Spreading the poverty around 3

Working feverishly on his socialist leveling plan, Obama intends to move people of low income or total state dependency into affluent neighborhoods.

Will the impecunious be able to afford the colossally high property taxes normally imposed on such neighborhoods (more to punish the rich than to provide excellent services)?

The answer must be no, they won’t be able to. So what will be done?

Will the poor get special subsidies, or special reductions?

If so, those benefits would constitute a sound incentive for the poor people to stay poor. A rise of income could put them into the higher property tax bracket.

We wouldn’t be surprised if that’s what will happen. Keeping the poor poor is the major preoccupation of the “progressive” Controllers – matched only by their passion to make the rich poor too. Except themselves, of course.

What else is wrong with the idea? Lots.

This is from an editorial at Investor’s Business Daily:

President Obama’s new suburban integration plan won’t just harm the middle class by reducing safety and property values. It won’t even provide the economic benefits it promises to relocated minorities.

We know this because HUD already tried a similar experiment under President Clinton of resettling urban poor in the suburbs. It failed, as a HUD study reveals.

From 1994 to 2008, HUD moved thousands of mostly African-American families from government projects to higher-quality homes in safer and less racially segregated neighborhoods. The 15-year experiment, dubbed “Moving to Opportunity Initiative”, or MTO, was based on the well-intentioned notion that relocating inner-city minorities to better neighborhoods would boost their employment and education prospects.

But adults for the most part did not get better jobs or get off welfare. In fact, more went on food stamps. And their children did not do better in their new schools.

The 287-page study sponsored by HUD found that adults who relocated outside the inner city using Section 8 housing vouchers did not avail themselves of better job opportunities in their new neighborhoods …

“Moving to lower-poverty neighborhoods does not appear to improve education outcomes, employment or earnings,” the study concluded.

Even then-senior HUD official Raphael Bostic, a black Obama appointee, admitted in a foreword to the 2011 study that families enrolled in the program had “no better educational, employment and income outcomes”.

Worse, crime simply followed them to their safer neighborhoods. “Males … were arrested more often than those in the control group, primarily for property crimes”, the study found.

And changed the once safer neighborhoods into  unsafe neighborhoods for rich and poor alike.

The same progressive prognostications we’re hearing now from Obama officials — that moving inner-city blacks closer to good jobs and schools will close “racial disparities” in employment and education — were made by Clinton social engineers back then.

Of course, even when reality mugs leftists, they never scrap their social theories. They just double down. Bostic insisted the problem was merely a matter of scale. “A more comprehensive approach is needed,” he said.

But the study’s authors doubted any better results from a larger or more aggressive relocation program that placed urban poor in even more affluent areas.

“The range of neighborhood variation induced by MTO is about as large as what we could possibly imagine any feasible housing policy achieving,” they argued.

Indeed, the ambitious social experiment involved more than 4,600 families from several major cities. No matter. The Obama regime wants to nationalize the experiment by relocating millions of people in more than 1,250 cities and towns until social engineers “eliminate racially and ethnically concentrated areas of poverty”. 

“We’re giving every person an equal chance to access quality housing near good schools, transportation and jobs no matter who they are or what they look like,” HUD chief Julian Castro said, unveiling sweeping new rules forcing cities to diversify suburbs by re-zoning.

Expect the same failed results, but on a national scale.

Getting it and getting away with it 0

Investor’s Business Daily reports that Alan Greenspan “gets it” – which should not come as a surprise considering he was Chairman of the Federal Reserve for nearly 20 years – and recaps what happened that made America and the world poorer.

Testifying before the Financial Crisis Inquiry Commission, the former Fed chairman told some plain truths he didn’t dare utter when he headed the central bank. Most notably, Greenspan implied it was Congress’ meddling incompetence — not the Fed, or free markets, or greedy bankers — that created the financial meltdown. …

It wasn’t the Fed that caused the housing crash and financial meltdown. It was Congress and the White House.

The mess began in the 1970s when, during the Carter administration, left-wing activists attacked banks for supposed “redlining” practices that let them discriminate in making home loans.

In response, Congress passed the Community Reinvestment Act, which gave regulators the power to force banks to lend money to “low-income, minority, and distressed neighborhoods.”

To fund all this new lending, they used two little-known government-sponsored enterprises — Fannie Mae and Freddie Mac — and essentially rewrote credit standards for the banks, weakening them substantially. Banks made loans, then Fannie and Freddie bought them — using borrowed money to do it.

In this environment, credit ratings no longer mattered much. Neither did having a job or a steady income. What mattered was race.

The process got supercharged in 1992, when a Democrat-led Congress pushed Fannie and Freddie to buy even more mortgages from banks that had made loans to low-income and minority buyers. In 1996, President Clinton’s Department of Housing and Urban Development told Fannie and Freddie that 42% of their financing had to go to those with incomes below the median.

By 2000, HUD [Department of Housing and Urban Development] Secretary Andrew Cuomo proudly unveiled “new regulations” to “provide $2.4 trillion in mortgages for affordable housing for 28.1 million families.” Despite subsequent efforts at reform, Democrats in Congress — led by Sen. Chris Dodd and Rep. Barney Frank — rejected major changes to Fannie and Freddie.

We’re still paying for that today. Fannie and Freddie have gotten a blank check from the government for their losses, and still owe more than $5 trillion that they can’t pay off.

We’ve been critical of Greenspan in the past, but on this, he’s completely right. The biggest villain in the whole financial meltdown isn’t the “private sector,” as some in Congress — like Rep. Frank — have tried to claim. It’s Congress itself.

Shouldn’t those responsible, notably Chris Dodd and Barney Frank, be made to answer for the world-size wreck? What they’ve done to the economy makes Bernie Madoff’s crooked scheme look paltry.

If it’s not to find who is guilty, so that the culprits may be consigned to their just deserts, what is a Financial Crisis Inquiry Commission for?