Old remarks from Michael Bloomberg during the 2008 financial crisis on redlining are recirculating and they are as bad as you could think. At a forum at Georgetown University, then-Mayor Bloomberg decided to blame the root of the financial crisis on, of all things, the outlawing of the racist practice of “redlining.”
To avoid any assertion that we are quoting Bloombito out of context, here are his remarks directly after being asked about “the root causes” of the crisis:
It all started back when there was a lot of pressure on banks to make loans to everyone. Redlining, if you remember, was the term where banks took whole neighborhoods and said, "People in these neighborhoods are poor, they’re not going to be able to pay off their mortgages, tell your salesmen don’t go into those areas." And then Congress got involved―local elected officials, as well―and said, "Oh that’s not fair, these people should be able to get credit." And once you started pushing in that direction, banks started making more and more loans where the credit of the person buying the house wasn’t as good as you would like.
Please note: This is not the definition of redlining. The term denotes the systematic practice of lenders denying services to people in a residential area because of its racial composition, not their creditworthiness. Redlining was banned in order to end this racist practice and give Black and Latinx people equal access to homes—and its effects are still hurting minorities today. Here’s a more clear definition of the practice from Investopedia:
Redlining is an unethical practice that puts services (financial and otherwise) out of reach for residents of certain areas based on race or ethnicity. It can be seen in the systematic denial of mortgages, insurance, loans, and other financial services based on location (and that area’s default history) rather than an individual’s qualifications and creditworthiness. Notably, the policy of redlining is felt the most by residents of minority neighborhoods.
Defending Bloomberg’s remarks, spokesperson Stu Loeser told the Associated Press that the rich man seemingly trying to buy the 2020 presidential election was simply “saying that something bad—the financial crisis —followed something good, which is the fight against redlining that he was part of as Mayor.”
But that is not what he said. Bloomberg blamed the financial crisis on the reversal of an extremely discriminatory practice that attempted to give black and brown people equal access to homes. Not only is that a wholly inaccurate interpretation of the housing crisis’ root causes, it’s insidious. And that’s just classic Bloomberg.
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