The explanation behind the sub-prime mortgage crisis

The government is blaming the banking industry, but it is really government pressure that is responsible for the problems in the industry. It is always amazing to me how government regulation begets more government regulation. Stan Liebowitz has an excellent piece on all this in last week's NY Post:

Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?
From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and "progressive" political forces.
In the 1980s, groups such as the activists at ACORN began pushing charges of "redlining" - claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.
In fact, minority mortgage applications were rejected more frequently than other applications - but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.
Yet a "landmark" 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic

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"more young black men in prison than in college" -- False

What Obama Got Wrong
Friday, December 14, 2007; Page A14

WHAT HE GOT WRONG: "I don't want to wake up four years from now and discover that we still have more young black men in prison than in college."

-- Barack Obama, rally in Harlem, Nov. 29

Obama has repeated this false claim to predominantly African American audiences, even after The Washington Post pointed out the mistake to his campaign. According to the Bureau of Justice Statistics, 106,000 African American men ages 18 to 24 were in federal or state prisons at the end of 2005. An additional 87,000 were temporarily held in local jails in mid-2006. According to 2005 census data, 530,000 African American men in this age group were in college.

Black male college students outnumber black male prisoners even if the age group is expanded to 30 or 35. The Obama campaign has not responded to several requests for statistical data to support the senator's remarks, and it has not explained a similar claim that he made to an NAACP audience on July 12.

-- Michael Dobbs

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Racial discrimination story, anarchy in a middle school

This is a very disturbing story on many levels. It is not only disturbing for the abuse that this teacher suffered, but also because her students' behavior was excused because it was part of their black culture. I suppose that it is that second part that bothers me by far the most. I don't think that we do kids any favors by excusing this type of behavior by simply saying this is the culture that they live in at home. If these kids are going to be able to function in the world as adults, they must learn what the boundaries of appropriate behavior are. You can watch a news clip of the story here.

I was also surprised that this teacher's middle school students were primarily 14, 15, and 16 with some 13 year olds. Even if the middle school goes up to 9th grade, these events apparently happened in the fall so a lot of 15 and 16 year olds were just starting 9th grade. The one document that I found indicated that middle school only goes to eighth grade.