Wed 15 Oct, 2008
Tags: Reparations, Slavery
Long before being implemented, the $700 billion financial bailout package agreed to by Congress and President Bush late last month has already had dramatic effects on world markets and the global economy, not to mention the U.S. presidential campaign.
(This was true even before the bailout package morphed from a scheme to purchase distressed mortgage-backed securities into a plan centered on pumping money directly into banks by investing $250 billion in ownership interests, which is what many economists have been recommending, often since the start of the crisis. All of this, however, has raised the potential cost of the bailout to taxpayers to $2.25 trillion.)
One interesting result of all this has been complaints from bloggers and others that Congress appears to be willing to offer Wall Street a $700 billion handout, while politicians insist that there would be no money available to pay reparations for slavery.
The flip side of this is the myth currently making the rounds of conservative bloggers and talk shows that the mortgage crisis was somehow caused by government policies which forced banks to make loans to unqualified black applicants. The general argument seems to be that provisions in the Community Reinvestment Act, which were aimed at preventing discrimination against qualified black applicants, instead forced banks to offer sub-prime mortgages to minority applicants who didn’t meet the standards applied to white mortgage applicants. Needless to say, this notion is entirely wrong, but many fine bloggers have been forced to spend time refuting these claims.