Tax cuts for rich yet to yield jobs

Regarding the letter, “Decrying the rich is biting the hand”: The practice called “redlining” began with the National Housing Act of 1934, which established the Federal Housing Administration. Racial segregation and discrimination pre-existed this policy. In 1935, the Federal Home Loan Bank Board asked Home Owners’ Loan Corporation to look at 239 cities and create “residential security maps.” Recent research has indicated that the HOLC did not redline in its own lending activities, and that the racist language reflected the bias of the private sector and experts hired to conduct the appraisals.

In the United States, the Fair Housing Act of 1968 was passed to fight the practice. It prohibited redlining when criteria are based on race, religion, gender, familial status, disability, or ethnic origin. The Office of Fair Housing and Equal Opportunity was tasked with administering and enforcing this law. Anyone who suspects that their neighborhood has been redlined is able to file a housing discrimination complaint. The Community Reinvestment Act of 1977 further required banks to apply the same lending criteria in all communities.

As for the repeal of the Glass Steagall Act, that fight began in the ’80s because the European banks had already repealed their versions of the act, and our banks said they couldn’t compete. In 2008, leaders of the Group of 20 cited the following causes:

During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

In other words, massive deregulation pushed by the Bush Administration and the Republican Congress along with good, old-fashioned greed is what gave us the great recession of 2008. Since 2001, the rich have had huge tax breaks which were supposed to come back to the middle class in the form of jobs. It’s been 12 years. Where are the jobs?

Tom Griffin

Everett

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