Dept. of Unintended Consequences: Everybody a homeowner. It seemed like such a good idea. Sure, it meant government-mandated standards forced banks to make home loans to people who ordinarily could not qualify.
“Fairer mortgage standards” is what the St. Louis Post-Dispatch called it. “Non-traditional customers” was a popular term for the lucky folks who got loans they could not afford. But it worked out, didn’t it? I mean, at least, they got houses, right?
Well, no. A recent Pew Research Center study says that blacks not only have lower net worths than white but that the discrepancy is growing. Thomas Sowell has a very convincing theory on why this is the case:
A finer breakdown of the data on the net worth of blacks shows that the most drastic loss of net worth was in the value of the homes owned by blacks. This occurred after years of both Democratic and Republican administrations pushing policies designed to enable more blacks to buy homes.
Much of the media rallied behind the idea that there should be more home ownership by blacks. Editorials rang out across the land, denouncing statistical disparities between rates of home ownership by blacks and whites as showing racial discrimination in the private sector that needed to be corrected by the government.
Even when it was shown that blacks, on average, did not meet the same financial standards as whites, both politicians and the media denounced those standards as too stringent.
Many liberals think you can wave magic mandate and get any results you desire. Conservatives know there, alas, are economic laws and realities. In a way, this is the basic diagreement that underlies so much of the current debate in Washington.