To the Editor:How can the Globe write a lead story on a new Deval Patrick plan for dealing with troubled sub-prime loans without ever mentioning the fact that Deval served on the board of directors of the largest sub-prime lender in the US? The Globe reported in 2005:
In a statement to the Globe, Patrick said he joined the company's board to help Ameriquest deal with the allegations of predatory lending and to put in place policies that will protect low-income consumers.
But today everyone in the Globe newsroom apparently suffers from amnesia about this.
Readers expect you to report how many of the troubled loans that are the subject of today’s story were written by Ameriquest while Deval was serving on their board “in order to protect low income consumers”. Since your coverage does not even mention his prior involvement, small-minded people might suspect that you are showing bias.
4 comments:
I received a polite response saying:
"Space was extremely tight but you raise a good point."
A good point indeed!
Somehow another inconvenient truth that might prove embarrassing to Deval is left on the Globe's newsroom floor.
Excuse me for puking all over this but "tight space" didn't prevent the Globe from spending 1600 words and investing in overseas travel to find out if the grounds keeping firm Mitt Romney hired ever employed illegal immigrants .
But space is so tight on a Monday that the Globe doesn't have room to even mention Deval's service on the BoD of the largest sub-prime lender, from which he pocketed over $1M?
I'm sorry, but that excuse is inadequate.
Harry,
I think you miss the degree to which Patrick is directly responsible for the mortgage crisis, especially in the communities most affected.
Before Ameriquest -- indeed how he arrived at all of his lucrative private sector sinecures -- Patrick was associate US Atty Gen. There, he wontonly used the cudgel of anti-discrimination law in a way that coerced lenders into making risky loans, epscially in the areas now witnessing the highest default rates.
A 1994 National Review article, "Confiscation by consent decree - Department of Justice extorts money from financial institutions", documents the history and points out that Partick used bogus social science and the discrimination law to force banks into make risky loans. A long excerpt:
"In 1992 Alicia Munnell - then an official at the Boston Federal Reserve Bank and now a temperamental Assistant Secretary of the Treasury for Economic Policy - concocted a "study" that purported to find racial discrimination in mortgage lending. The flaws of the study have been pointed out by researchers at the Federal Deposit Insurance Corporation and by numerous journalists (including Peter Brimelow and Leslie Spencer of Forbes) and scholars (including Nobel Prize-winner Gary Becker). Basically, Miss Munnell concluded that blacks had a higher mortgage-rejection rate than whites and that this was evidence of racial discrimination.
The FDIC discovered that Miss Munnell's data set was contaminated by two institutions that specialized in soliciting mortgage applications from marginally qualified blacks. The higher rejection rate that she found damning stemmed entirely from the active solicitation of applicants who were unlikely to be qualified. Moreover, any economist worth his or her salt would know that a charge of racial discrimination in lending would require that loans to minorities show lower default rates than loans to whites. Lower default rates would be a sign that stricter standards were applied to minorities, which in turn would mean that at the margin where decisions are made, blacks were being turned down in favor of whites who were riskier (and therefore less profitable) prospects."
As the article recounts, these studies were the basis of the "discrimination" claims later brought, and the consent decrees won, by Partick.
The rest, as they say, is history.
"Moreover, any economist worth his or her salt would know that a charge of racial discrimination in lending would require that loans to minorities show lower default rates than loans to whites."
It is amazing that that article is from 1992 - I recall reading that quote and the logic of that syllogism is burned - burned - into my memory! Thanks for that.
You must be lying, flymorgue. If you said it was "seared" in your memory, then I'd believe you.
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