News that Clinton campaign manager Maggie Williams was paid $200,000 to help a New York-based subprime lender revamp its business practices brings up one of the interesting racial cross-currents of the crisis. There was -- still is -- among politicians and activists and some economics a belief that home ownership is the key to building real wealth among African Americans, and companies who made it easier to take out home equity loans were to be lauded for their willingness to reach out to these communities, and not knocked for any attempt to exploit the financial ignorance of poorer black families.
« Iran And Iraq, Together | Main | New Mexico, Too » Subprime Paradox31 Mar 2008 12:44 pm Comments (6)
There is nothing to explain. She lent the campaign $5m from her pocket change purse. In them cold parts of the country, there is lots of slush around this time of the year, and with it, you can fund anything. Besides, she will not be releasing those financial records (tax returns plus the Clinton foundation records), because she will quit on or before April 15. What the Hillbilly campaign is about now is analogous to the British at Gallipoli around December 5th, 1915. The campaign is in full retreat, but leaving behind a good impression so the contributions keep coming in so she can end the campaign without a debt. A clear signal is whether the media buys between now and April 22 are cancelable without penalties. I suspect they can all be canceled with little or no penalties by April 14. My bet: Hillbilly will bail by April 15, pocket the money that would have gone to advertising, and she take the money and run. Another subtle shift you should expect to see is a renewed appeal for funds now but sharp downplaying of the get out the vote activities for April 22. Expect little or no funds to be spent on that between now and April 15. 
"There was -- still is -- among politicians and activists and some economics a belief that home ownership is the key to building real wealth among African Americans, and companies who made it easier to take out home equity loans were to be lauded for their willingness to reach out to these communities, and not knocked for any attempt to exploit the financial ignorance of poorer black families." This sentence is a bit of a non sequitur. What you say in the first part of the sentence is correct - many people think that increasing home-ownership is a good way to increase wealth. But almost no one thinks that increasing home ownership is as simple as "making it easier to take out home equity loans". It matters a great deal how the loans are offered and to whom. Loans written to people who have no hope of repaying them or with hidden escalation clauses are rightly condemned. As we have recently been learning, there has recently been a shocking amount of fraud in the subprime market. The question in this case (as in any other) is what the lending practices actually were. I have no idea - it may be that Ms. Williams gave excellent advice and that the company's practices were on the up-and-up. But it's not enough to say "more loans good."
Marc, did you mean mortgages rather than home-equity loans as a a way to build wealth? Home-equity loans are a way to detroy wealth (unless maybe if you're investing the loan proceeds, but people whose home is their main asset shouldn't be doing that kind of speculating anyway). Texas banned home-equity loans until 1997 because of the dangers they pose to homeowners.
Predatory lending is better than no lending at all? Perhaps...but why should that be choice for people who live in low-income neighborhoods?
we care about this "story". no, seriously. we do.
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Hey, it's nice that we know all about Maggie Williams' financial dealings and also Henry Cisneros but it is still unimaginable that we do not yet have a clear picture of the candidate's own personal financial history. Anyone want to explain the hold up? hadenough?
Posted by Philly Dog | March 31, 2008 12:55 PM