children.

Last October, Said Biyad, a Bantu refugee from Somalia, killed his four children in Louisville and attacked his estranged wife with a blunt object, and then turned himself in to police. He slashed the throats of the children, aged 2 to 8, because his wife disrespected him he said. Prosecutors say they intend to seek the death penalty.

Recent news in the case has been the difficulty in finding a court interpreter who speaks Bantu.

USA Today declared that Bantus are “not latter day cavemen” and then built a convincing case that they are:

Hmong are a rudimentary agricultural people. Their written language was devised only in 1953. One shocking statistic from the 2000 Census is that “Over half of Hmong-American women … have had no formal education at all.” The same report found that Hmong living in the US “had the lowest average per-person income of any ethnic group described by the 2000 Census: $6,613.” But Hmong refugees often continue to have enormous families in this country, sometimes polygamous ones.

Ukrainian Nikolay Soltys killed several members of his family in the Sacramento area on August 20, 2001. He stabbed his pregnant wife first, then went to his aunt and uncle’s house a few miles away and killed them and two nine-year-old cousins. After that, Soltys went to his mother’s house and picked up his three-year-old son Sergey, whom he murdered the next day.

After a 10-day nationwide manhunt, during which the 27-year-old Ukrainian immigrant was placed on the FBI’s Ten Most Wanted list, he was captured in his mother’s back yard in Sacramento. The police search was made more difficult by the Ukrainians’ cultural mistrust of law enforcement and the inability of many to speak English. In February of the next year, Soltys managed to commit suicide in his jail cell.

At the time of his murder rampage, Soltys was unemployed and living on welfare. He had hoped to open an auto repair shop or become a paramedic but his failure to learn English made any career advancement impossible.

Because of the high-profile search for a dangerous and unpredictable mass murderer, the MSM paid attention. And when one listened carefully, there was mention that 75,000 Russians and Ukrainians were living in the Sacramento area.

Who knew?

In addition, it was noted that Soltys had a record of domestic violence in Ukraine and was too mentally unstable to enter the military there. But no one with a byline asked how such an undesirable character could be admitted to the U.S.

Jihad Hassan Moukalled was a Lebanese immigrant living near Detroit who had a serious gambling problem. By November 2000, he had pulled $500,000 from his printing business to cover his gambling debts and had run up large credit card bills also. Before shooting himself, he killed his three young children and wife. Evidently, he felt they couldn’t manage to live without him.

In a Grand Rapids Press article no longer online, “Immigrant gamblers have few support groups” [Dec 17, 2000, Pay Archive], local Lebanese complained that America did not offer culturally appropriate psychological help for gambling addicts. “I wish someone would help us,” said Rosemary Antone of the Chaldean American Ladies of Charity.

India immigrant Laxma Reddy shot and killed his wife Uma, his 13-year-old daughter and father-in-law as they slept in their beds in Brookline, Massachusetts in March 1997. Reddy had a medical degree from an Indian university and had left in the middle of his residency in a Cleveland hospital, apparently not able to make the adjustment to practicing medicine in the US. He had not been in contact with his family for several weeks prior to the murders. He was shot dead a few days later when he pulled a gun on a police officer in Elko, Nevada, during an unrelated traffic stop.

In Maryland there is still some mystery about the March killing of the four Rodriguez children, since the mother Deysi Benitez remains missing. They were found dead in their home along with the father Pedro Rodriguez who had hanged himself. The police now believe Pedro killed the kids.

Whatever the details of the crime, there is no doubt the family was in over their heads financially. The couple purchased a $195,000 townhouse in 2005 they could ill afford. He worked in a factory, she in a restaurant. Pedro, a Salvadoran beneficiary of TPS (”Temporary” Protected Status) was arrested for shoplifting kids’ clothing. He lost his job several days before the murders.

Deysi Benitez was born in a mountain village of El Salvador. She “was pregnant at 15, had only a third-grade education and could barely read Spanish, let alone English,” according to the Associated Press ["Missing mother of dead kids lacked the skills to build her dream" AP, March 31, 2007]

Passionately wanting the American Dream of a middle class life doesn’t mean that everyone can achieve it. Skills and knowledge become more necessary to making money. A century ago, an immigrant could more easily get an unskilled job that would support a family. In today’s global exploitation economy, a foreign family has to work several jobs just to survive. Any bump along the road, be it financial pressures or an emotional explosion, can precipitate violence from accumulated stress.

We see the sociological blowback in the huge gang problem among immigrants. In fact, if you wanted to create gangs, you would welcome families whose cultural backgrounds make them totally unprepared to deal with a society where a high degree of literacy is required. The parents struggle with survival issues of learning the language and earning enough money. The kids struggle with school, where they try to fit in but are torn by being neither fish nor fowl. The 1.5 generation lives in a cultural no-man’s land, where they receive mixed messages about whether to identify with their ethnicity or to their family’s new home. Gangs, even violent ones, provide a community of shared outlook and experiences.

It is cruel, not to mention foolish public policy, to welcome millions of uneducated people from the Third World who are unprepared for life in a complex technological society. It is hard to live in a strange country where you don’t speak the language and live in a limited cocoon with others of your tribe, alienated from the mainstream community. Multicultural cheerleaders like to downplay how difficult immigration can be under the best of circumstances. But many immigrant crimes have some basis in the interior culture clash and the ongoing stress of social maladjustment.

Less cheerleading for the multicultural delusion and more honesty from the MSM about diversity’s downside would be welcome. Less sentimental, more honest reporting about the real immigrant experience might even save some lives down the road.

Brenda Walker lives in Northern California and publishes two websites, LimitsToGrowth.org and ImmigrationsHumanCost.org. Recent events have convinced her that the Second Amendment should apply to citizens only.

The “Diversity Recession”

By Steve Sailer

Why did the

housing market turn into America’s economic
cancer—growing out of control before recently

killing economic growth?

It’s is a difficult question to answer—but not because
there is a shortage of reasons. Instead, all the causes
are interconnected——just as

all the players in the game, from the top of society
to the bottom, egged each other on.

The housing disaster is not an isolated incident.
Instead, it is intimately interwoven with most of the
destructive trends in our society:

non-traditional mass immigration, growing

economic inequality,

multiculturalism,

globalization, and the

decline of community and traditional standards of
behavior.

The economic logic of the

Bush Decade turned out to be wholly circular and
thus is now collapsing in on itself.

Yet that makes it difficult for the analyst to find a
starting point.

Trying to think about the

mortgage meltdown is reminiscent of the infinitely
recursive children’s song

Yon Yonson, which was memorably featured in Kurt
Vonnegut’s Slaughterhouse-Five:

"My
name is Yon Yonson / I live in Wisconsin / I work in a
lumber mill there / The people I meet / When I walk down
the street / They ask me my name and I say: / My name is
Yon Yonson / I live in Wisconsin…"

Similarly, in trying to explain this decade’s
socioeconomic logic, you end up with thought processes
like this:

Q.
Why did we need

so many illegal immigrants?

A. To
build all those McMansions out in the

distant exurbs.

Q.
Yes, but why did so many Americans want

to move to the exurbs?

A. To

escape all the illegal aliens flooding their
neighborhoods and schools.

Q.
Okay, so then why did we need so many illegal aliens?

A. To
build all those

McMansions out in the distant exurbs.

Everything just spins around and around, like those
chrome wheel rims, those insanely expensive hubcaps that
were the signature useless extravagance of this decade.
Neely Tucker wrote in the

Washington Post in 2005:

"Today rims are a $3.1 billion industry that stands at
the revolving heart of two American obsessions:
automobiles and finding ever more expensive ways to buy
things you already have and don’t need."

Some economist should calculate what proportion of all
the money spent on blinged-out rims came out of home
equity loans taken out on houses bubbling up in nominal
value.

Similarly, it’s hard for most people to grasp the
interrelatedness of

multiculturalism and greed in fostering the housing
bubble. "Diversity" gave the big guys an excuse
for doing what they had always wanted to do: debauch
credit standards and take the money and run, leaving the
mess to be cleaned up by taxpayers (through direct
bailouts) and savers (through Fed-created inflation
eating away their capital).

To
find a starting place in understanding how America’s
interested elites conspired across lines of race, party,
and class to defraud savers and taxpayers, let’s just
pick one name in the news:

Richard F. Syron, the CEO of Freddie Mac, a
"Government Sponsored Enterprise" that guarantees
almost $2 trillion in mortgages.

Freddie Mac

and its "rival" Fannie Mae are able to borrow
at lower interest rates than other publicly-traded
private firms because it has always been hinted that, if
they messed up, the U.S. taxpayers would bail them out
on the grounds that they were

"too big to fail."

The privilege of borrowing at below market interest
rates while lending at market interest rates is a
license to print money (until the inevitable
catastrophe, of course). In return for this license,
naturally, politicians ask Freddie and Fannie to pay off
their supporters with

loans they couldn’t get on their merits.

Because Congress controls the Fannie and Freddie, the

GSEs in turn have long controlled Congress, easily
fending off the handful of politicians prudent enough to
point out that they were on the treadmill to
destruction. Fannie and Freddie spend a fortune on

lobbying, as well as on

foundations that hand out grants, typically to

charities and pressure groups with ties to the Left.

Freddie Mac is one of those fortunate kind of entities
where the taxpayers are "implicitly" on the hook
for losses, but the bosses get paid like

private moguls rather than like

civil servants. (Heads I win, tails you lose.) Mr.
Syron, the former president of the Boston Federal
Reserve bank, has pocketed $38 million since
taking over Freddie Mac a half decade ago.

Last Monday, August 6, 2008, Charles Duhigg of the
New York Times reported

At Freddie Mac, Chief Discarded Warning Signs:

"The
chief executive of the mortgage giant

Freddie Mac rejected internal warnings that could
have protected the company from some of the financial
crises now engulfing it, according to more than two
dozen current and former high-ranking executives and
others. That chief executive, Richard F. Syron, in 2004
received a memo from Freddie Mac’s chief risk officer
warning him that the firm was financing questionable
loans that threatened its financial health."

Later last week, Freddie Mac announced a quarterly loss
of

$821 million—triple Wall Street’s expectation. (The
next day, Freddie’s larger "rival" Fannie Mae
announced a $2.3 billion quarterly loss.)

Syron struck back against his critics in the pages of
the Boston Globe, saying he was just following
orders:

“Syron yesterday defended his loan decisions, arguing
that Freddie needed to take additional risk to meet its
government mandate to provide affordable housing.
Although a private company, Freddie Mac was created by
Congress to expand mortgage credit and home ownership.
‘If you’re going to take aid to low-income families
seriously, then you’re going to make riskier loans,’
Syron said in an interview yesterday. ‘We have goals to
meet.’ “
[Syron's
side of the story, By Robert Gavin, August 6,
2008]

Indeed, the quotas for Freddie’s mortgages reserved for
"underserved
areas," (which are officially defined as
"low-income census tracts or in low- or middle-income
census tracts with high minority populations"), have
been raised from 21 percent during the Clinton
Administration to 39 percent during the Bush
Administration.

Syron prides himself that he was more dedicated to
"affordable housing" than to prudence with the
taxpayers’ money. When he arrived in 2003, Syron put an
end to Freddie’s habit of cooking the books in order to
be more cautious than Congress wanted:

"In
addition, Freddie’s commitment to affordable housing had
declined to the point it employed gimmicks to meet
congressional goals. For example, said Syron, Freddie
would essentially rent loans to meet affordable housing
goals, buying them from lenders to carry on the books at
year end, then selling them back. Syron ended that
practice and re-emphasized the

housing mission."

What could possibly go wrong with lending money to
people who wouldn’t qualify for credit without the
government leaning on the lenders? I mean, besides all
the trillions in stimulation making "affordable
housing" unaffordable without trick mortgages
concocted around the assumption that home prices can
only go up?

But don’t blame Syron for the bubble!

"Syron added the cause of Freddie’s problems isn’t those
loans, but a deep and extended housing downturn,
spreading into the broad mortgage market. US home prices
are falling for the first time since the Great
Depression, and the economy is weakening, affecting even
creditworthy borrowers."

Right … of course, housing prices wouldn’t be falling so
fast now, especially in the "affordable" tier, if
the

whole house of cards hadn’t been built up so wildly
on Syron’s watch.

The circular insanity of it all was obvious even to a
commenter on the

Calculated Risk blog who calls himself

Currently Smoking Cannabis:

"But
to meet affordable housing goals, Freddie had to engage
in activities that helped push house prices higher, and
thus more unaffordable? And the more their numbers
indicated that Freddie was dedicated to affordable
housing, the more housing was allowed to balloon
artificially?

"Am I way off the mark or is this as crazy as it sounds?
…. Gives you something to tell the people you are
doing for their benefit, while achieving the exact
opposite."

Why was Syron chosen to be CEO of Freddie Mac, anyway?
Well, one reason was that he was a hero to the Great and
the Good in the early 1990s for unmasking a terrible
societal scourge:

lending discrimination.

The
Globe’s
Gavin
credulously recounts:

"Syron
encouraged the Boston Fed’s research department to wade
into important, but contentious public policy issues.
Perhaps best known was its study of lending
discrimination, [Mortgage
lending in Boston: Interpreting HMDA data
(Working Paper 92-7|PDF)]
which found race, not lending risks, driving loan
decisions."

This study was hugely popular and influential with all
the right people:

"Joseph
P. Kennedy II, then a Massachusetts congressman,
said the study helped change lending practices and
expand credit to minority and

poor neighborhoods."

Unfortunately, it was based on

economic illiteracy. As Gary Becker’s

Ph.D. thesis (based on a suggestion by his adviser,
Milton Friedman) pointed out, if firms were

irrationally discriminating against minorities, it
would be

profitable for nondiscriminators to enter the market
and cash in.

In
reality, as Peter Brimelow and Leslie Spencer wrote in


Forbes on January 4, 1993, whites and minorities
had the same default rate back then—demonstrating
that

"[t]he
market, in short, worked. The mortgage lenders somehow
weeded out the extra credit risks among minorities, down
to the, point where white and minority defaults were at
an equal, apparently acceptable, rate."

Today, of course, minorities have higher default
rates than whites—due in large part to the

quotas whose justification traces back to the stupid
study Syron sponsored.

Now, even Syron has noticed what he hath wrought,
saying, according to a March 12, 2008 Bloomberg News
article entitled

Rules Let Too Many Poor People Buy Houses, Syron Says:

"It’s
‘perverse’ that Freddie Mac and Fannie Mae, the two
biggest providers of money for U.S. home loans, have
been encouraged ‘to put people into homes that they end
up losing."

Syron, however, is apparently in no danger of losing his
$38 million compensation.

Funny how that works.

War Against Christmas 2008: A Report

By Tom Piatak

The War Against Christmas continues to rage in 2008, in ways that have become all too familiar. Driving home the point that the War Against Christmas has nothing to do with the First Amendment, the London Daily Telegraph reported in March that the city council in Oxford—in England, a land with no First Amendment and with an established church—decided
that “the events in the city would be renamed ‘Winter Light Festival’
to make them more inclusive.” [Christmas banned in Oxford by council-owned charity, By Richard Savill, November 2, 2008]

Closer to home, the Fort Myers News-Press reported in November that Florida Gulf Coast University banned all Christmas decorations from common spaces in the university because, in the words of university president Wilson Bradshaw, “Public institutions often struggle with how best to observe the season in ways that honor and respect all traditions.” [Ho, ho, nope! FGCU to limit holiday décor | 'Political correctness' cited as reason, by Dave Breitenstein November 25, 2008] (Bradshaw has surrendered, PDF, citing an “overwhelmingly negative response.”]

On December 5, the Charlotte Observer reported that Sarah Michalak, the associate provost for university libraries at the University of North Carolina, decided to remove the Christmas trees from university libraries because “We strive in our collection to have a wide variety of ideas. It doesn’t seem right to celebrate one particular set of customs.” [UNC libraries to forgo Christmas trees, By Eric Ferreri]

But VDARE.COM readers already know that, when it comes to Christmas, “inclusion” means the exclusion of Christian symbols, no matter how popular or beloved.

And driving home the malice that animates much of the War Against Christmas, a group of atheists marred a Christmas display in the state house in Washington State by putting up a placard proclaiming not “Peace on Earth, Good Will toward Men,” but “At this season of the Winter Solstice may reason prevail. There are no gods, no devils, no angels, no heaven or hell. There is only our natural world. Religion is but myth and superstition that hardens hearts and enslaves minds.”[Atheist billboard in Capitol stirs a storm, AP, December 4, 2008]

Fortunately, there are encouraging signs that Americans are increasingly fed up with such nonsense. Colleagues at work have been showing me Christmas cards they have received from professional acquaintances actually wishing them “Merry Christmas”, a friend described to me the exuberant Christmas caroling his Ohio town sponsors on public grounds, and another friend told me how he and his wife were pleasantly surprised to be greeted with a “Merry Christmas” at each shop they visited at a local Cleveland mall.

After receiving complaints about its “Twelve Days of Holiday” promotion, Amazon.com changed it to a “Twelve Days of Christmas” promotion. MSNBC.com reported on December 4 that retailers are beginning to once again name the holiday to which they owe their good fortune:

“Wal-Mart, Kohl’s, and Target all recently brought back or bumped up their Christmas-friendly language. The word ‘Christmas’ can be seen throughout the Web sites of all three retail chains, either in marketing themes or product descriptions.”

And the online poll accompanying the story showed that 76% of the 188,000 respondents preferred “Merry Christmas,” while only 7.5% preferred “Happy Holidays.”

I realize that this is not a scientific poll. But the results are still striking since the story appeared not on a conservative website, but at the website of the network of Chris Matthews, Keith Olbermann, and Rachel Maddow.

Another indication of progress is Max Blumenthal’s attack on VDARE.COM’s’s role in first drawing attention to the War Against Christmas. Blumenthal even attacks me, claiming that “Brimelow’s writers [including me] dared to name the true anti-Christian Grinch: Jews.” [See the slightly altered version at The Daily Beast, and the original, preserved and annotated, on VDARE.com. ]

.Unfortunately for Blumenthal, his one paragraph referring to me is filled with errors. The piece of mine he cites actually repeatedly refers to “multiculturalists,” not Jews, as waging War Against Christmas. He claims I was “[t]he winner of Brimelow’s 2001 War on Christmas competition,” which was actually won by Fred Fries. Blumenthal claims I termed Hanukkah a “faux-holiday,” whereas I actually wrote that “Kwanzaa, Hanukkah, and all the rest are presented as faux-Christmases.” Blumenthal asserts that I called Hanukkah the “Jewish Kwanzaa”, neglecting to mention that I was quoting Frederic Schwarz, who described Hanukkah as the “Jewish Kwanzaa” in an article in the December 2000 issue of American Heritage Magazine in which he also discussed Hanukkah’s theological insignificance and wrote that its current incarnation is “an invented cultural celebration.”

Blumenthal claims that I “insisted that those behind the assault on Christmas ‘evidently prefer’ Hanukkah.”

What I actually wrote was that “The malice of the multiculturalists is revealed in the way they present the alternative holidays they so evidently prefer,” with those “alternative holidays” being “Kwanzaa, Hanukkah, and all the rest” of the holidays mentioned earlier in the article—”Bodhi Day, Diwali, Ramadan, the winter solstice.”

So much for Blumenthal’s reading skills.

Despite Blumenthal’s feigned outrage, it is clear that the public elevation of holidays in temporal proximity to Christmas is intended to downgrade the celebration of Christmas. Indeed, the London Daily Mail reported on November 1, 2007 that a leading Labour think tank was advocating that Christmas be “downgraded” as part of an “urgent and upfront campaign” to promote a “multicultural understanding of Britishness.” [Christmas should be 'downgraded' to help race relations says Labour think tank, By James Chapman]

The way this was to be accomplished was by promoting other holidays at the expense of Christmas—exactly as I noted in my 2007 War Against Christmas piece for VDARE.com.

More importantly, Blumenthal cannot wish away the burgeoning opposition to the War against Christmas by blaming the controversy on VDARE.COM or by making dishonest attacks on writers of whom he disapproves.

Although VDARE.com deserves great credit for leading the way in describing what is happening, it did not invent the War against Christmas any more than Newton invented gravity.

Americans simply realize that there are people who would like to see the public celebration of Christmas disappear. They are starting to fight back.

And Americans appalled by the assault on Christmas cannot let such attacks as Blumenthal’s deter them. As I wrote in my recent article on “How to Win the War Against Christmas” in Chronicles,

“If the War Against Christmas is to be won, it will be by remembering who we are and how we got here, and by summoning the courage to defend the great legacy bequeathed us by those who went before.”

Tom Piatak writes from Cleveland, Ohio.