The New York Times editorial board remains steadfastly determined to bar reality from ruining its thoroughly discredited world view. In this editorial, the NYT’s editors blame racism for favored minorities defaulting on their home mortgages.

The editors allege that minorities were charged more for their mortgages, had high-risk mortgages foisted upon them by unscrupulous brokers, and, as a result, suffered disproportionately when the housing market crapped the bed.

The editors’ preferred remedy is class action suits against lenders, brokers and servicers, instituted by the Department of Justice. These suits would be rise from claimed violations of relevant fair lending laws, proven almost exclusively through a disparate impact analysis.

For those of you who aren’t attorneys, disparate impact analysis is the legal theory by which correlation equals causation. Put another way, the plural of anecdote is data. That is, if a whole bunch of Blacks are suffering defaults and foreclosures, the cause must be racism, unless the banks can prove it’s not.

Disparate impact analysis is the civil law equivalent of guilty until proven innocent. A grievance mill like the Rev. Jesse Jackson’s thuggish Rainbow/PUSH coalition need only assemble a group of minorities willing to allege their foreclosure resulted not because they sucked inflated equity out of their houses to buy flat screen TVs and posh new cars, but rather because unsavory banks suckered them with high cost loans. Once this occurs, banks have to show that no, the banks made rational, unbiased decisions to lend these folks money on their homes.

‘Puter’s more than passingly familiar with bad commercial loans, many secured by mortgages on primary residences. See, ‘Puter’s company purchases bad commercial debt from lenders in the secondary market. So, in the course of ‘Puter’s many years of looking at these loans, he has a fairly good sense of the industry.

Here’s ‘Puter’s take.

1. Banks no longer discriminate on the basis of race. They don’t give two figs what color your skin is, or where you come from. Hell, they don’t care if you want the money to open up a donkey show in Tijuana, so long as your projections cash flow well. The only color banks care about is green, the color of the money you will be repaying them.

2. Laws such as the Community Reinvestment Act, and to a lesser extent the Equal Credit Opportunity Act et al., have forced banks to make loans to bad credit risks to avoid the type of mule fritter charges the NYT now wants to punish banks with again. But this time, banks will get screwed for following the rules.

3. Banks, brokers and servicers got greedy during the housing bubble. They lent into what in retrospect were really crappy deals. It’s apparent to everyone now that interest only loans and no documentation originations were really-and-for-true horrible ideas. But there are two sides to every story. On the other side of this story were greedy homeowners happy to take the (they though) free money, paying it back when they unloaded their ever-appreciating home. The borrowers are equally, if not more to blame. The banks are getting punished by taking massive losses. Borrowers should be forced to face their justly deserved pain as well. Otherwise, we get moral hazard. Hypothetically, moral hazard would occur if the federal government were to ignore bankruptcy law, cramming down bondholders to benefit unsecured union pension funds. What?!? That happened?!?! Then you already get the concept.

4. Minorities are disproportionately represented in the lower classes already. Is it really so far-fetched an idea that to compensate for associated risk, minorities would pay higher fees and interest rates? ‘Puter’s further betting that the collateral for many of these so-called unfair loans was in run-down, inner city neighborhoods. Again, these are areas where minorities tend to be disproportionately represented. Disparate impact analysis ignores this equally plausible (and in ‘Puter’s experience, correct) explanation for increased costs and fees to minorities. But thanks to disparate impact analysis, all minorities have to do is go to court claiming that there’s a whole bunch of us who defaulted on our loans and are being foreclosed. The burden then shifts to banks to explain themselves.

The NYT’s argument is akin to blaming the Border Patrol for rounding up an unusually high number of Mexican nationals on immigration charges. Reality is, Mexicans make up an unusually high percentage of illegal aliens. Pretending there’s some sort of covert racism at work is, quite simply, wishful thinking.

5. ‘Puter has not seen more than a handful of stories where actual advantage taking or forgery of loan documents has been alleged, much less proven. The likelihood that now, three years after our economy almost went tits up, the NYT has stumbled across a heretofore undiscovered trove of wronged minorities is about as credible as Piltdown Man and Bigfoot getting married and having Loch Ness Monster babies (“I need about tree-fitty.”).

Here is the uncomfortable truth, at least for the race-obsessed NYT editors. Banks used to discriminate against minorities. The federal government stepped in and made banks cut the shenanigans, imposing steep fines through overregulation. As a result, banks not only lent to minorities, but made horrifically stupid loans to minorities in overcompensation. Minorities, as disproportionate recipients of foolish loans that never should have been made in the first instance, were disproportionately affected when the economy tanked. It’s as simple as that.

There is no grand conspiracy here by Whitey T. Mann and his evil, cackling henchmen to re-enslave Blacks. There were simply a bunch of stupid, greedy people on both sides of a mutually agreeable (at inception) transaction that later tanked. And both sides, no matter their race, should suffer the consequences of their rash behavior.

To do otherwise is to succumb to the soft bigotry of low expectations. But ‘Puter expects no less from the NYT.

'Puter

Always right, unless he isn’t, the infallible Ghettoputer F. X. Gormogons claims to be an in-law of the Volgi, although no one really believes this.

’Puter carefully follows economic and financial trends, legal affairs, and serves as the Gormogons’ financial and legal advisor. He successfully defended us against a lawsuit from a liquor distributor worth hundreds of thousands of dollars in unpaid deliveries of bootleg shandies.

The Geep has an IQ so high it is untestable and attempts to measure it have resulted in dangerously unstable results as well as injuries to researchers. Coincidentally, he publishes intelligence tests as a side gig.

His sarcasm is so highly developed it borders on the psychic, and he is often able to insult a person even before meeting them. ’Puter enjoys hunting small game with 000 slugs and punt guns, correcting homilies in real time at Mass, and undermining unions. ’Puter likes to wear a hockey mask and carry an axe into public campgrounds, where he bursts into people’s tents and screams. As you might expect, he has been shot several times but remains completely undeterred.

He assures us that his obsessive fawning over news stories involving women teachers sleeping with young students is not Freudian in any way, although he admits something similar once happened to him. Uniquely, ’Puter is unable to speak, read, or write Russian, but he is able to sing it fluently.

Geep joined the order in the mid-1980s. He arrived at the Castle door with dozens of steamer trunks and an inarticulate hissing creature of astonishingly low intelligence he calls “Sleestak.” Ghettoputer appears to make his wishes known to Sleestak, although no one is sure whether this is the result of complex sign language, expert body posture reading, or simply beating Sleestak with a rubber mallet.

‘Puter suggests the Czar suck it.