By William K. Black
Hans-Olaf Henkel was one of the primary German architects of the global financial crisis in his capacity as leader of the association that lobbied on behalf of Germany’s large businesses. He has written recently that a number of the CEOs running those businesses should be placed in a “Halle der Schande” (Hall of Shame). One hopes that he will find his continued association with them congenial when he his given the most prominent pedestal in that Hall.
Herr Henkel was the leading German business proponent of deregulation and the executive compensation systems that drove the global crisis. He brought a special passion to denouncing German tendencies toward social equality and the resulting cultural limitations on executive compensation. The government and equality were the twin evils and when the government sought to increase equality the combination was Henkel’s ultimate nightmare. It was certain, therefore, that he would blame the global crisis on government efforts to reduce discrimination against working class, particularly minority, Americans. It was equally certain that he would be enraged when Professor Galbraith refuted this claim
. Herr Henkel replied:
Mr. Galbraith should familiarize himself Jimmy Carter’s “Housing and Community Development Act” where in Section VIII Banks were prohibited the practice of “red lining” which until then enabled them to distinguish “better living quarters” and “slums.”
It is not common to read nostalgia about the good old racist days when the government (the FHA) and businesses worked together to prevent loans from being made to blacks. Herr Henkel has an interesting concept of causality. His “logic” is that blacks, not the denial of home loans, caused “slums.” Banks, naturally, did not loan to blacks because blacks lived in slums. They drew “red lines” on maps around “slums” where they would not lend. Then came what Herr Henkel terms the “do-goodism” among politicians that banned the red lining of integrated and black neighborhoods (aka, “slums” in Henkel’s world view). The Fair Housing Act of 1968 (passed under President Johnson) outlawed redlining. Under Henkel’s “logic” it, after over a 30-year latency period, caused the global financial crisis. Black borrowers (“slum” dwellers all) destroyed the global economy. And Jews caused Germany to lose World War I by stabbing it in the back.
But it gets better. Herr Henkel claims that he is on a mission to fight a blood libel. He is enraged that opponents of the disastrous financial system smear (Verunglimpfen) that system on the basis of the wrongdoing of the CEOs leading our most elite banks. This makes his casual, fact-free, smear of blacks all the more appalling and hypocritical.