Better Off in 2004 ?

The Drum Major Institute, a left-wing think tank chaired by former ambassador Andrew Young, has released a 2004 Year in Review report. The report includes a section on the best public policy and the worst public policy of the year 2004. Here's a paragraph about policy proposals that escaped my attention until I saw it listed as the worst policy proposal of 2004:

BUSH GIVES WORKING-CLASS NO CREDIT

A major theme of President Bush's re-election campaign was his "ownership society" agenda, a focus on policies to empower Americans to buy their own home, start their own business and carve out a place in the middle class. Key to achieving that goal is the Community Reinvestment Act (CRA), which requires banks with assets of more than $250 million to provide banking services, loans and investments to low- and middle-income residents in the communities in which they are situated. In October, a set of proposals by Bush administration appointees threatened to raise the minimum asset level of banks before they are required to participate to $1 billion, up from $250 million, freeing nearly 90 percent of all banks from complying with CRA. For leaving working-class Americans completely on their own, this proposal earns a place in this year's "Worst of Public Policy."

Policies like this raise a red flag in my mind. It reminds me of a very unpleasant experience I had trying to sell my first house.

My wife and I bought our first house when I was in Seminary working on a Ph.D. We bought a home in a neighborhood that was integrating racially. White people were moving out and African-Americans were moving in. When we were buying the house, our realtor did her best to talk us out of moving into that neighborhood. We thought that prejudice was all that was informing the advice she was giving us. We were not threatened by African-Americans and we were happy to do something to stem the tide of white flight.

We lived in that house for eight years. We never had any problem with vandalism, burglary, theft, noise, nosey neighbors or nit-picking neighborhood associations. We had fine neighbors and good friends who lived in stable, loving families -- some of them in marriages of mixed race. It was a delightful place to live.

When I graduated from Seminary and was called to pastor a church in Houston, we put our house on the market. We were satisfied with an appraisal that showed the value of the house had only increased by 50%, knowing that values had declined to that level from the nearly 66% increase that houses in the neighborhood (next door) had sold for a couple years before.

Over the next year we had several contracts from people who wanted to buy the house -- all of them African-American couples. None of them, however, could qualify for a loan to buy the house -- no matter how much the price was lowered.

Finally, after fifteen months, we gave the house to the first real estate speculator we could find who would take over the payments and get the loan out of our name. Otherwise, we could not qualify to buy a home in Houston.

Later, we learned about a bank practice called "red lining" where certain people (mostly African-American) and certain neighborhoods (mostly African-American) are excluded from credit by bank policy. At one time, we passed laws to prohibit such practices, but that was before we were told that all government regulation is just bureaucratic red tape that causes a drag on our economy.

If you can't trust American bankers to treat people fairly and look out for the common good of their comunities, who can you trust?