“Those Bad Things Are Gone Now”: How The Supreme Court Is About To Explode America’s Racial Wealth Gap
When discussing race, the conservative argument is best expressed by the famous words of Chief Justice John Roberts: “The best way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” Translation: America has done bad things in its history, but those bad things are gone now, so we should move past those horrors and look forward.
Conservatives believe that if blacks and Latinos simply work hard, get a good education and earn a good income, historical racial wealth gaps will disappear. The problem is that this sentiment ignores the ways that race continues to affect Americans today. A new report from Demos and Brandeis University, “The Racial Wealth Gap: Why Policy Matters,” makes this point strongly. The report shows that focusing on education alone will do little to reduce racial wealth gaps for households at the median, and that the Supreme Court, through upcoming decisions, could soon make the wealth gap explode.
Wealth is the whole of an individual’s accumulated assets, not the amount of money they make each year. As such, in his recent book, “The Son Also Rises,” Gregory Clark finds that the residual benefits of wealth remain for 10 to 15 generations. To understand why that matters, consider the fact that Loretta Lynch, Obama’s recent nomination for U.S. attorney general, is the great-great-granddaughter of a slave who escaped to freedom. (That’s four generations). Consider also that most people on Social Security today went to segregated schools. (That’s two generations.) If Clark is correct in his thesis, then the impacts of wealth built on the foundations of American slavery and segregation will continue to affect Lynch’s great-great-great grandchildren.
It is therefore unsurprising that addressing just one aspect of this disparity cannot solve racial wealth gaps. Demos/Brandeis find that equalizing graduation rates would reduce the wealth gap between blacks and whites by 1 percent, and between Latinos and whites by 3 percent at the median. Equalizing the distribution of income would only reduce the wealth gap by 11 percent for blacks and 9 percent for Latinos. Part of the durability of wealth gaps is the disproportionate benefits that whites still enjoy: They face less job market discrimination and are more likely to reap a big inheritance, for example. This means that the returns to education and income are generally higher for whites. But even after controlling for these returns, income and education can’t explain the entire wealth gap.
Because America’s primary vehicle for wealth accumulation is our homes, much of the explanation of the racial wealth gap lies in unequal homeownership rates. According to the Brandeis/Demos analysis, equalizing homeownership would reduce the racial wealth gap by 31 percent for blacks and 28 percent for Latinos. This effect is muted because centuries of discrimination—including racial exclusion from neighborhoods where home values appreciate, redlining, and discriminatory lending practices—mean that people of color are segregated into relatively poor neighborhoods. Indeed, in 1969, civil rights activist John Lewis bought a three-bedroom house for $35,000 in Venetian Hills, Atlanta. He and his wife were the first black family in the middle-class neighborhood. In his book, “Walking with the Wind,” he notes that, “within two years… the white owners began moving out.” Had the value of his house simply kept up with inflation, it would be worth $222,881 today. But Zillow shows that three-bedroom houses in Venetian Hills, Atlanta, are currently selling for around $65,000 to $100,000.
Systematic disinvestment in communities of color means that even when blacks and Latinos own their homes, they are worth far less than white homes. In addition, blacks and Latinos are targets of shady lending. They are more likely to be offered a subprime loan even if they are qualified to receive a better rate. In the wake of the financial crisis, big banks like Blackstone scooped up foreclosed homes and are now offering them to people of color to rent, further pulling wealth out of these communities to benefit rich whites.
The financial crisis had a disparate impact on people of color. A Center for Responsible Lending report examined the loans originated during the subprime boom (2005 to 2008), and found that blacks and Latinos were almost twice as likely to have foreclosed during the crisis. The New York Times reported that Wells Fargo “saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania.” They discovered that loan officers “pushed customers who could have qualified for prime loans into subprime mortgages” and “stated in an affidavit… that employees had referred to blacks as ‘mud people’ and to subprime lending as ‘ghetto loans.’”
These problems are troubling, but, as unlikely as it seems, things are about to get even worse. The Supreme Court is set to decide Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, a landmark case challenging the disparate impact test, which allows a practice to be considered discriminatory if it disproportionately and negatively impacts communities of color, even if a discriminatory intent can’t be proven.
The case involves an excellent example of why disparate impact is so important: Nearly all of the tax credits that the Texas Department of Housing and Community Affairs had approved were in predominantly non-white neighborhoods. At the same time, the department disproportionately denied the claims in white neighborhoods. A federal judge decided that regardless of racial intent, the result had a “disparate impact” and increased neighborhood segregation. As Nikole Hannah-Jones has extensively documented, disparate impact has been crucial in holding banks accountable. For instance, the Justice Department used it to settle with Bank of America for $335 million after it was discovered that a mortgage company purchased by BofA had been pushing blacks and Latinos into subprime loans when a similar white borrower would have qualified for a prime loan. Because there was no official policy that required blacks and Latinos to get worse loans, the case would not have been won but for the disparate-impact statute.
The Supreme Court has already decimated the Voting Rights Act, opening the door for onerous restrictions on voting. They upheld a law banning affirmative action at state universities and have already crushed integration efforts at K-12 schools. Worryingly, as Demos Senior Fellow Ian Haney López told ProPublica, “It is unusual for the Court to agree to hear a case when the law is clearly settled. It’s even more unusual to agree to hear the issue three years in a row.” Given the importance of neighborhood poverty to upward mobility and wealth building, this case had the potential to be the most destructive, dramatically curtailing opportunity and making the wealth gap into a chasm. As Patrick Sharkey notes, “Neighborhood poverty alone accounts for a greater portion of the black-white downward mobility gap than the effects of parental education, occupation, labor force participation, and a range of other family characteristics combined.”
Demos and Brandeis suggest policies to boost homeownership, like better enforcement of anti-discrimination laws, lowering the cap on the mortgage interest deduction so blacks and Latinos can benefit and authorizing Fannie Mae and Freddie Mac to allow homeowners to modify their loans. In addition, America needs to systematically invest in poor neighborhoods. Equalizing public school education funds for poor and nonwhite schools would increase home prices in poor neighborhoods. In addition, a baby bond program would directly reduce wealth gaps by giving children money that could be used for a down payment on a house or an investment in their education. What’s clear is that we cannot simply hope that wealth gaps will disappear. These gaps were created by racially biased federal policies and need to be remedied by public policy as well. Government created the white middle class in the 1950s; now it’s time to create a black and Latino middle class. The Supreme Court, with its supposedly race-neutral philosophy, will only make it more difficult to close racial wealth gaps.
By: Catherine Ruetschlin, a Senior Policy Analyst at Demos & Sean McElwee, Research Assistant at Demo: Salon, March 14, 2015
“Three Legs Of The Conservative Stool”: The ‘War On Women’ Is The Latest War That Republicans At CPAC Want To Win
All political movements, to some extent, sound nonsensical to outsiders because groupthink elides the needs for certain connective thoughts to be voiced aloud. CPAC, a celebration of orthodoxy among a bullet-point-equipped faithful who all try to sound more stridently like everyone else than anyone else, magnifies this tendency to maddening degrees. Two separate subjects are mentioned with the causal relationship omitted. Facts appear without context; good things are named as though good outcomes inevitably eventuate. When cause-and-effect statements appear, they aren’t much better.
By this process, you can arrive at a conclusion like this: To win the War on Women, you better put a ring on it.
At CPAC, conservatives dedicated an entire panel to “The Future of Marriage.” One could be forgiven for assuming it tackled the issue via the sub-topic “Gays, and the Ickiness Thereof,” because that was the default assumption among those attending CPAC as part of an ongoing More Jaded Than Thou contest. Instead, the panel bypassed halting marriage equality and went straight for a return to celebrating a time when women had few stable life opportunities outside of marriage.
Heritage Foundation vice-president Jennifer Marshall signaled the need for conservative candidates to “be indivisible” on the matter of the “very interrelated” three legs of the conservative stool – marriage, small government and a stable economy. What a weird stool. Why these three things? Why not neighborhood bowling leagues, usury and the gibbet?
Marshall answered that question by explaining that “the sexual revolution has made relationships between men and women much more challenging”. Naturally, as polyamory and bed hopping have had very little effect on bowling or usury. Still, it was an important statement to make, because it implied that women had been complicit in the destabilization of their economic security.
Heather MacDonald of the Manhattan Institute – employer of such luminaries as Iraq War stooge Judith Miller, invariably wrong William Kristol and racist hack Charles Murray – was willing to go even further than Marshall in placing the blame for women’s economic travails on alienation from “the family” and then further blaming women’s thoughts for turning women against where they belong.
“Feminists have taken over college campuses. They run the bureaucracy. People are losing the vocabulary to say fathers are essential,” she said. “I predict there’s going to come a time when Father’s Day is hate speech because you’re dissing a lesbian couple.” Piles of unsold real, comfortable Wrangler Jeans clogging up landfills. Tasteful Methodist sex harnesses going unsold at tasteful Methodist sex harness shops. Ships teeming with rear spoilers for family sedans being turned away from the nation’s harbors. A chilling vision of dadless things to come.
Nonetheless, vague problems demand vague solutions. Thus MacDonald advised 2016 Republican candidates: “If you want to eliminate poverty overnight, you can wipe it out by having stable, two-parent households.” (Note the weaseling inclusion of “stable.”) After all, we determine income inequality by households, so take two people living together in poverty, marry ‘em, and presto! No more poverty. Statistical problems go away if you stop gathering statistics. That only sounds nutty if you don’t already know that global warming isn’t real because thermometers lie.
That more or less made sense if you’d listened to the previous hour’s explanations that everything is bad in the inner city, and too many urban folks don’t get married, so, like, the two things are connected, man. Meanwhile, according to MacDonald, “The most affluent members of American society are still getting married.”
Shortly after this, Wade Horn, former assistant secretary for children and families, weighed in with the observation that marriages save money and diversify productivity because “marriages allow for economies of scale and specialization” within the household. (For those scoring economies of scale at home, presumably because specialization has made one of you an actuary: economies of scale good when you are married to someone; bad when buying prescription drugs for nations.) When your bridesmaids give you bewildered looks at the altar, point at your groom and cross their eyes while miming throwing up, just hold your hands apart to show how much he scales your economy.
To a cynic, that might read like a heartless thought. But do you know what’s really heartless? Government. “Children need their mothers and fathers. There is no government program that can possibly substitute for the love and guidance and sense of place in the world that parents provide,” MacDonald explained. “What we’re seeing now in the inner city is catastrophic. Marriage has all but disappeared. When young boys are growing up, they grow up without any expectation that they will marry the mothers of their children.” And she’s right; people who think government will love you or your abandoned children are idiots. The Department of Love has been a failure since 1967, and large faceless institutions will never care for human beings no matter how well they claim to mean. Those “inner city” people shouldn’t have been trying to hug America. They should have hugged something more practical like each other and that smiley face from Wal-Mart.
But if these problems and solutions got too specific for you, there was always Kate Bryan of the American Principles Project and moderator of “The Future of Marriage in America” panel. Sometimes it’s all just The Culture. The Culture — the Great Silent Chobani — depicts marriage as negative. Example: “The old ball and chain.” Why, if we could just get rid of this expression that zero non-horrible people have used unironically for at least a generation, we could have this thing licked in no-time. Women, inequality, stability, stools, the Whole Chobani. Good talk, everyone.
By: Jeb Lund, The Guardian, February 28, 2015
“A Handy Way To Shift The Discussion”: How Republicans Will Use Scott Walker’s Lack Of A College Degree To Stir Class Resentment
Since we’re now all fascinated by Scott Walker, there’s been some discussion in the past few days of the fact that Walker would be the first president in many decades who didn’t have a college degree. He left Marquette after four years, and though he apparently was quite a few credits short of graduating, most people would regard it as an unwise career move when you’ve come that far. Nevertheless, Walker did fine for himself, and some conservatives are now holding up his example as a triumphant rebuke to liberal elitism. Anticipating the scorn Walker will receive from those elitists, they rattle off lists of the high-achievers who didn’t get a degree, like Bill Gates or Mark Zuckerberg.
From what I can tell, the only liberal who has actually said that Walker’s lack of a degree is problematic was Howard Dean, in an appearance on MSNBC’s Morning Joe. But Dean’s one comment keeps getting cited (see Glenn Reynolds or Deroy Murdock or Charles C.W. Cooke or Chris Cillizza) as evidence that “liberals” are looking down their snooty noses at Walker, and by extension, at the majority of Americans who don’t have a college degree.
Which leads me to believe that this is a vein Republicans may be tapping into repeatedly, particularly if Walker becomes the GOP nominee. It wouldn’t be anything new, though if he himself indulged in it, Walker could come by resentment of pointy-headed intellectuals a little more honestly than, say, George H.W. Bush, graduate of Phillips Andover and Yale, who sneered in 1988 that Michael Dukakis represented the “Harvard boutique.” Walker also recently started battling the University of Wisconsin (beloved within the state, but about which voters in Iowa have no similar feelings, I’m guessing), which should help him portray himself as a crusader against the tenured enemies of real Americans.
Anti-intellectualism has often been an effective way for Republicans to stir up class resentment while distracting from economic issues. It says to voters: Don’t think about who has economic power and which party is advocating for their interests. Don’t aim your disgruntlement at Wall Street, or corporations that don’t pay taxes, or the people who want to keep wages low and make unions a memory. Point it in a different direction, at college professors and intellectuals (and Hollywood, while you’re at it). They’re the ones keeping you down. You got laid off while the CEO took home $20 million last year? Forget about that: The real person to be angry at is a professor of anthropology somewhere who said something mean about Scott Walker because he doesn’t have a degree.
There are going to be more than a few Republicans who see in that argument a handy way to shift the discussion away from economic inequality while still sending the message that they’re on the side of ordinary folks. Here, for instance, is Rush Limbaugh yesterday:
The stories are legion of all the great Americans, successful, who have not graduated from college. And of course the two names that come to people’s mind right off the bat are me and Steve Jobs. And then some people throw Gates in there. So there are three people who have reached the pinnacle, who have not gone to college, and those two or three names get bandied about all the time in this discussion.
But it doesn’t matter. To the elites, that doesn’t matter, it doesn’t mean that they are qualified to be in the elite group. And the elite group in Washington is what we call the ruling class or the D.C. establishment, both parties, or what have you. And it’s especially bad in the Drive-By Media. That is one of the most exclusive and I should say exclusionary groups of people that you can imagine.
If you look at it as a club and look at the admittance requirements, it is one of the most exclusives things to get into. It doesn’t matter how successful you are, doesn’t matter how much money you make, whether you’re more successful than they are, whether you earn more than they do, whether you have a bigger audience than they, doesn’t matter, you are not getting in that club.
Something tells me that somewhere at the RNC there’s an intern who just got an assignment to monitor every bit of mainstream and social media she can for any moment where a liberal says something condescending about Walker. Then Republicans can wave it about like the bloody shirt of liberal elitism. It’s a lot easier than coming up with an economic plan that doesn’t involve upper-income tax cuts.
By: Paul Waldman, Senior Writer, The American Prospect, February 17, 2015
“The Country Paid Heavily For The Risks He Took”: It’s Not Too Soon To Judge George W. Bush’s Presidency On Key Issues
In the six years since he left the White House, President George W. Bush has often claimed that it is too early for historical judgments about his presidency. “It’s too soon to say how many of my decisions will turn out,” he wrote in Decision Points, his presidential memoir.
In this, Bush was indulging in what we will call the Truman Consolation. President Harry S. Truman was deeply unpopular during most of his time in the White House and in the years immediately afterward. Only decades later did historians begin to rate his presidency highly for the actions he took in the early years of the Cold War. At one time or another, when their poll ratings are slumping and their media coverage is biting, most modern American presidents like to believe they will eventually be vindicated, just as Truman was.
But Bush is largely wrong: In some of the most important areas of his presidency, it’s not too soon to draw conclusions. Just by judging against Bush’s own forecasts, some of the most far-reaching and important initiatives of his presidency didn’t work — or turned out poorly.
At the top of the list is the war in Iraq. Bush and his advisors badly misjudged what it would entail. They overestimated the international support the United States would be able to obtain for military action. They asserted before the war that American troops would need to stay in Iraq for no more than a couple of years. The administration’s public estimate before the war was that it would cost less than $100 billion; instead, it cost $2 trillion.
Intended originally as a short-term demonstration of American power and influence, the Iraq war over the longer term brought about the opposite. In its unhappy aftermath, Americans became increasingly cautious, more reluctant to become involved overseas. Overall, the war will go down as a strategic blunder of epic proportions, among the most serious in American history.
A similar fate will befall the second-most far-reaching aspect of Bush’s legacy, his historic tax cuts. Bush argued that they would stimulate the economy and spur economic growth. The short-term benefits proved dubious at best, but the harmful long-term consequences were incalculable, both for the federal government and, more importantly, for American society.
When Bush took office, America was in a brief period of budgetary surplus. There was actually a debate, forgotten and almost unimaginable today, about how to use the surplus: Pay down the debt? Launch new federal initiatives? Bush chose to cut taxes, and then did so in ways (tax cuts on dividends and capital gains) that proved immensely beneficial to the wealthiest Americans.
It’s true that President Barack Obama eventually allowed the Bush cuts on upper-income Americans to expire. But the damage had been done. Over the course of nearly a decade, the federal government became increasingly short of funds, while wealthy Americans built up greater and greater assets. Whenever you use a road, bridge or airport that needs repairs (or read a news story about the Pentagon complaining about budget constraints), you might pause to think about the Bush tax cuts and the role they played in shaping the America we see today.
Bush’s second round of tax cuts, in 2003, were historic in another sense. By then, he had already dispatched American troops to Iraq. In every previous military conflict since the Civil War, American presidents had raised taxes to help defray the costs. Bush bucked this historical trend: He lowered them.
It’s true that in a few other policy areas judgments of Bush’s presidency may improve over the years as events unfold and as more information comes to light.
The primary example could be counter-terrorism. The Senate’s recent report on enhanced interrogation techniques makes current judgments on that dark era even harsher than they would have been otherwise. Torture is torture, and no passage of time will change the moral judgments on that.
On the other hand, in the immediate aftermath of the Charlie Hebdo attacks in Paris, some Europeans began to ask why the attackers had not been kept under greater surveillance. If such terrorist attacks were to continue over many years, then judgments on the Bush-era surveillance programs might eventually come to be less harsh than they are today. Or they may come to be seen as the true beginning of a new surveillance state. More time needs to pass before historical judgments on this issue can take shape.
Overall, Bush’s presidency is likely to be remembered for his lack of caution and restraint. Once, in the midst of a discussion with his military advisors, Bush made a telling observation: “Someone has got to be risk-averse in this process, and it better be you, because I’m not.”
George W. Bush was certainly not risk-averse. He took gambles both in foreign policy and with the economy. Sometimes they paid off. Yet overall, the country paid heavily for the risks he took. History isn’t likely to revise that judgment.
By: James Mann, Los Angeles Times (TNS), a fellow in residence at the Johns Hopkins School of Advanced International Studies; The National Memo, February 10, 2015