The writers engage in journalistic prestidigitation -- look over here! no, over here! -- to try to distract from the point that it was the mismanagement and subsequent collapse of Fannie/Freddie that drove the current financial crisis.
At one point, the writers claim that "rural whites" were the objects of favoritism from Fannie/Freddie! Look at this map of the areas with the highest rate of "upside down" homeowners (owing more than their homes are worth) and see if you think "rural whites" are playing any significant role in the current crisis. (Lots of "rural whites" in Miami, Phoenix and Southern California, it seems.) Allow me to reiterate:
- On July 14, the Heritage Foundation's Conn Carroll detailed the "crony capitalism" at Fannie Mae and Freddie Mac, including the roles of Democrats Franklin Raines and Jamie Gorelick in the corruption at these government-sponsored firms.
- On July 23, Wall Street Journal columnist Paul Gigot examined "The Fannie Mae Gang."
- On Sept. 11, the Center for Responsive Politics reported that the top three recipients of Fannie Mae/Freddie Mac campaign contributions were Democrat Sens. Chris Dodd, Barack Obama and John Kerry.
- On Sept. 15, Investors Business Daily detailed the role of Raines and the Clinton administration in the mortgage meltdown.
- On Sept. 23, an op-ed column in the Wall Street Journal explained how Barney Frank's push for "affordable housing" and Senate Democrats blocking a 2005 reform measure contributed to the meltdown.
BTW, this is not about scapegoating minorities. Most homeowners, whatever their race, pay their mortgages on time. Since home ownership rates are higher for whites, and whites are about 70 percent of the adult population, it is likely that whites account for the majority of current foreclosures. (Although it's oddly impossible to find such data.) This is about a policy that, in the name of promoting minority home ownership, had the net effect of increasing high-risk loans, thereby resulting in a higher overall default rate. The default rate had been rising for years, and didn't cause too much worry until the housing "bubble" burst.