Nation’s Mayors (and Jesse Jackson) to Solve Another Crisis

Tuesday, November 27, 2007
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Mayors from around the nation met in Detroit today for a “summit” to discuss subprime lending and the “foreclosure crisis.” These politicians believe that they can, through the power of government fiat, put an end to home foreclosures, declining home prices, financial illiteracy, and increase consumer spending and economic growth. The mayors plan to put pressure on Washington to put reforms in place to “protect” people who live well beyond their financial means. One representative from Detroit suggests the licensing of loan officers as a “solution” to the problem.

Jesse Jackson has already called for a moratorium on foreclosures, and has called this problem not one of financial literacy, but rather, he blames it on the financial exploitation of minorities. Yet, in the same breath, all of these politicians accuse lenders of pushing off complex Adjustable Rate Mortgages that the buyers don’t understand, even though they sign off on the loan. So they “don’t understand what they are getting into” (as we keep hearing), yet it’s not a problem of financial literacy (not understanding)? I watched the local 11pm news tonight, and I saw demonstrators standing outside the summit carrying signs that said “foreclosure = racism.” So what is it, then, when non-minorites are the recipients of a foreclosure?

What’s the real concern of the politicians concerning the foreclosures, of course? The loss of billions in tax revenues as cities like Detroit become ghost towns.

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