It portrays four minorities celebrating in a house full of cash with the headline, “The Great American Housing Rebound: Flips. No-look bids. 300 percent returns. What could possibly go wrong?”
The implication: Irresponsible African-Americans and other minorities, in their greed, helped create the housing crisis.
“… we still can’t decide what’s most offensive about it: the caricature of the busty, sassy Latina, the barefooted black man waving cash out his window, that woman in the upstairs left-hand corner who looks about as dim-witted as her dog,” wrote Emily Badger of the Atlantic.
Of course, the idea that irresponsible African-Americans created the housing crisis has been a conservative theme for years. Minorities bought houses that they knew they couldn’t afford. The US government, they also argue, forced Fannie Mae and Freddie Mac to guarantee mortgages for low and moderate income borrowers, borrowers who should have never been given mortgages in the first place.
Never mind the role that unscrupulous lenders, dishonest mortgage brokers, over-leveraged flip artists, and large banks which securitized high risk mortgages and sold them off as safe investments played in the housing collapse.
As The Atlantic noted, “Bloomberg Businessweek’s racist cover also gets the housing crisis backwards.”
Rather than causing the housing crisis, minorities were more often victims in the crisis. Minority borrowers were frequently steered toward devastating sub-prime loans, even when their credit would have qualified them for conventional mortgages, increasing their likelihood of defaulting.
According to the Center for Responsible Lending, African-Americans with good credit scores were not only more likely to be offered high-risk sub-prime mortgages, but once they fell behind on mortgage payments they were foreclosed on at rates twice as high as white borrowers. The Center estimates a minimum of $194 billion in wealth has been wiped out from black communities as a result of mortgage foreclosures.
Many of the culprits have been sued or are in the process of being taken to court for their intentional targeting of minorities during the housing boom and subsequent collapse. Bank of America, for instance, agreed to pay $335 million dollars to settle allegations that it’s Countrywide Financial unit discriminated against minority home buyers.
What is especially troubling is not only how the cover seems to have gotten the facts wrong, but how such a negative depiction of minorities got through the editing process in the first place.
Businessweek for their part explained that the illustration was created by Andres Guzman, a freelance artist born in Peru but now living in the US. According to the Columbia Journalism Review Guzman claimed that, “The assignment was an illustration about housing. I simply drew the family like that because those are the kind of families I know. I am Latino and grew up around plenty of mixed families.”
Yet, the fact that the illustrator was of Latino heritage in no way excuses the lack of editorial oversight by Bloomberg Businessweek.
BMWK — What’s your take? Do you think the cover was blatantly racist or just an editorial oversight?