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RED(white and blue)LINING

The Crash of 2º008 is beginning to regurgitate a plethora of chargs and counter-charges that eventually may reveal its causation to be rooted in our history of racism—both past and present—and religious bigotry, particularly anti-Semitism. When the final chapter of this calamity is written, it just may show that the noxious system of redlining in the housing and mortgage industry was the underlining catalyst that, in the end, oddly combined 1) the push of equality in home-ownership and lending, 2) political pressure, and 3) color-neutral avarice. The Daliesque trio of forces possibly may be the pas de trois centerpiece of this century’s grand ballet of financial disaster.

Redlining, in its most innocent form, might be merely a defensive system employed by housing lenders to insure the financial viability of customers in certain areas of specified evaluation. In other words, if the earning potential of a client appears not to be compatible with a given area, he/she simply is redlined, or eliminated as being eligible for that area. However,, throughout the United States, redlining was combined with another pernicious practice known as the “restrictive covenant.” This devilish duo of division was instrumental in maintaining the purity of lily-white, Christian communities—free of the contamination of African Americans and other people of color, as well as those of the Hebrew persuasion and other uncomfortable religions. This form of apartheid was not limited only to home rental and purchase. The degree of its practice depended upon geography, but it affected all public accommodations, including, transportation, hotels and motels, restaurants, theaters—and even some walk-in stores. Of course, all of the industries correlated to housing, such as insurance, equally were affected.

All of this came back to me when I heard charges that Janice Reno and the Congressional Black Caucus—and the Clinton Administration—were responsible for this debacle in dinero. There may be a kernel of truth in that. Of course, the existence of the Black Caucus is to monitor the distribution of equal justice through the legislative process. Naturally, they and a Clinton Administration attorney general would pay attention to how lenders treat people on the lower end of the home-buying racket. The suggestions are that these pressures from above seem to have freed the lending industry, at all levels, to engage in a reverse Ponzi scheme, by allowing mortgages as long as the client were breathing. These sub-prime packages were successively bundles and trundled upwardly until they reached a pinnacle of penny-pithiness—to the point where that house of cash-poor cards ultimately crumbled into our current crash. Fantasy? Just wait for the barrage of bloviating books.

The red satin lining of our national cloak of shame also is smeared with white and blue streaks.