Government Built That! (How Government Policy Created Black Ghettos)
At NPR's Fresh Air, Terry Gross interviews Economic Policy Institute research associate Richard Rothstein, who studies the history of residential segregation in America.
"We have a myth today that the ghettos in metropolitan areas around the country are what the Supreme Court calls 'de-facto' -- just the accident of the fact that people have not enough income to move into middle class neighborhoods or because real estate agents steered black and white families to different neighborhoods or because there was white flight," Rothstein tells Fresh Air's Terry Gross."It was not the unintended effect of benign policies," he says. "It was an explicit, racially purposeful policy that was pursued at all levels of government, and that's the reason we have these ghettos today and we are reaping the fruits of those policies."
Some of the highlights from the interview:
On how the New Deal's Public Works Administration led to the creation of segregated ghettosIts policy was that public housing could be used only to house people of the same race as the neighborhood in which it was located, but, in fact, most of the public housing that was built in the early years was built in integrated neighborhoods, which they razed and then built segregated public housing in those neighborhoods. So public housing created racial segregation where none existed before. That was one of the chief policies.
On the Federal Housing Administration's overtly racist policies in the 1930s, '40s and '50s
The second policy, which was probably even more effective in segregating metropolitan areas, was the Federal Housing Administration, which financed mass production builders of subdivisions starting in the '30s and then going on to the '40s and '50s in which those mass production builders, places like Levittown [New York] for example, and Nassau County in New York and in every metropolitan area in the country, the Federal Housing Administration gave builders like Levitt concessionary loans through banks because they guaranteed loans at lower interest rates for banks that the developers could use to build these subdivisions on the condition that no homes in those subdivisions be sold to African-Americans.
Related: How welfare ruined the black family.
via Reason Foundation's Manny Klausner
I saw that yesterday and it's a pretty good analysis. It should not be forgottent that FDR, for all of his leftist tendencies, was not willing to rock the boat on segregation. The main issue I have with Gross' analysis, as Amy hints in the last sentence, is that it discounts the effects of welfare. Democrats in the '60s pushed hard on urban black women to accept welfare, becuase they saw them as a constituiency that could be "locked in". (And they were right.)
Cousin Dave at May 22, 2015 6:24 AM
Speculators, Politicians, and Financial Disasters
11/10/08 - WSJ.com from Commentary by John Steele Gordon
How Washington created a financial panic in 1836 and 2008.
( search for Community Reinvestment Act )
In the US, people hate the banks and "Wall Street" for being bigots. They supposedly refused mortgages and loans to deserving members of minorities merely for living in low-income neighborhoods. This has been political proof that business is bigotted, even if this goes against their rational self interest to make loans to creditworthy people.
What is not usually known. In 1934 the US Government created "redlining" as a quick, bureaucratic way to assess risk. Always look to the government for intelligent, nuanced decisions.
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[edited] Historically there was also a class for whom home ownership was out of reach, made up mostly of American blacks. Simple racial prejudice had long been a factor here, but ironically, the New Deal institutionalized discrimination against blacks seeking mortgages.
The Federal Housing Administration was established in 1934 to insure home mortgages. The Home Owner's Loan Corporation was another New Deal agency created to help prevent foreclosures.
In 1935, the FHA asked the HOLC to draw maps of residential areas according to the risk of lending in them. Affluent suburbs were outlined in blue, less desirable areas in yellow, and the least desirable in red.
The FHA used the maps to decide whether or not to insure a mortgage, which in turn caused banks to avoid the redlined neighborhoods. These tended to be in the inner city and to comprise largely black populations. As most blacks at this time were unable to buy in white neighborhoods, the effect of redlining was largely to exclude even affluent blacks from the mortgage market.
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Andrew_M_Garland at May 23, 2015 2:50 PM
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