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No one talks about it, no one appears to have connected the dots...but now in retrospect it is clear that the single biggest event that caused the real estate debacle was the nationwide increase in immigration raids by ICE (Immigration and Customs Enforcement) Agents from the DHS (Department of Homeland Security).
The raids were dispersed, but very effective. A small town in
I ran a quick analysis in Google News trends, looking at the correlation between Immigration Raids and Housing Foreclosures. After several years of relative peace, in May 2008, the raids begin in earnest and are captured as News Items. And there are upticks on raids going forward right up to November 2008. There is a clear connection.
Not coincidentally, there is a serious uptick in the national foreclosure rate within months right after the raids start happening. An already soft real estate market is suddenly decimated and thrown over a cliff, with months after the raids started.
Once again the Bush administration undertook a task without thinking about the long-term consequences of their actions...and the real costs for our economy.
For sure, there had been a serious increase in the number of illegal immigrants these past 8 years. Immigrants, among other needs, required housing. And feeding on the real estate boom...the construction industry was employing a large number of these additional illegal immigrants working in non-agricultural jobs.
We were led to believe that serious immigration reform was imminent. And in fact, many immigrants were staying in the
Then suddenly, out of nowhere, there were increased workplace raids which resulted in mass deportations. Mass deportations led to mass vacancies. Mass vacancies led to a slow down in construction activity, and a rise in foreclosures, further leading to a collapse of our banking system, causing a deep recession, further unemployment, etc.
It clear, that the Real Estate bubble was unsustainable. And it is also clear that there were severe irregularities in loan reviews. But, the straw that broke the camel's back was these immigration raids. It was the wrong move, at the wrong time.
It is estimated that several Million immigrants have now returned home to
It is absolutely clear that this exodus was intended by our federal government. It is true that reform of our nation's broken health care systems and other social systems require an absolute minimization of residents without legal status. But if suddenly, a big chunk of US consumers and tenants disappear, and demand diminishes the ripple effects of this exodus will unavoidably hit Wall Street, construction, banking, home sales, auto sales, you name it. Fortunately or unfortunately, everything in our economy is connected to everything else.
Ironically, some of the most anti-immigrant, most racist folks in
Also, ironically, in the long run the United States will need all these immigrants back, because 80 Million Americans are retiring in the next 20 years and there will simply NOT be a large enough labor pool to pay into the US treasury to support future retirement and Medicare claims. There is only 40 Million American below the age of 20.
In the end, it seems, the Bush administration's aggressive immigration enforcement policy appears to have been a short-sided, simplistic approach to a very complex issue...with devastating short-term and long-term consequences to the
Try to explain how simplistic and short-sided the Bush administration's approach has been to the 300,000+ Iraqi dead civilians' families impacted by the Iraq war or the 3000+ American families who lost their most treasured sons and daughters in the same war ...and I am sure they'll get it.
Decisions have consequences. I sincerely hope Obama Administration is wiser and more compassionate. Sonia Sotomayor's nomination appears to be a signal that Mr. Obama gets it. He seems to understand and appreciate the immense value of the Hispanic community's contribution to the country's past, present and future.
