Updated: Aug 28, 2018
In 2008, the massive housing bubble collapsed due to Wall Street’s manipulating of markets and government, as well as a whole lot of old-fashioned fraud. The result for working-class Americans: millions of homes lost to foreclosure, millions more underwater. Now one would think that the government agencies assigned to dealing with housing, principally the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) would have been all over this massive crisis, and done everything they could do to help the homeowners who were devastated by these events. Instead, they have acted much more in Wall Street’s favor. In fact, in the last two Distressed Housing Asset Pools, 98% of the sales have gone to the same Wall Street players that helped to cause the crisis in the first place, continuing a deeply disturbing long-term trend.
Not surprisingly, there has been a lot of protest on this, with organizations and members of Congress working for years to convince HUD and FHFA to make reforms in distressed housing policy that benefit working class people instead of Wall Street. This week, there was yet another letter from the coalition of groups that care about these issues to HUD Secretary Julián Castro. But in the cynical, twisted world of Washington politics, this letter sparked a controversy — not a controversy about the substance, mind you, but one about whether Castro should be attacked at all since he is on Hillary’s vice presidential nomination short list, and because he is a Latino. This controversy reminds me of classic political campaign tactics, where if your opponent attacks you on something you are vulnerable on, instead of answering the substance of the attack, you try to change the subject with your own attack on an entirely different issue.
One of the organizations whose board I chair, American Family Voices, has been in the coalition working for years on these issues, and we co-signed that letter about HUD’s Wall Street-oriented policies. We were ensnared in this controversy, as a Latino board member who wants Castro to be the VP nominee resigned from our board, and shared his resignation letter, as well as some private e-mail dialogue between me and him, with Buzzfeed.
Buzzfeed was an interesting choice. When you search the site for substantive stories on Distressed Asset Stabilization Program, the particular program in question, “Distressed Asset Stabilization Program ” you get this result: Nothing. The site has never written a single word about the issue.
My former board member, Joe Velasquez — who, in spite of our disagreement on this subject, I have great admiration, affection, and respect for — wrote in his resignation letter that “Julián Castro was born a progressive and he knows social injustice firsthand.” I have heard from a number of other friends that Castro is a strong progressive, and while I’m not familiar with his overall political record or philosophy, I understand that he was a leader on some important issues while mayor of San Antonio. He may well be a wonderfully progressive person in general. Were he to be nominated and elected, I certainly hope all these views are right and that he would be a strong progressive vice president. Personally, I strongly support having a person of color on the Democratic ticket, because I think it is the right thing to do both morally and politically. But I also want anyone on the ticket to have a strong track record on progressive policy.
What the cynics aren’t getting is that this letter was never an attack on him personally, an attack on his broader record as a progressive, or an indirect way to play VP politics. It is about HUD’s track record of playing footsie with Wall Street in terms of distressed housing. And however great Secretary Castro is on those other issues, this track record sure isn’t great.
And I’m not the one who came up with that analysis. Forty-five members of the House (22 of them people of color) sent a critical letter to Secretary Castro and FHFA Director Watt on this issue . Elizabeth Warren has spoken out strongly on the issue, as has Congressional Progressive Caucus Co-Chair Raul Grijalva. The New York Times wrote this on the subject and The American Prospect here. And there have been literally years of scrappy organizing on these issues by housing, community, and online groups.
And you know what is revealing? None of the pushback on our criticism of Castro’s housing policy is saying anything about how or why the coalition of groups that signed this letter are wrong. His defenders are saying we should not criticize Julián Castro because he is Latino; that any criticism of him is wrong. In Joe Velasquez’s words, “an attack on him is an attack on the Latino community.” Well, the seven Latino members of Congress who co-signed that critical letter to Castro and Watt don’t think that. Latino blogger Markos Moulitsas doesn’t think so. Presente.org, the biggest Latino online organization in the country, doesn’t think so. The thousands of Latino leaders and members of the big community organizations Alliance of Californians and New York Communities for Change don’t think so.
This is not a political attack concocted by some white people who, for nefarious reasons unknown, don’t want a Latino vice president. This is valid, substantive criticism that organizations deeply involved with communities of color and members of Congress, many of whom are also people of color, have been making for years — because distressed housing policy heavily impacts communities of color. Housing and financial policy have had an enormous impact on tens of millions of working class homeowners and, because of foreclosures, former homeowners. This is one of the central economic issues of our time for poor and working-class people of all colors, and it is truly striking that none of the defenders of Castro have even tried to defend him on the substance of our criticism. Maybe that’s because HUD’s policy is indefensible.
In light of this letter, there are now rumors that HUD may be making some reforms in its distressed housing policy. Let’s hope that all these Castro defenders that say he is a great progressive are right, and that he makes the changes in policy that would put him on the side of Latino, African-American, and other working class people rather than on the side of Wall Street. If Secretary Castro does this, no one will become a bigger fan of him than me. In the meantime, all the diverse progressives cited above will keep talking about good housing policy no matter who the HUD secretary might be.
So to Joe Velasquez and other Latino leaders who passionately want a Latino on the ticket, and see Julián Castro as their best hope, I get where you are coming from and I’m sorry you are upset. But a policy siding with Wall Street over working class Latinos, African-Americans, and other Americans is wrong, and it should be changed. And the groups who care about these issues are not backing down on this issue.