So only blacks got subprime loans no I did not know that.
No, African-Americans were not the only people who were given sub prime loans. However, the greater ideal behind making houses affordable to low income earners and the "every American should have a house" push, was, in fact, racially motivated.
The lack of homeownership in the black community led to a lack of equity in the black community. Wealth was not handed down through the two generations since the post WWII housing boom and suburban movement in the black community as it was in the white community.
This lack of inherited wealth, ultimately has led to a distinct lack of tax revenue generated in black communities (mainly through local property taxes and sales taxes). The lack of revenue led to less funding for black community public schools, ultimately leading to less prosperous career opportunities for those living in the black community.
So, while the white man was getting better jobs, sending his children to better schools, and then passing on his life earnings to his children, the black man found himself "stuck" in an apparent cycle of poverty.
This is how the belief goes to those who believe that the white man is inherently evil. While many of these cases are not debatable, the causes and solutions to this problem certainly have roots in two different philosophies.
Most white Americans today with knowledge of the subject understand that the housing rules (i.e. red-lining) were grossly unfair to African-Americans in the 1950s and 1960s. However, they tend not to feel as they should be punished due to the sins of their parents and grandparents.
On the other side of the issue, are politicians and race baiters who have pushed to pass punitive legislation for years against white America. Some examples of this include Federal Mandates requiring districts, counties, and municipalities whose residents are mostly white to share their tax revenues with those regions whose residents are mostly minority. Another example of trying to legislatively punish the white man and "level the playing field" is the estate tax.
Yet, for forty years that fair housing legislation has been in effect, the situation has actually gotten worse for the black community. That is because people with money usually know how to keep their money. They find ways to fund their school systems through fundraisers instead of extra property taxes, therefore they money they raise stays with their schools, and ultimately gets their community more involved with the schooling (again, leading to a better education than one can receive at a typical minority school).
With the sub-prime lending spree, legislators who were trying to "level the playing field" finally thought they found their solution. However, trying to reign in the dynamics of a free-market, capitalistic society is incredibly tough. Frankly, it is arrogant to believe that one can. The Federal Government pushed lending institutions to lend at low rates to non-credit worthy consumers, with the "gentleman's agreement" that if this goes bad then the Fed will step in to subsidize the lending industry. That feeling of almost immunity led a lot of money minded people to push the envelope and increase their risks in every aspect of the banking industry, ultimately leading to the fall out we are in today.
It was government regulation, the flat out demand that these people "level the playing field", that has put us in the situation we are in. The solution is certainly to let these institutions fall on their faces. Take the hard hit over the next two years, and then recover and get the Fed's hands off of industry.
Whoa...that was one heck of a stream of conscience.