In the wake of the 1992 L.A. riots, Bush lowered standards of creditworthiness for inner-city home buyers. But it was Clinton who opened the floodgat… - Christopher Caldwell

" "

In the wake of the 1992 L.A. riots, Bush lowered standards of creditworthiness for inner-city home buyers. But it was Clinton who opened the floodgates of housing credits by threatening, on the strength of misrepresented agency data, to find lenders guilty of “redlining” black neighborhoods. He used the Carter-era Community ­Reinvestment Act to pressure banks politically. Black homeownership rose by 25 percent between the mid-1990s and the mid-2000s. This was the era of subprime loans, which would bring on the crash of 2008 and the ensuing global recession. The American media has never been comfortable acknowledging that minority homeownership programs were at the root of an international economic calamity. But economists (notably Atif Mian and Amir Sufi of Chicago, and Viral Acharya of NYU) have understood it all along, and the progressive Cambridge University ­historian Gary Gerstle, in his recent The Rise and Fall of the Neoliberal Order, puts the Bush-Clinton subsidies squarely at the center of the 2008 crash.