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.