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Banking Crisis: The Scape-goating Begins:

We are just now beginning to see the scapegoating that was probably inevitable in the great American banking crisis, just as it always seems to follow after any man-made disaster of colossal proportions.

No financial catastrophe of the last 70 years has been as widespread or severe as the collapse of 2008, one which seems to find a huge bank going belly up, or getting seized and sold off every few days.

So far, the protections established during the New Deal that led to recovery from the great depression of the 1930s are working for many depositors – the Federal Deposit Insurance Corporation, for instance, has protected all bank accounts with balances up to $100,000.

But scapegoating has begun, and of the most despicable and racist sort. It is so severe that Mark Morial, president of the National Urban League, early this month begged Treasury Secretary Henry Paulson for a firm declaration that the problems are not the fault of minorities. So far, silence from Paulson.

Meanwhile, if you listen to and read some anti-immigrant “experts,” you would think the entire sub-prime mortgage lending mess was the doing of Hispanics. One prominent so-called immigration expert appeared to try to pin the blame on Latino banking officials.

That would be Mark Krikorian, head of the respectable-looking Washington-based Center for Immigration Studies, which bills itself as an academic think tank, but has probably never published a study reflecting positively on immigrants.

On his National Review Online blog, Krikorian in late September posted a copy of the final press release issued by Washington Mutual, the large thrift taken over by J.P. Morgan Chase after it became trapped in sub-prime tar. The press release celebrated the fact that WaMu ranked in the top ten companies of Hispanic Business magazine’s Business Diversity Elite.

“Cause and Effect?” Krikorian wondered in a brief introductory comment implying WaMu’s failure might have been the fault of its Latino employees.

Equally despicable – and just as unsubstantiated by anything factual – were the much more verbose remarks of Michelle Malkin, syndicated columnist and frequent Fox News commentator.

She blamed a host of factors for the crisis, but claimed “There’s one giant paternal elephant in the room that has slipped notice: How illegal immigration…and open-border (George W.) Bush policies fueled the mortgage crisis.”

She adds that the foreclosure capitals of America, including California’s Central Valley and Inland Empire “also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime.”

So in Malkin’s view, it’s all because of illegal immigrants, just like almost everything else that doesn’t work out. She does not, of course, tell us how illegal immigrants could have gotten the credit reports needed to secure many loans even in the heyday of sub-primes.

But wait a minute: It turns out that, according to Compliance Technologies, a provider of information to banks and government agencies, whites got 72.5 percent of sub-prime mortgages. Blacks got 16.2 percent of sub-primes, while the Hispanics so despised by Malkin and Krikorian got only 6.2 percent, substantially less than their share of the population. What’s more, a new study by a realtors’ group shows illegal immigrants are less likely than U.S. citizens to default on sub-prime mortgages.

Hispanics and blacks were actually disproportionate victims of the sub-prime scams that made many bankers and mortgage agents rich. A far higher percentage of those groups than of whites were steered into the loans at the heart of the crisis, mortgages with payments set to double or more after periods of three to five years.

Said the conservative UCLA law Professor Stephen Bainbridge on his blog, “One might not unreasonably infer that discrimination drove much of the ethnic disparities in this market. The data indicate[s] that black and Hispanic borrowers were far more likely to be steered into high-cost sub-prime loans than other borrowers.”

So, Bainbridge says, Krikorian and Malkin “make you embarrassed to be a conservative.”

In fact, it’s Krikorian, Malkin and their ilk who ought to be embarrassed and ashamed of their outright anti-Latino racism.

They wouldn’t have dared substitute the word “Jew” for “Hispanic” or “Latino” because they know they’d never escape the anti-Semitic taint that would attach to their names forever after. If they’d blamed blacks, they’d be branded racist for all time. But Latinos now are in some kind of in-between category, seemingly fair game for prejudice because some arrived here without all the proper formalities.

But a racist taint should nevertheless always apply to these and other scapegoaters for their outright anti-Hispanic bias. This banking crisis is the product of greed and fraud and government regulatory failures that cross all racial and ethnic lines. If you want to blame two groups, blame greedy new homeowners who sought to get rich off what they presumed to be ever-escalating home prices, and greedy bankers glad to take advantage of them. But anyone who tries to cast blame on racial or ethnic grounds deserves to be forever branded a racist bigot.

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