The Recession’s Racial Divide

[Nikki Stone1]

Edited to provide different link:

http://www.nytimes.com/2009/09/13/opinion/13ehrenreich.html?pagewanted=print

From the woman who spent a year undercover being "the working poor" and wrote the book on poverty in America: a great read.

...WHAT do you get when you combine the worst economic downturn since the Depression with the first black president? A surge of white racial resentment, loosely disguised as a populist revolt. An article on the Fox News Web site has put forth the theory that health reform is a stealth version of reparations for slavery: whites will foot the bill and, by some undisclosed mechanism, blacks will get all the care. President Obama, in such fantasies, is a dictator and, in one image circulated among the anti-tax, anti-health reform “tea parties,” he is depicted as a befeathered African witch doctor with little tusks coming out of his nostrils. When you’re going down, as the white middle class has been doing for several years now, it’s all too easy to imagine that it’s because someone else is climbing up over your back.

Despite the sense of white grievance, though, blacks are the ones who are taking the brunt of the recession, with disproportionately high levels of foreclosures and unemployment. And they weren’t doing so well to begin with. At the start of the recession, 33 percent of the black middle class was already in danger of falling to a lower economic level, according to a study by the Institute on Assets and Social Policy at Brandeis University and Demos, a nonpartisan public policy research organization.

In fact, you could say that for African-Americans the recession is over. It occurred from 2000 to 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During those seven years, one-third of black children lived in poverty, and black unemployment — even among college graduates — consistently ran at about twice the level of white unemployment.

That was the black recession. What’s happening now is more like a depression. Nauvata and James, a middle-aged African American couple living in Prince Georges County, Md., who asked that their last name not be published, had never recovered from the first recession of the ’00s when the second one came along. In 2003 Nauvata was laid off from a $25-an-hour administrative job at Aetna, and in 2007 she wound up in $10.50-an-hour job at a car rental company. James has had a steady union job as a building equipment operator, but the two couldn’t earn enough to save themselves from predatory lending schemes....

Read the whole article if you can.

[jeffbr]

1. Highly recommended

[Nikki Stone1]

2. Thank you

This is a story that needs to get out there.

[fortyfeetunder]

3. *****Malware showed up with NYT link*****

I got a dose of a malware attack called protection-check-07 when I linked to this story.

[Nikki Stone1]

4. Crap. I didn't get a warning on that.

Thanks for letting me know.

[Nikki Stone1]

5. I changed the link.

See if that helps.

[Nikki Stone1]

15. Should be ok now, fortyfeetunder.

:)

[Nikki Stone1]

6. Just so you can see the rest of the article without malware:

September 13, 2009
OP-ED CONTRIBUTORS
The Recession’s Racial Divide

By BARBARA EHRENREICH and DEDRICK MUHAMMAD
WHAT do you get when you combine the worst economic downturn since the Depression with the first black president? A surge of white racial resentment, loosely disguised as a populist revolt. An article on the Fox News Web site has put forth the theory that health reform is a stealth version of reparations for slavery: whites will foot the bill and, by some undisclosed mechanism, blacks will get all the care. President Obama, in such fantasies, is a dictator and, in one image circulated among the anti-tax, anti-health reform “tea parties,” he is depicted as a befeathered African witch doctor with little tusks coming out of his nostrils. When you’re going down, as the white middle class has been doing for several years now, it’s all too easy to imagine that it’s because someone else is climbing up over your back.

Despite the sense of white grievance, though, blacks are the ones who are taking the brunt of the recession, with disproportionately high levels of foreclosures and unemployment. And they weren’t doing so well to begin with. At the start of the recession, 33 percent of the black middle class was already in danger of falling to a lower economic level, according to a study by the Institute on Assets and Social Policy at Brandeis University and Demos, a nonpartisan public policy research organization.

In fact, you could say that for African-Americans the recession is over. It occurred from 2000 to 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During those seven years, one-third of black children lived in poverty, and black unemployment — even among college graduates — consistently ran at about twice the level of white unemployment.

That was the black recession. What’s happening now is more like a depression. Nauvata and James, a middle-aged African American couple living in Prince Georges County, Md., who asked that their last name not be published, had never recovered from the first recession of the ’00s when the second one came along. In 2003 Nauvata was laid off from a $25-an-hour administrative job at Aetna, and in 2007 she wound up in $10.50-an-hour job at a car rental company. James has had a steady union job as a building equipment operator, but the two couldn’t earn enough to save themselves from predatory lending schemes.

They were paying off a $524 dining set bought on credit from the furniture store Levitz when it went out of business, and their debt swelled inexplicably as it was sold from one creditor to another. The couple ultimately spent a total of $3,800 to both pay it off and hire a lawyer to clear their credit rating. But to do this they had to refinance their home — not once, but with a series of mortgage lenders. Now they face foreclosure.

Nauvata, who is 47, has since seen her blood pressure soar, and James, 56, has developed heart palpitations. “There is no middle class anymore,” he told us, “just a top and a bottom.”

Plenty of formerly middle- or working-class whites have followed similar paths to ruin: the layoff or reduced hours, the credit traps and ever-rising debts, the lost home. But one thing distinguishes hard-pressed African-Americans as a group: Thanks to a legacy of a discrimination in both hiring and lending, they’re less likely than whites to be cushioned against the blows by wealthy relatives or well-stocked savings accounts. In 2008, on the cusp of the recession, the typical African-American family had only a dime for every dollar of wealth possessed by the typical white family. Only 18 percent of blacks and Latinos had retirement accounts, compared with 43.4 percent of whites.

Racial asymmetry was stamped on this recession from the beginning. Wall Street’s reckless infatuation with subprime mortgages led to the global financial crash of 2007, which depleted home values and 401(k)’s across the racial spectrum. People of all races got sucked into subprime and adjustable-rate mortgages, but even high-income blacks were almost twice as likely to end up with subprime home-purchase loans as low-income whites — even when they qualified for prime mortgages, even when they offered down payments.

According to a 2008 report by United for a Fair Economy, a research and advocacy group, from 1998 to 2006 (before the subprime crisis), blacks lost $71 billion to $93 billion in home-value wealth from subprime loans. The researchers called this family net-worth catastrophe the “greatest loss of wealth in recent history for people of color.” And the worst was yet to come.

In a new documentary film about the subprime crisis, “American Casino,” solid black citizens — a high school social studies teacher, a psychotherapist, a minister — relate how they lost their homes when their monthly mortgage payments exploded. Watching the parts of the film set in Baltimore is a little like watching the TV series “The Wire,” except that the bad guys don’t live in the projects; they hover over computer screens on Wall Street.

It’s not easy to get people to talk about their subprime experiences. There’s the humiliation of having been “played” by distant, mysterious forces. “I don’t feel very good about myself,” says the teacher in “American Casino.” “I kind of feel like a failure.”

Even people who know better tend to blame themselves — like Melonie Griffith, a 40-year-old African-American who works with the Boston group City Life/La Vida Urbana helping other people avoid foreclosure and eviction. She criticizes herself for having been “naïve” enough to trust the mortgage lender who, in 2004, told her not to worry about the high monthly payments she was signing on for because the mortgage would be refinanced in “a couple of months.” The lender then disappeared, leaving Ms. Griffith in foreclosure, with “nowhere for my kids and me to go.” Only when she went public with her story did she find that she wasn’t the only one. “There is a consistent pattern here,” she told us.

Mortgage lenders like Countrywide and Wells Fargo sought out minority homebuyers for the heartbreakingly simple reason that, for decades, blacks had been denied mortgages on racial grounds, and were thus a ready-made market for the gonzo mortgage products of the mid-’00s. Banks replaced the old racist practice of redlining with “reverse redlining” — intensive marketing aimed at black neighborhoods in the name of extending home ownership to the historically excluded. Countrywide, which prided itself on being a dream factory for previously disadvantaged homebuyers, rolled out commercials showing canny black women talking their husbands into signing mortgages.

At Wells Fargo, Elizabeth Jacobson, a former loan officer at the company, recently revealed — in an affidavit in a lawsuit by the City of Baltimore — that salesmen were encouraged to try to persuade black preachers to hold “wealth-building seminars” in their churches. For every loan that resulted from these seminars, whether to buy a new home or refinance one, Wells Fargo promised to donate $350 to the customer’s favorite charity, usually the church. (Wells Fargo denied any effort to market subprime loans specifically to blacks.) Another former loan officer, Tony Paschal, reported that at the same time cynicism was rampant within Wells Fargo, with some employees referring to subprimes as “ghetto loans” and to minority customers as “mud people.”

If any cultural factor predisposed blacks to fall for risky loans, it was one widely shared with whites — a penchant for “positive thinking” and unwarranted optimism, which takes the theological form of the “prosperity gospel.” Since “God wants to prosper you,” all you have to do to get something is “name it and claim it.” A 2000 DVD from the black evangelist Creflo Dollar featured African-American parishioners shouting, “I want my stuff — right now!”

Joel Osteen, the white megachurch pastor who draws 40,000 worshippers each Sunday, about two-thirds of them black and Latino, likes to relate how he himself succumbed to God’s urgings — conveyed by his wife — to upgrade to a larger house. According to Jonathan Walton, a religion professor at the University of California at Riverside, pastors like Mr. Osteen reassured people about subprime mortgages by getting them to believe that “God caused the bank to ignore my credit score and bless me with my first house.” If African-Americans made any collective mistake in the mid-’00s, it was to embrace white culture too enthusiastically, and substitute the individual wish-fulfillment promoted by Norman Vincent Peale for the collective-action message of Martin Luther King.

But you didn’t need a dodgy mortgage to be wiped out by the subprime crisis and ensuing recession. Black unemployment is now at 15.1 percent, compared with 8.9 percent for whites. In New York City, black unemployment has been rising four times as fast as that of whites. By 2010, according to Lawrence Mishel of the Economic Policy Institute, 40 percent of African-Americans nationwide will have endured patches of unemployment or underemployment.

One result is that blacks are being hit by a second wave of foreclosures caused by unemployment. Willett Thomas, a neat, wiry 47-year-old in Washington who describes herself as a “fiscal conservative,” told us that until a year ago she thought she’d “figured out a way to live my dream.” Not only did she have a job and a house, but she had a rental property in Gainesville, Fla., leaving her with the flexibility to pursue a part-time writing career.

Then she became ill, lost her job and fell behind on the fixed-rate mortgage on her home. The tenants in Florida had financial problems of their own and stopped paying rent. Now, although she manages to have an interview a week and regularly upgrades her résumé, Ms. Thomas cannot find a new job. The house she lives in is in foreclosure.

Mulugeta Yimer of Alexandria, Va., still has his taxi-driving job, but it no longer pays enough to live on. A thin, tall man with worry written all over his face, Mr. Yimer came to this country in 1981 as a refugee from Ethiopia, firmly believing in the American dream. In 2003, when Wells Fargo offered him an adjustable-rate mortgage, he calculated that he’d be able to deal with the higher interest rate when it kicked in. But the recession delivered a near-mortal blow to the taxi industry, even in the still relatively affluent Washington suburbs. He’s now putting in 19-hour days, with occasional naps in his taxi, while his wife works 32 hours a week at a convenience store, but they still don’t earn enough to cover expenses: $400 a month for health insurance, $800 for child care and $1,700 for the mortgage. What will Mr. Yimer do if he ends up losing his house? “We’ll go to a shelter, I guess,” he said, throwing open his hands, “if we can find one.”

So despite the right-wing perception of black power grabs, this recession is on track to leave blacks even more economically disadvantaged than they were. Does a black president who is inclined toward bipartisanship dare address this destruction of the black middle class? Probably not. But if Americans of all races don’t get some economic relief soon, the pain will only increase and with it, perversely, the unfounded sense of white racial grievance.

Barbara Ehrenreich is the author of the forthcoming “Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America.” Dedrick Muhammad is a senior organizer and research associate at the Institute for Policy Studies.


Copyright 2009 The New York Times Company
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[Raineyb]

7. I hope that more people read this.

It's so frustrating to read tales like this and then listen to people blame the racial disparity on black people as though racism played no role in these disparities. The racism involved in keeping black people into lower paying jobs, the inability in the past to get housing so they don't have as much to leave their heirs which is effecting people's net worth now. The flat out refusal to hire black people, companies deliberately targeting black and brown people for sub prime loans using the church to get past people's instinctual distrust of the loans.

But racism is over and we overuse the word.

Ridiculous!

[Nikki Stone1]

8. I read something recently that talks about African Americans as being colonized within the US

I agree with that. I think Katrina really brought that out. I have a very dear (white) friend who escaped Katrina with her grandson. It was a close call for her and they came as close to death as they ever have in this lifetime when their shelter caved in during the storm. However, they were able to get out and able to get to a shelter. The fact that buses never came for the African Americans in NOLA, the fact that there was no plan to get them out of there, the fact that the White House played politics for days with the Democratic governor instead of saving the people, and the fact that the Lower 9th ward is not being rebuilt--these all point to a complete disregard (at very least) for African Americans. I still think that the 3 days Bush sat on recovery efforts--sitting on FEMA (which WAS ready to go, regardless of what you've heard); sitting on the American Red Cross (national level) whose hands were tied by the Fed; and preventing private aid (the stories of private companies (like WalMart) having trucks of water and supplies turned back)--this was an "ethnic cleansing."

[DKRC]

9. YES

Wrong color, wrong tax bracket, wrong party.

If you can find a link I'd like to read it.

[Nikki Stone1]

11. Link

http://www.fromthewilderness.com/free/ww3/011806_exterminism_katrina3.shtml

Privilege and Colonization

One can’t help but ponder not just the obvious about the Gulf Coast’s National Guards that were off in Iraq during Katrina, whose members had to sit by helplessly wondering about their own families, neighbors, friends, but about how much relief could be provided, and how effective an evacuation might have been mounted if the total assets of the US military had been available and put to use.

Cuba evacuated 1.4 million people in advance of Hurricane Dennis, a Cat 4 that hit them in July, and suffered 16 fatalities (the greatest number for any storm since 1963). That’s because Cuba not only invests in disaster preparation and strong civil defense, but because there is a social commitment to medical infrastructure, high literacy levels, and government support of community organizers, to mention a few of the reasons.

We did the free-market evacuation, an unenforceable order for people to leave under their own power – by private automobile – after it was too late. Cuba is resource poor. The United States is resource rich. Figure it out.

An Oxfam report on Cuba’s response system notes the following as “intangibles” that make the difference:

• social cohesion and solidarity (self-help and citizen-based social
protection at the neighborhood level)

• trust between authorities and civil society

• political commitment to risk reduction

• good coordination, information-sharing, and cooperation among
institutions involved in risk reduction

• attention to the most vulnerable population

• attention to lifeline structures (concrete procedures to save
lives, evacuation plans, and so on)

• investment in human development

• an effective risk communication system and institutionalized
historical memory of disasters, laws, regulations, and directives to
support all of the above

• investments in economic development that explicitly take potential
consequences for risk reduction or increase into account

• investment in social capital

• investment in institutional capital (e.g. capable, accountable, and
transparent government institutions for mitigating disasters)

The reaction of the US government to Katrina was an ugly snapshot of exterminism. You’re on your own… if you’re poor (and especially Black), too fucking bad.

There was also no more stark a picture of the African American national question, to my mind, than seeing Black families in New Orleans roaming through the poisonous floodwaters in search of survival. African America is only one disaster away from third-world status, and we can see clearly how Black people are the vast, vast majority of those who were left behind, without transportation, by the free-market evacuation. The White Nation managed by and large to get out. The Black Nation was left to fend for itself.

The poor whites among these refugees have been effectively excluded from the White Nation by their class, but the fact that they are “white” does not change the essential reality of race as a national question – discernable only through the twin lenses of privilege and colonization.

Looking at the whole question in light of Katrina’s aftermath, it becomes much more difficult to shazam away the national reality we witnessed on the devastated Gulf Coast. Historically, empirically, dialectically, subjectively… doesn’t make a bit of difference which method you use, the scenes from places like New Orleans, 80% under a toxic soup that the EPA has said couldn’t be cleaned up with the equivalent of the US Gross National Product, are scenes from the African Diaspora and scenes from a colonized nation.

Jordan Flaherty, reporting from the zone on September 2nd , wrote:

In the refugee camp I just left, on the I-10 freeway near Causeway, thousands of people (at least 90% black and poor) stood and squatted in mud and trash behind metal barricades, under an unforgiving sun, with heavily armed soldiers standing guard over them. When a bus would come through, it would stop at a random spot, state police would open a gap in one of the barricades, and people would rush for the bus, with no information given about where the bus was going. Once inside (we were told) evacuees would be told where the bus was taking them - Baton Rouge, Houston, Arkansas, Dallas, or other locations. I was told that if you boarded a bus bound for Arkansas (for example), even people with family and a place to stay in Baton Rouge would not be allowed to get out of the bus as it passed through Baton Rouge. You had no choice but to go to the shelter in Arkansas. If you had people willing to come to New Orleans to pick you up, they could not come within 17 miles of the camp.

“I traveled throughout the camp and spoke to Red Cross workers, Salvation Army workers, National Guard, and state police, and although they were friendly, no one could give me any details on when buses would arrive, how many, where they would go to, or any other information. I spoke to the several teams of journalists nearby, and asked if any of them had been able to get any information from any federal or state officials on any of these questions, and all of them, from Australian to local Fox affiliates complained of an unorganized, non-communicative, mess. One cameraman told me ‘as someone who’s been here in this camp for two days, the only information I can give you is this: get out by nightfall. You don’t want to be here at night.’

I cannot imagine this “plan” for a destitute mass this size if they were mostly white folks.

Or such a response. On the news, white families foraging through flooded convenience stores for food and water were said to be “recovering” food. Black families doing exactly the same thing were called “looters.” The organs of commodified information were clamoring for control of this deracinated mass of black bodies — get law and order back, even though the city is gone, was a more urgent cry than finding those who were still trapped in their sweltering attics, slowly dying of dehydration and vascular collapse… children the most vulnerable.

Bush spoke on September 2nd in response to the mounting wrath at how the Federal government has responded, and all he could think of to say was, “We are going to restore order in the city of New Orleans.” He knows his White nationalist base well, and that was all he had left. New Orleans Mayor Ray Nagin, at his wits end with diplomatic restraint had to be bleeped on the radio when he said, “They don’t have any fucking idea what’s going on!”

Louisiana’s Democrat Senator Mary Landrieu, a fully-owned political subsidiary of the oil industry, was being interviewed by Anderson Cooper of CNN on September 1st. Cooper, normally the insufferable news model offspring of the Vanderbilts, had been immersed in the post-Katrina reality of New Orleans for four days prior to the interview, and the reality had pierced the shell of privilege around his own heart. Landrieu offered some insipid remark about “Anderson, tonight, I don't know if you've heard – maybe you all have announced it – but Congress is going to an unprecedented session to pass a $10 billion supplemental bill tonight to keep FEMA and the Red Cross up and operating.”

“Excuse me, Senator,” interrupted Cooper, “I'm sorry for interrupting. I haven't heard that, because, for the last four days, I've been seeing dead bodies in the streets here in Mississippi. And to listen to politicians thanking each other and complimenting each other, you know, I got to tell you, there are a lot of people here who are very upset, and very angry, and very frustrated.

“And when they hear politicians slap – you know, thanking one another, it just, you know, it kind of cuts them the wrong way right now, because literally there was a body on the streets of this town yesterday being eaten by rats because this woman had been laying in the street for 48 hours. And there's not enough facilities to take her up.”

Even from the mouths of the press…. such was the hellishness of these scene to the innocent sheltered eyes of White America. Rats eating corpses.

The emergence of the American Empire has taken a terrible toll on many people, many nations. I’ll be the last to argue for competitive oppressions. Each was unique in its particulars, and each the same in its purpose — the capitalist must continue to make money, continue to expand, and the capitalist state must continue to ensure his access to materials and — most critically — human beings to work and valorize his capital.

When people are excess to that process, when they become surplus people, they are sent away and left to die – exterminism.

In New Orleans, where there was 40% illiteracy in the Black Nation, and a terrible job shortage, petty crime and drug use were survival industries that also serve to feed the Dantean slave-mill of Angola State Penitentiary. Now, with Katrina and poverty displacing them, we can pretty well expect the speculators and developers to come in and make good on Bush’s weird promise today that this would lead to a “more beautiful Gulf Coast.” First slaves, then sharecroppers, then meatpackers, then service workers and convicts… now Indians – thrown off the land.

The Black Nation is a colony of the White Nation, as is the Brown Nation now re-forging itself out of multiple Latin American Diasporans in the Sunbelt.

[DKRC]

13. Thanks Nikki

I hadn't seen this. Powerful & true.

The site has a lot of links I need to follow. Appreciate you pointing me in that direction. :hi:

[Nikki Stone1]

14. You're welcome.

I think it's important to acknowledge what is in plain sight.

[keep_it_real]

10. Damn, this is serious!

[Nikki Stone1]

12. Yes it is.

Thanks for noticing.