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Why Do Blacks Still Buy The Government Plantation Lie?

The opinions expressed by columnists are their own and do not necessarily represent the views of

Almost two years ago, a new Democrat administration and congress took control of Washington.

They immediately sent out invitations to the American people.


“You are cordially invited onto the government plantation. P.S. We’re in charge but you pick up the tab. RSVP by November 2, 2010.”

The RSVP’s have poured in and the majority of Americans have replied “Sorry, we’ve got other plans.”

But it was mostly white voters who turned down this invitation.

Why are blacks, who know life on the government plantation better than whites, and who are proportionately being hit much harder in this difficult economy, still buying what working class whites have rejected hands down? That, as Karl Rove put it, “…we can spend our way to prosperity?”

The problem is broader and deeper. Blacks still by and large see government dependence as the remedy rather than the disease, despite overwhelming evidence to the contrary. They still choose to listen to left wing black political leadership and media who have careers in keeping it all going.

Consider that it was welfare state government policies that caused this economic collapse to begin with. And that it was community activist groups claiming to represent the interests of minorities who lobbied for these policies.

According to a new study by American Enterprise Institute scholar Edward Pinto, a former Executive Vice President and Chief Credit Officer at Fannie Mae, this is exactly what happened.

The recession was caused, according to Pinto, by the collapse of housing and mortgage markets. Markets imploded because of the proliferation of risky unconventional mortgages which spread as result of government dictates to promote “affordable housing.”


It was community activist groups such as National People’s Action and ACORN – yes the old stomping buddies of our president – that lobbied for taxpayer backed lending behemoths, Fannie Mae and Freddie Mac, to relax lending standards.

The result was new law passed in 1992 directing new “affordable housing mandates” on Freddie and Fannie.

Following this, as Pinto tells the story, HUD, the Department of Housing and Urban Development, issued new liberalized lending guidelines, directing that “Lending institutions, secondary market investors, mortgage insurers…..should work collaboratively to reduce homebuyer downpayment requirements.”

A widespread change in the mortgage lending landscape followed.

Whereas in 1990 a tiny fraction of mortgages had downpayments less than 3%, by 2006 “an estimated 30% of all homebuyers put no money down.”

According to Pinto’s AEI colleague Peter Wallison, by 2008, “almost 50% of loans…were subprime…and two thirds of them were held by government agencies or firms required to buy them by government regulations.”

In the short run, these government directives relaxing lending standards to promote home ownership were wildly successful. Home ownership rates climbed to record levels.

Of course, HUD, Fannie, and Freddie could push all this because the assumption lurking behind it all was that if it collapsed, U.S. taxpayers were there to pick up the tab.


Hey, government bureaucrats actually got something right.

Now we are left cleaning up the mess and picking up the pieces. But a tragic and ironic footnote is that black Americans, whose interests community activist groups who lobbied for all this were supposedly representing, have taken the brunt.

Black’s, whose home ownership rates skyrocketed during the government stoked boom, now have foreclosure rates twice that of whites. And, of course, black unemployment in this economic slowdown following the collapse is double that of whites.

If there was a moment of doubt that most Americans were going to buy into the government plantation lie, this last election should clear things up.

But this election also tells us we still have a divided country and many who bought the big government lie in the past still aren’t getting it.

We’ve got a lot of work to do.

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