I like to pay close attention to the comparisons a politician uses for insight as to what they are thinking and more importantly how they think. Today on Meet the Press John McCain was asked if the current 700 billion dollar package that included government ownership positions in banks, and his own proposal for the government to purchase mortgages at market prices was in effect asking those who pay taxes to subsidize the mistakes of others, and taken together was that not socialism.
Part of his response really got me to thinking and not for the regular reason-that he completely failed to address the original question and instead devolved into normal McCain talking points, but in how he characterized the people who have been hurt in the financial crisis. He stated that they were the victims of a drive by shooting.
...In times of crisis, we go in and we try and help the people, especially in this situation where they're the, the victim of a drive-by shooting by excess, greed and corruption in Washington and Wall Street. And again, I and others said we have to have legislation to rein it in. Senator Obama didn't lift a finger. Meet the Press Transcript
It’s not the first time I’ve heard him refer to the crisis as a drive by shooting, so it really got me to reflect on the nature of drive by shootings, and how although I doubt he meant it in the same way the description is apt.
I’m from Southern California and I spent my early 20’s when the drive by phenomenon was stewing unnoticed by wider America on the streets of Los Angeles. I can truly remember the nagging feeling of maybe being in the wrong place and time and the anxiety of inadvertently catching the eye of the wrong car load of young men. It got me to think of the first real drive by to break onto the wider American psyche as more than just young black gangsters killing one another the 1988 killing of Karen Toshima and how it may relate to our current crisis and John McCain’s use of the analogy.
It began as a pleasant Saturday night out for Karen Toshima: dinner with a friend and a stroll through the bustling Westwood Village on the affluent West Side of Los Angeles. A short time later Miss Toshima, a 27-year-old graphic artist, lay mortally wounded on the sidewalk next to a parking meter, a bullet through her head.
She was the latest innocent victim of the West Coast's vicious youth-gang wars.
There were 387 gang-related killings in Los Angeles County in 1987, but it was not until the terror spread to the mostly white Westwood area near the campus of the University of California at Los Angeles a week ago that Angelenos began to take notice.
The result has been a political quarrel that has turned latent racial sensitivities raw. While there are hundreds of youth gangs of every ethnic variety, it is the black gangs that are the most potent and violent. Their 25,000 or so members, often armed with automatic weapons, vastly outnumber the police and are said by local law-enforcement officials to have become the central distributors of rock cocaine, or crack, throughout the American West. 'Our Babies Cannot Play'
Miss Toshima's murder brought a wave of public anxiety, a tripling of police patrols this weekend in the popular Westwood movie-and-restaurant district, a proposal in the City Council to pay a $25,000 reward for her killer, calls for a crackdown on the gangs and, on Saturday, the arrest of Durrel DeWitt Collins, a 19-year-old black youth, as the chief suspect.
But it also brought anger from some blacks who, while deploring the Toshima killing, said that no such concerted police and media attention attends the numerous killings of innocent blacks by gangs in the predominantly black south central part of Los Angeles, the scene of 118 of the 205 gang killings in the city last year. In one case, a 9-year-old black boy was shot while playing on a swing in a playground in a random ''drive-by'' killing preferred by gangs to demonstrate their courage. Karen's story
If you are old enough to recall this crime and are not from Southern California this incident probably was the first time you heard of the carnage that was occurring in Los Angeles. It had festered for several years as crack profit gave gangsters access to weapons and the desire to get aggressive in defense of their turf. Yet it wasn’t until a “civilian” was killed that real national attention was paid to the problem. Unspeakable violence had been on the loose for years in minority communities. People had to build cages around their windows and doors and put their children to sleep in bathtubs for fear of the violence and gunfire.
Today we have a similar situation but with financial instead of physical violence. For several years now Blacks and other minorities have been unfairly targeted for sub prime loans by predatory lenders. Here is the issue as described by our late Democratic lioness Stephanie Tubbs Jones.
Predatory lenders often target low-income and minority communities. Subprime loans are three times more likely in low-income neighborhoods than in high-income neighborhoods and five times more likely in minority neighborhoods than in white neighborhoods. Additionally, they often prey on the elderly who have been in their homes all of their lives and have a substantial amount of equity in their home. They promote balloon and adjustable rate mortgages that look attractive and are affordable in their initial stages. However, after two years or more, these loans readjust to much higher payments with higher interest rates.
One of my constituents is currently in an adjustable rate mortgage, which locked in a payment of $1,088 for two years. After two years, the mortgage payment increased to $1,488. Three months later the payment increased to $1,715. This payment increase has had a significant impact on this individual’s budget and because the person is not in a position to refinance, foreclosure looms.
Predatory lending has expanded its reach beyond mortgage lending, becoming increasingly prevalent in refund-anticipation, auto and payday loans. There were over 12 million refund anticipation loan borrowers in 2003. Tax preparers and lenders strip about $1.57 billion in fees each year from earned-income tax credits paid to working parents, according to a 2005 study by the National Consumer Law Center.
It is also estimated that predatory payday lending practices cost American families $4.2 billion annually. Additionally, research indicates that minorities pay on average $2,000 more per vehicle purchased than non-minorities. Predatory auto lending is taking an estimated $2 billion a year out of African American communities alone.
The statement from Stephanie
I see the same thing having occured with the financial crisis as with the issue of drug induced gang violence. The minority community suffering a systemic issue that did not erupt into the national and in this case international psyche until it affected the general population as a whole.
I don’t believe that our financial melt down was caused by loans to poor people. Imagine how disappointed old Yuri Andropov or Konstantin Chenenko would be lying in their graves thinking that all they had to do in order to destroy capitalism was to make a few loans in Watts. I believe it was caused by the unregulated securitization of these mortgages along with countless other kinds of debt vehicles. I think it was caused by allowing products like credit default swaps to act like insurance products without regulating them as such as illustrated here
Credit Default Swaps as Insurance Products.
I think it was caused by all parties concerned in the mortgage and other credit backed securities markets completely losing track of what was contained in the investment vehicles they called tranches, however there can be no doubt that issues with foreclosure has played a tremendous role in our continued crisis.
So, is America the victim of a drive by with the posse in the car excess, greed and corruption? Were they allowed to cruise around Compton shooting and maiming people at will, but it only got serious when they got to Westwood and hit Karen Toshima in the form of the wider American economy? Did John McCain hit upon a kernel of truth with his description of America as a victim of a drive by, but with the addition of McCain and his Republican deregulator friends as drivers of the get away car? What do you think?