Tag: Wall Street Journal

Just Hanging on the Hacienda

As we all know, Hispanic culture has contributed much to the United States. A quick glance at the artistic, political, and social makeup of the nation confirms that Latinos are prime instigators when it comes to plotting the direction of the country.

Many of our new values have their roots in Latin America. However, there is one concept from the old world that should not be welcome here. Ironically, it is U.S. powerbrokers — people unlikely to be Latino — who are most clamoring for it to gain a foothold in this country.

I’m talking about the encomienda system, which hasn’t formally existed for hundreds of years, but which has never really gone away. Briefly, the encomienda system was set up by the Spanish Conquistadors, who divided Latin America among themselves. An encomienda was a land grant that gave a Spaniard property rights over Indian labor. Basically, the conquistador got a hacienda and indentured servants to make him rich.

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Guess Who Will Save Us Now

We’ve never been more obsessed with bottoming out.

Every day brings a fresh prayer that the economy has gotten has bad as its going to get – not only for this recession but for the rest of our lives – and a fervent, dry-mouthed wish that tomorrow will see prosperity’s inevitable return. But so far, all that praying has been as useful as a cowboy hat on a toad (as my father-in-law would say).

The gasping economy has hit Latinos particularly hard. Up until a few months ago, we Hispanics had been making great strides toward economic equality. The day when Latinos were no longer assumed to be members of the lower class was fast approaching. But then the chasm opened up on the capitalist freeway, and Latinos hit the brakes with both feet.

Currently, we’re more likely than any other group to lose our homes, and we’re more likely than most to be unemployed. Hispanic Business reports that “by the end of 2008 the general Hispanic jobless rate had spiked at 9.2 percent, almost 2 percent higher than the rate for the entire U.S. population.” The overall rate is now closing in on 9%, and one presumes that Latinos will continue to lead the dismal pack. Hispanic males, in particular, are stuck with an ungodly 11% unemployment rate.

Furthermore, the Pew Hispanic Center notes that “76% of Latinos, and 84% of foreign-born Latinos, say their current personal finances are in either fair or poor shape, while 63% of the general U.S. population says the same.”

So as bad as it is for America right now, it’s even worse for Latinos. And as I indicated in a previous post, there’s the extra indignity that Hispanics are subtly being blamed for this mess. 

Many discussions of the subprime mortgage fiasco – the catalyst for this chaos – include the insinuation that too many Hispanics bought too many houses that they couldn’t afford.

Of course, many Americans will be delighted that our anorexic economy has stemmed the flow of illegal immigrants. After all, given the choice between being poor in their native country or being poor in the United States, a lot of potential immigrants will skip the border crossing and opt for poverty at home. Hell, many immigrants are actually moving back, which might cause some conservatives to rejoice, even as a dark thought crosses the right-wing mind: The USA is simply not so attractive anymore. 

So is there any good news in this flood of pessimism? Well, some reports indicate that the group hitting bottom the quickest may be the very same one that jumpstarts the economy. Yes, Latinos are the potential salvation to this financial cataclysm.

A remarkably optimistic article from MSNBC claims that Hispanics “remain a thriving, even booming, market that’s expected to grow by 48 percent in the next four years.”

The report goes on the say that “marketers now see that the Hispanic market in the U.S. is a great business opportunity” and that “businesses and cultural institutions… are chasing Hispanics aggressively, because that’s where the money is.” Hispanic Business adds that “Hispanics will likely supply valuable labor and sustain the U.S. economy far into the 21st century.”

Well, that’s more like it.

There are several reasons for our newfound clout. For starters, we tend to be younger than other demographics and thus eager to spend money on fun non-essentials such as downloading ringtones or hitting the movies. Another reason is that the strong focus on the family (Latinos tend to have more children) means that we’re signing more credit-card receipts for baby carseats and the like. Finally, there are just a whole bunch of us, and as I’m sure you know, we’re now the largest minority in America.

We Latinos apparently sense our potential for helping out the nation. The Pew Hispanic Center reports that, despite the fact that the economic disaster has hit us harder, “Latinos are more optimistic than others about the future: 67% expect that their financial circumstances will improve over the next year; just 56% of the general population feels the same way.”

Perhaps our optimism comes from the same drive that fuels so many of us to take a chance on a new life in a new country. Maybe the traditionally strong spiritual base that many of us possess helps to guide us through troubled times. Or maybe we’re just used to having less and don’t get worried about losing things. In any case, we seem poised to stimulate the economy.

If that’s true, however, what is a social conservative to do? Latinos have been attacked as scourges on the economy for so long that it’s cultural whiplash to claim that now America really, really, really needs us. The irony is rich, even if the country is not.

As a result of this new status, perhaps young Latinos wandering around stores will no longer be tailed by suspicious proprietors who assume that any group of Hispanics are there to empty the cash register and pistol-whip the owner. Maybe these young  people will be recognized for who there are and what they represent: the very salvation of the global economy.

That would be so damn cool.

Mi Casa Es Su Casa… Until the Bank Forecloses on Mi Casa

My wise old grandmother used to invoke the Spanish phrase, “When money is tight, a nickel isn’t worth a dime.”

Actually, that’s not a phrase in Spanish (I think it’s Yogi Berra). And my grandmother has never passed along anything resembling sage-like insight. She’s much more likely to complain that young people don’t wear enough clothes.

The point is that we Latinos don’t have any special wisdom for dealing with this economic disaster, which has become (say it with me) the worst crisis since the Great Depression. In fact, the statistics indicate that Hispanics are ill-suited to weather this financial maelstrom.

Looking at one specific economic indicator, the almost laughably bad housing market, we see that Latinos have the highest foreclosure rate of any ethnic group in the country, according to the Pew Hispanic Center. In addition, Latinos tend to spend more of their income on housing than other demographics do, and we are more likely to have firsthand experience with the horrific phrase “subprime mortgage,” which has supplanted “Bush-Cheney administration” as the scariest word combo in America.

The Pew Hispanic Center goes on to say that over a third of all Hispanic homeowners are worried that their house may go into foreclosure, and that over half of foreign-born Latino homeowners share this fear. The Wall Street Journal adds that “In U.S. counties where Hispanics account for more than 25% of the population, banks have taken back 6.7 homes per 1,000 residents since Jan. 1, 2006, compared with 4.6 per 1,000 residents in all counties.”

Of course, the collapse of the housing market has become the prominent symbol, main indicator, and root cause/boogyman for the financial shitstorm raining down upon the nation. As a Latino who bought a house near the peak of the boom (my first house, thank you very much), I was surprised to learn that my home has dropped little in value since I signed on the dotted line. Nevertheless, at this point, I’m calling for a cyber show of hands from all those who miss their old apartments.

In any case, besides carrying the brunt of the economic blowback, Hispanics also have the burden of getting blamed for this mess. That same Wall Street Journal article points out that “in 2005 alone, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%.” The article goes on to present statistical and anecdotal evidence that Latinos, more than other groups, got in way over their heads with houses they had no hopes of affording. They then apparently dragged down the market in several regions by indulging in their pesky habit of getting foreclosed on.

To its credit, the Wall Street Journal does not explicitly claim that too many Latinos buying too many houses caused the market to collapse. After all, doing so would be both morally dubious and an extremely shaky economic hypothesis. But some obvious questions arise.

Who was soliciting all those optimistic dreamers, who were often less educated individuals or recent immigrants unclear on the concepts of their new country’s system? Who thrust documents at people who had been fed the American Dream, telling them that despite their rational hesitations, everything was going to be fine because trained professionals said that they could afford the house? More specifically, who marketed housing materials in Spanish, then performed the closing in English?

The answer ranges from sixth-generation Americans with a lot of money to Latino politicians trying to score some cheap points. Of course, some flat-out greedy Hispanic homeowners share the blame. But the bottom line is that Hispanics, as a group, are more likely to be kicked to the curb (possibly in a literal sense) because of system-wide epic stupidity engineered by people who should have known better.

The details of the Obama plan to help homeowners are still being worked out, so it remains to be seen if more Latinos can hold on to their houses. The only thing we know for certain is that once this plunge bottoms out – and it will eventually – many Hispanics will hesitate before applying for mortgages. They will wonder if they once again being lied to, and they may decide that the ideal of owning a home is some absurd fantasy that they would be better off ignoring.

How can that possibly be good for them, or for America?

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