The Foreclosure Document Mess: Cloward, Piven, and Their President Are Surely Pleased
But what the left attempted with welfare is not the only potential application of what has become known as the "Cloward-Piven strategy." Succinctly stated by David Horowitz, it is all about:
... forcing political change through orchestrated crisis. ... (It) seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.
The strategy's filthy fingerprints are all over housing and mortgage lending, in at least these forms:
- The Community Reinvestment Act and its amendments, which enabled "community organizations" to force banks to make imprudent loans as a condition of getting regulatory approval of mergers, acquisitions, and other corporate actions.
- The explosive growth of Fannie Mae and Freddie Mac (Fan and Fred), and the quiet de facto government takeover of the mortgage loan approval process that accompanied it.
- Once they had commandeered the approval process, the deliberate loosening of lending standards at Fan and Fred, which enabled throngs of undeserving applicants to buy houses they couldn't afford.
- As detailed by Peter Wallison and based on work by Edward Pinto, Fan and Fred's 15-year campaign of fraudulently overstating the quality of loans in the mortgage-backed securities they issued. In December 2009, Wallison wrote: "... because of Fannie and Freddie's mislabeling, there were millions more high-risk loans outstanding. That meant default rates as well as the actual losses after foreclosure were going to be outside all prior experience."
If the system isn't already overwhelmed, it's awfully close. This Cloward-Piven attempt is working. Here's a sign of how much "progress" has been made:
Potential paperwork errors on some of the $1.34 trillion of securitized home mortgages may give investors an opening to challenge the legality of deals, threatening to unnerve financial markets. .... [Q]uestions about the ownership of the loans ... may allow investors to force lenders to buy back the securities.
Guess who issued a huge percentage of these mortgage-backed securities, and has hundreds of billions more in underwater mortgages sitting on their books? That's right, Fan and Fred, who "just so happen" to have a promise of relief without limits from the Obama Treasury Department.
Unlike their twentieth century failure with welfare, this time the left's goal of "pushing society into crisis and economic collapse" appears to be within their grasp -- and the person who James Simpson described as "the Cloward-Piven candidate" in his brilliant September 2008 American Thinker column ("Barack Obama and the Strategy of Manufactured Crisis") is now president of the United States. This is a man, as Stanley Kurtz recently noted at National Review, whose now-demonstrated socialist belief system "is still very much alive in the governing philosophy and long-term political strategy" of his administration. What basis is there for believing that Obama would not welcome a collapse while pretending otherwise?
The foreclosure mess is so pervasive that I don't see how anyone can be comfortable making a prediction as to where it's heading. From their outposts in the afterlife (a fiery one, I suspect) and New York, respectively, Mr. Cloward and Ms. Piven are probably quite pleased with developments thus far. Whether they ultimately get their way heavily depends on November's election results, aggressive post-election action to restore constitutional governance, and lots of prayer for those who must deal with this.