Bloomberg Comments Put Redlining, Recession Back in the Spotlight
Former New York City Mayor Michael Bloomberg is being introduced to a more national political audience as the presidential primaries finally arrive—and comments about stop-and-frisk policing policy as well as the connections between the Great Recession and the historic practice of redlining, are raising questions about the former mayor's opinions on race.
Kriston Capps explains the circumstances around the most recent round of controversial comments from Bloomberg's past as mayor of New York:
At a Georgetown University forum in September 2008, then-New York City mayor Michael Bloomberg was asked about the major economic story of the day: the roots of the exploding global financial crisis. This was the month that Lehman Brothers had filed for bankruptcy and the federal government had placed Fannie Mae and Freddie Mac into conservatorship. What was behind the bust?
Bloomberg’s answer: The implosion of the nation’s housing market was the result of the prohibition of redlining, the discriminatory practice by which lenders denied African-American homebuyers access to loans in the same neighborhoods where white homeowners lived.
Capps speaks to Keeanga-Yamahtta Taylor, professor at Princeton University and author of Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, for an aexplanation fo the problematic nature of those remarks.
Capps also notes that Bloomberg was far from the only public figure to share that opinion at the outset of the Great Recession:
Still, commentators at Fox News and The Wall Street Journal’s op-ed page often insisted that lax standards that encouraged uncreditworthy minority borrowers were to blame. Former presidential candidate Steve Forbes and former Republican House Majority Leader Dick Armey propped up an Astroturfed site, AngryRenters.com, that claimed to represent the voice of renters infuriated with mortgage bailout efforts. Fox Business’s Neil Cavuto said that “loaning to minorities and risky borrowers is a disaster.”
Capp provides these authoritative takes on the causes of the Great Recession and Bloomberg's problematic argument: "The bipartisan U.S. Financial Crisis Inquiry Commission also concluded that fair-lending regulations were not to blame for the financial crisis (with one dissenting conservative saying otherwise). Bank of America’s then-chief executive Brian Moynihan defended fair lending law."