Recent reports suggest that the Obama administration is about to usher in a scheme that could set the financial services industry back on its heels and make the recent financial crisis and housing bubble seem like a hiccup.
We’ve heard the president’s own peculiar brand of “equality” for at least five years now — to replace “equal opportunity” with “equal results.” The Obama administration now wants to apply that notion to almost every facet of everyday life.
According to Inverstors.com:
President Obama intends to close “persistent gaps” between whites and minorities in everything from credit scores and homeownership to test scores and graduation rates.
His remedy — short of new affirmative-action legislation — is to sue financial companies, schools and employers based on “disparate impact” complaints — a stealthy way to achieve racial preferences, opposed 2 to 1 by Americans
Under this broad interpretation of civil-rights law, virtually any organization can be held liable for race bias if it maintains a policy that negatively impacts one racial group more than another — even if it has no racist motive and applies the policy evenly across all groups.
Total racial outcomes will be the goal. Think of it as a 21st century version of the principle, “From each according to his ability, to each according to his need.”
So far, three banking giants have buckled under the pressure. Bank of America, Wells Fargo and SunTrust have all agreed to modify their lending practices to make them more “race-friendly.”
At that time, the goal was similar — to provide affordable housing to the poor. However, it had the exact opposite result. As lending practices and requirements were eased, demand shot through the roof, pushing housing prices up to unrealistic levels.
We all know where that led. The housing bubble burst and homeowners were left holding mortgages on upside-down properties they either couldn’t or wouldn’t pay.
These are the consequences of “equal results” over “equal opportunity.” It’s deja vu all over again.
Read the full report in Investors.com.