RACIAL POLITICS! Did poor minorities cause the crisis?

The Wall Streeters often used shaky accounting schemes to buy the loans from brokers who were not regulated by anyone. These brokers took their generous commissions and ran. Like the first people to cash out of a pyramid scheme, the brokers were out of the picture before they could be held accountable for fraud, misrepresentation or other coercive tactics they used to sell the bad loans. Thus, a system of non-accountability flourished outside of the regulated financial system, in what Floyd Norris of The New York Times calls the "shadow banking system."

A crisis arose from a perfect storm: There was the loose-money era created by low interest rates set by then-Fed Chairman Alan Greenspan and a burgeoning, unregulated financial sector. Then we saw the integration of financial systems around the world. Many older CEOs did not really understand these new and complex financial instruments that were too good to be true. Even if the CEOs did, they had no incentive to rein them in because they brought huge profits to their companies, and golden parachutes to them, when things collapsed.

The racial scapegoating in this financial crisis has echoes of another political season two decades ago. Willie Horton, a convicted murder, raped a Maryland woman and beat up her boyfriend while he was out on a weekend furlough from Massachusetts, where Michael Dukakis was then the governor. In 1988, during the winning presidential campaign of George H.W. Bush, the late Lee Atwater, Bush's strategist and a mentor to Karl Rove, announced, "By the time this election is over, Willie Horton will be a household name."

The ad based on Horton, made by a political action committee, became infamous because it never mentioned Horton's race. It featured just a picture of Horton's close-up prison mug shot looking fearsome and warlike with uncombed, nappy hair, a beard and an ice-cold stare.

Being the crafty Republican strategist that he was, Atwater, in choosing to make Willie Horton a household name, affixed a black face to the national problem of crime. This Machiavellian manipulation distorted the fact that 16 white prisoners and only two black prisoners had been furloughed under the program. But facts lost out in the '88 election. H.W. won.

Present-day circumstance cannot fall prey to the same manipulation. Racializing a complex global financial panic is an unforgivably incendiary tactic that has special significance because Barack Obama is the first black nominee for president of either major political party. This campaign, unlike Michael Dukakis' campaign in 1988, is more vulnerable to crude racial manipulation. We have witnessed the claims that Obama is a Muslim, an unpatriotic, American-hating radical, with a wild wife and a raving black pastor. The Atwater Alumni Club seems to forget that their patron saint, Lee Atwater, recanted the Willie Horton tactics and apologized to Dukakis before he passed away in 1991.

Still, the bare-knuckle strategies persist. The sub-slime ploys continue as the Joe Six-Packs of America inject race into a global financial panic. Enough! I hope that this election year, Americans push these race-baiting tactics back into the racial Stone Age where they belong.

This article was written by Emma Coleman Jordan, a professor of law at Georgetown University Law Center, where she teaches Banking, Commercial Law and Economic Justice. She is the author of several books on race, gender and economics.





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