During his tenure as mayor of New York City at the height of the 2008 financial crisis, Michael Bloomberg appeared to blame the chaos on banks making loans to black Americans.
In newly resurfaced comments from September 2008, Bloomberg said the end of “redlining” put pressure on banks to make riskier loans for homeowners of color.
It’s the latest round of comments that have landed the billionaire Democratic presidential candidate in hot water over his record on race.
Over a decade ago as Wall Street financial giants verged on collapse, Mike Bloomberg, the 2020 Democratic presidential candidate who was then the mayor of New York City, tried diagnosing the cause of the economic chaos.
In newly resurfaced comments from a Georgetown University forum in September 2008, he pointed a finger toward the ending of a discriminatory practice against black Americans known as redlining.
“It all started back when there was a lot of pressure on banks to make loans to everyone,” the billionaire said at the time. “Redlining, if you remember, was the term where banks took whole neighborhoods and said, ‘People in these neighborhoods are poor, they’re not going to be able to pay off their mortgages, tell your salesmen don’t go into those areas.'”
Redlining refers to a historical government-backed practicedesigned to segregate black Americans into separate neighborhoods and bar them from access to home loans.
He went on: “And then Congress got involved — local elected officials, as well — and said, ‘Oh that’s not fair, these people should be able to get credit.’ And once you started pushing in that direction, banks started making more and more loans where the credit of the person buying the house wasn’t as good as you would like.”
Bloomberg is accurate that risky loans helped spark the crisis, but experts since the crash have said communities of color were often the targets of predatory lending.
“It’s been well documented that the 2008 crash was caused by unethical, predatory lending that deliberately targeted communities of color,” said Debra Gore-Mann, the president and CEO of the progressive nonprofit Greenlining Institute, told the Associated Press, which first reported the remarks.
Don’t blame the sketchy math used in the design of collateralized debt. Ignore the machine of suck and focus on the suckers. makes perfect sense right? cdo’s and cdo squares were designed to fail.