Archive for March 3rd, 2008

For African Americans these are the best of times and the worst of times. Rarely have so many been doing so well, and rarely have so many been doing so badly.  On the one hand, the nation headed into Black History Month with a black American in the running for the highest office in the land.  Of all the high-level endorsements Obama has received, none was perhaps more useful to him than that of Oprah Winfrey.  His anointment by the queen of daytime television provided not just headlines, but both cemented and extended his crossover appeal in a way the backing of the Kennedy clan never could have done.

On the other hand, recent reports reveal that African Americans have not been more pessimistic about their future since the Second World War.  And with good reason.  The crisis in sub-prime mortgages has been more devastating to black Americans than any other racial group, contributing to a full-scale erosion of the gains made in the immediate aftermath of the civil rights era.  Forty years after Martin Luther King was assassinated, it seems the dream is following him to the grave.

According to a report by the Pew Research Center, black Americans are more dissatisfied with their progress than at any time in the past 20 years.  The poll shows that only on in five believe things are better for them now than they were five years ago.  In 1984, right in the middle of the Reagan years, the figure was twice that.  Less than half of African Americans say life will get better for them in the future, compared with 57% in 1986.

And although Obama’s candidacy attempts to transcend racial difference, the rest of the country seems to be stuck in the same binary rut of mutual suspicion that it has always been in.  Roughly one in four of both blacks and whites say they have a “very favorable” view of the other racial group.  Over the past two decades blacks’ views of whites have pretty much stalled, while whites’ views of black have improved.

But just as the struggles over quality have shifted from civil rights to economic rights, so the roots of black pessimism seem to be grounded not in the rawest expressions of racial bigotry, but a less dramatic disappointment at flagging economic progress.  Another Pew survey released at the same time shows that almost half of African Americans born to middle-income parents in the wake of the civil rights era have descended into poverty or near poverty as adults.  Nearly half – 45% – of black children born into solid middle-class families in 1968 have ended up in the lowest 20% of the nation’s earners.  This was true for 16% of whites.

“That’s a stunner,” Orland Patterson, a Harvard sociologist, told the Washington Post.  “These kids were middle-class, but apparently their parents did not have the cultural capital and connections to pass along to them.”

Black Americans are by no means alone in the doldrums.  A census report last year showed that since George Bush became president the verity rate has risen by 9%, the number of people without health insurance has risen by 12% and real median household income has remained stagnant.

Another Pew poll from 2006 found that only 34% of Americans expected today’s children to end up better off than people were now – this is down from 55% shortly before Bush came to power.  Add plummeting house prices, rising gas prices and a roller coaster stock market and you have a nation of ordinary Americans who waver between anxious and downright terrified.

But these woes have not affected everybody in the same way.  African Americans have had little more than one generation – in which they have been legally allowed to compete in all areas of society – to accumulate the kind of capital that might insulate them from such shocks.  In their effort to catch up from a substantially lower base they have had to take greater risks.  Non-white people were three times more likely to have sub-prime loans than whites.

This is no mistake.  Testifying about how she targeted her sub-prime products a former loan officer confessed: “If someone appeared uneducated, inarticulate, was a minority or was particularly old or young, I would try to include all the additional CitiFinancial offered.”

Clearly she was not alone.  And as the market turns sour the effects are devastating.  The total loss of wealth for people of color is estimated to be between $164 billion and $213 billion for sub-prime loans taken during the past eight years, according to a recent report, “Foreclosed – State of the Dream 2008.”

“We believe this represents the greatest loss of wealth for people of color in modern US history,” the report concludes.  “Based on improvements in Median Household Net Worth (from 1982 to 2004) before the current crisis, it would take 594 more years for blacks/African Americans to achieve parity with whites.  The current crisis is likely to make it take much longer.”

And even then the pain was not distributed.   A study by the Consumer Federation of America further revealed that more women were targeted than men, and that among black and Latina women the discrimination was even more amplified.

‘Evidence suggests that women have slightly higher credit scores on average than men and similar credit usage patterns, yet the fact that women are more likely to receive more expensive mortgages at all income levels undercuts the lending industries’ calm assurances that borrowers are priced based on their creditworthiness,” and Allen Fishbein, the director of housing and credit policy at CFA.

Black women earning double the area median income were nearly five times more likely to receive sub-prime mortgages than white men with similar incomes.  Latinas were four times more likely.

So much for the content of their character.  It seems as if these companies were not even interested in the contents of their bank balance.

“America has given the Negro people a bad check,” Martin Luther King said during his famous “I have a dream” speech.  “A check marked ‘insufficient funds’.  We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation.”

Yet the check keeps bouncing.  While some try to keep race out of politics, others are desperate to keep racism from destroying their lives.

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