Post racialism?(discrimination against minority borrowers)

I. INTRODUCTION

The 2008 election of President Barack Obama represents a halcyon moment in U.S. history. President Obama's election begs a critical question: whether his nationwide landslide victory catapulted the United States, with its sordid racial past, into a truly post-racial place as many claim. (1) While Obama's election was possible due to important changes that have taken place in the United States in the past fifty years, the reality is that profound disparities continue to exist between minority and white Americans that show no sign of dissipating during this Obama presidency. (2) Of these profound disparities, some of the most striking include those in the United States prison population, where 55% of all federal prisoners are African American while only 13% of the U.S. population is black. (3) Further, the academic achievement gap between blacks and whites persists even for the black middle class, (4) continuing to fuel theories of white supremacy and black inferiority. (5) In a society where 74% of black Americans have personally experienced racial discrimination (6) and where 76% of African Americans believe that they do not receive equal treatment from the police, the claim of post-racialism rings hollow. (7) In arguing that much hard work remains before Americans can authentically claim a post-racial arrival, this Essay examines the recent 2008 financial market crisis as well as several recent isolated instances of American racial disharmony in order to lay bare any post-racial claim.

The financial market crisis of 2008 continues to plague the United States and countries around the world. (8) The underlying causes of the 2008 collapse are numerous, intricate, and complex. Academic scholars, investigative reporters, and leading economists are now deconstructing the multiplicity of failures that enabled the breathtaking meltdown that nearly collapsed the global economy. (9) As this thoughtful deconstruction emerges, a disturbing trend has forcefully surfaced, wherein dozens of writers, scholars, and thinkers, motivated by politics, limelight, and self-indulgence, attempt to fix a singular or foundational cause as "the" reason for the market crisis of 2008. In an American political environment that favors scapegoating and simple explanations for complex problems, a certain noxious danger exists when society fixes singular blame to pander to those in an electorate that depend upon sound bites and embrace minimalist explanations. (10)

The magnitude of the collapse and its debilitating consequences, (11) many of which continue unrequited, (12) requires a vigilant and systematic review of causes, impacts, economic failures, and breakdowns. (13) The foundational causes of the meltdown are abundant. Despite evidence that literally dozens of failures (14) precipitated the "Great Recession," (15) many now point to a particularly nefarious singular cause for the economic crisis: minority borrowers. (16) Any honest commentator, academic, pundit, or politician will concede the depth of the failures, the breadth of the recklessness and ignorance, and the audacity of the avarice and greed that nearly collapsed the global marketplace. (17) Still, many analysts continue to try to "expose" the singular reason that the economy collapsed.

This Essay will seek to challenge the most reprehensible of the simple explanations that emerged with shocking force just minutes into the frantic days of September 2008. Challenging the most nefarious of the causation explanations for the financial crisis, this piece will interrogate post-racialism in America and will confront the "dirty little myth" of minority borrower culpability that emerged immediately upon notification that the global economy faced certain collapse.

In the early rush by commentators to evaluate the financial market crisis, several startling explanations emerged, primarily from those seeking to assign simple extrapolations. Perhaps the most startling "cause" of the near global meltdown is the "minority borrower" myth that emerged in the very first moments of the September 2008 frenzy that accompanied the Troubled Asset Relief Program (TARP) debates. During the tensest moments surrounding the mortgage crisis in September and October 2008, as TARP was furiously debated on Capitol Hill with politicians and the media delivering doomsday messages daily, many pundits on the right named "minorities" and lending to "poor minorities" as a foundational cause for the market collapse. (18) This dirty little myth played on loop at Fox News and on the Rush Limbaugh radio program for weeks and months, resonating with those Americans who receive their politics and views from such sources. (19)

In an ultimate irony, at precisely the same moment that commentators saddled minority borrowers with the responsibility for crashing a global economy, the United States citizenry was preparing to send a minority politician to the White House to take the most powerful seat in the world. During the September 2008 firestorm that threatened imminent financial Armageddon, the United States was simultaneously deeply engaged in a historic election cycle. As then Senator Barack Obama and Senator John McCain battled for the votes of this country, the campaign was blindsided by the economic crisis. In the weeks leading up to the November 2008 election, the financial market crisis played a critical role in the campaigns as both Obama and McCain worked hard to convince the voting public that each was the man best qualified to lead the country forward. (20) Most agree that Barack Obama was more convincing in that role, and Professor Derrick Bell posits that absent the market crisis, Obama would not have secured the presidency. (21)

With the financial market crisis as backdrop, President Obama overwhelmingly won the election. Dozens of commentators and millions of Americans then argued that, with the election of Barack Obama as President, the United States officially entered a post-racial era. (22) Post-racialism, in averring that the election of an African American President formally moves the nation past its racial problems, essentially maintains that an honest and open interrogation of racism and discrimination in the United States is no longer necessary. (23) According to post-racialists, America has truly arrived at our colorblind ideal. Racism is a relic of a checkered past that it has affirmatively overcome. (24)

Notwithstanding the attractiveness of the post-racial ideology, citizens made these arguments at the very same time people who were hailing a new post-racial America floated and adopted a simmering racist myth. While markets were roiling in September and October 2008, (25) with financial Armageddon at the nation's doorstep (26) and two presidential candidates debating the possible effects and solutions, (27) the right created and peddled a simple message to the consuming American public as the primary reason for the collapse of the global markets: minorities. Right wing commentators and politicians served up African American and Latino borrowers as the scapegoat to explain why the global economy was failing. (28) The dirty little myth maintains that because of governmental intrusion into the home lending industry through the Community Reinvestment Act of 1977, the government forced lenders to provide loans to extremely risky minority borrowers, who themselves were overreaching by trying to purchase homes that they had no business buying. (29) Because lenders had no choice but to provide loans to risky minority borrowers, subprime loans became the avenue of choice for lenders, and it was the current failure of black and brown homeowners to pay their mortgages that caused the subprime mortgage industry to collapse. Thus, as the myth purports, the financial market crisis is ultimately traceable to minority Americans and governmental social welfare. (30)

With precious little evidence to support this scapegoating, many U.S. citizens have embraced the dirty little myth with vigor. (31) And this percolating resonance continues to survive as myth proponents today include economists, (32) conservative think tank employees, (33) Wall Street insiders, (34) mutual fund presidents, (35) pundits, (36) and average citizens. (37) That the dirty little myth would spring up at the onset of this generation's greatest economic ordeal is disappointing. That so many would embrace the dirty little myth with so little to support it, with scant questioning or thought is demoralizing. The myth is particularly mystifying in an era where many post-racialist Americans are determined to believe that with the election of African American President Obama our nation has crossed over into a colorblind space. (38) Critical Race Theory, however, provides insight into how a twenty-first century dirty little myth can still find traction in the United States.

The powerful continuing dynamism of entrenched traditional American racism persists in our newly acclaimed "post-racial" United States. (39) This static feature--relentless U.S. racial discrimination--simply evolves, and as the laws change to outlaw various manifestations of overt racism, it merely mutates into new and sophisticated, complex manifestations of race hatred. (40) This mutation involves racist embrace of any available mechanism or adjacent expression to subordinate the interests of minorities in the United States and oft-times seeks to attach liability in careless ways to any available minority scapegoat. (41)

The dynamism and continuing intensity of American racism is clearly evident in the financial market crisis of 2008. Intense and complex economic forces and failures caused the market collapse--not minority borrowers. (42) Further, claims of post-racial arrival are belied by continuing occurrences of U.S. racial dissonance that refuses to fade. The Henry Louis Gates debacle, (43) the Shirley Sherrod firing, (44) and the Jordan Miles police beating (45) clearly indicate that claims of American post-racial harmony are not just premature, but evidence a subtle, if not outright, racism in those determined to make that claim.

This Essay begins in Part II by evaluating, and then discrediting, the dirty little myth that emerged in the early days of the financial market crisis. Part III considers the impact of three emblematic racial episodes in the recent past in light of post-racial predictions, including the police harassment of Harvard Professor Henry Louis Gates, the Agriculture Department's termination of Shirley Sherrod, and the Pittsburgh Police Department's brutalization of African American honors student Jordan Miles. Part IV interrogates post-racialism in light of the dirty little myth and the relentless nature of American racism represented by the Gates/Sherrod/Miles affairs. Part V concludes the Essay.

II. FINANCIAL MARKET CRISIS MYTH

The financial market crisis of 2008 has at its root the failure of dozens of mechanisms, laws, individuals, and decisions. (46) Still, despite overwhelming evidence that a mostly white male Congress, mostly white male Wall Street insiders, and mostly white male securities speculators perpetrated nearly every one of the spectacular failures that precipitated the crisis, the dynamic and relentless nature of American racism still emerged in a startling way. As described by Critical Race Theory, institutional and structural racism has never been appropriately dealt with or eliminated in the United States, and because it has not, continuing manifestations of race hatred simply mutate and find expression in ways that serve to further the interests of the majority. (47) This mutation was on clear display in the days, weeks, and months following the financial market meltdown of 2008, as the dirty little myth spread like a virus throughout the nation.

A. The Dirty Little Myth

In the days following the collapse of Lehman Brothers and as Congress was intensely debating and posturing in connection with whether to pass TARP, a stunning message began to seep out from Fox News, conservative commentators, and Web 2.0. (48) These sources began peddling a nefarious tale that essentially blamed the failure of the U.S. capital markets on minority borrowers who were now defaulting on their subprime mortgages, which was the primary factor leading to the collapse of the global economy. (49) Through federal governmental intervention, in the form of the Community Reinvestment Act of 1977 and the securitized subprime loan purchasing activity of Fannie Mae and Freddie Mac, lenders were "forced" to provide undeserving minorities with mortgage loans they never should have written. Subprime mortgage loans were required to be written, according to the dirty little myth, against the will of the lenders. (50)

In September 2008, when Senator Chris Dodd and Representative Barney Frank emerged from an emergency closed door meeting with then Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke, both Dodd and Frank were stunned, ashen faced, sobered, and visibly shaken. (51) Congressional leadership had just learned that if Congress did not immediately approve a $700 billion bailout of the U.S. financial system, financial Armageddon would ensue. (52) Thereafter, a strange dance materialized where a failed Republican presidential administration in lock step with Democratic congressional leadership rushed through legislation that eventually committed S850 billion of taxpayer money to save the U.S. economy by bailing out those Wall Street financial institutions whose leadership had driven them to the point of utter collapse. (53)

When the dirty little myth began to emerge, it did so with force. Financial Armageddon as the fault of minority borrowers in urban centers around the country who took out loans they could not possibly re-pay (54)--all made possible by the Community Reinvestment Act, Fannie Mae, and Freddie Mac--seemed absurd to many, but it found undeniable traction. (55) Neil Cavuto on Fox News stated, "Loaning to minorities and risky folks is a disaster." (56) An article by Ann Coulter trumpeted the headline "They Gave Your Mortgage to a Less Qualified Minority." (57) Congrcssperson Michelle Bachman, a Republican from Minnesota, on the House floor and later on Larry King Live said, "Look at the housing crisis. Government has to take its share of the blame. After all, government was goading these mortgage lenders [saying] 'if you don't give loans out to marginally credit worthy people, we're going to come after you.'" (58) In fact, according to the myth, the overzealous enforcement by the government of the Community Reinvestment Act forced quotas on banks to encourage diversity in the housing market by lending solely "on the basis of race." (59) This is simply false. (60)

On MSNBC's Morning Joe, former Republican presidential candidate Pat Buchanan stated flatly that "the Feds leaned on banks and threatened some of these banks [saying] 'you've got to make more loans,' and pushed them out ... frankly, in minority communities. And they pushed them out and the guys put nothing down ... and then the banks sell the loans off to Fannie and Freddie." (61) Joe Scarborough responded, "And that's what happened. Banks made bad loans. They sold it to Fannie and Freddie." (62) While many reputable sources were quick to denounce Buchanan, Scarborough, Cavuto, and Coulter, (63) they had unleashed the myth, and it began to creep into households and mindsets across the country. (64) …