America's current financial situation is not about one recovering economy; it's a tale of two economies.
One economy is soaring, breaking records of stock market and asset wealth. The other economy is barely holding on, as living-wage jobs - for those lucky enough to have them - are being replaced by employment that provides minimum-wage income that leaves families, in many cases, at the edge of or below the poverty level.
For the people in the economy of surging wealth, The New York Times offers evidence that the good times are back better than ever in articles such as "Hamptons McMansions Herald a Return of Excess."
For those whose dreams have been decimated, but who have not lost the will to resist and reclaim what is theirs, there is Laura Gottesdiener's remarkable new book, A Dream Foreclosed: Black America and the Fight for a Place Called Home.
Gottesdiener provides damning historical context to detail how a large percentage of black Americans have historically been dispossessed - except for a short period of time following emancipation after the Civil War - of home, property and adequate work as a de facto economic policy.
In the foreword to A Dream Foreclosed, journalist and author Clarence Lusane states:
CNN Money released a report in 2012 stating that not only is the median wealth of white households twenty times great than that of black households, but black wealth has undergone a devastating decline - 53 percent from 2005 to 2009 - with the result that the typical black household possessed less than $5,000 in wealth, compared to over $100,000 for whites.
By continuing predatory practices that have resulted in millions of house foreclosures in the past few years, many blacks are still pawns in a great predatory financial system. Nearly 140 years after the Civil War resulted in the end of legal slavery, blacks as a racial group are still being targeted, are still facing daunting - often illegal - challenges to achieve a the dream of a place to call home.
MARK KARLIN: Can you give a brief history providing the context for which a large number of black Americans have been denied, in one way or another, land ownership since slavery? Didn't this begin with the promise of "40 acres and a mule" to ex-slaves after the Civil War, which was not fulfilled, and continues through the exiling of black families from land and home as a result of the subprime foreclosure scam?
LAURA GOTTESDIENER: The long history of denying black Americans land ownership - and, by extension, the rights afforded to the owner class in this society - is one that could easily fill a much longer book than mine. But to summarize briefly, this history began in 1865, in the abandoned rice fields of the Georgia and South Carolina coast, where 40,000 freedmen and women had already begun establishing schools, courts and paid employment. These lands were to be redistributed in 40-acre plots to the freedmen and women, but, as you noted, that decision was reversed, and the land was instead returned to the white enslavers.
This broken promise didn’t only doom the Reconstruction effort; it also serves as a bleak metaphor for much of the history of land ownership in the African-American community since slavery. The failure of Reconstruction ushered in a period of economic servitude in the South called sharecropping and convict leasing. A full 6 million black Americans fled this system through the 20th century and resettled in Northern and Western cities. But these regions also had landscapes and economies based on exclusion. Neighborhoods with people of color were “redlined,” meaning that the federal government refused to extend mortgages, or guarantee any mortgages, in these areas. Most suburbs had restrictive covenants that prohibited residents of color. Meanwhile, local governments bulldozed or seized through eminent domain many downtown neighborhoods where people of color lived in order to build highways or infrastructure in a move called “urban renewal.”
All this discrimination and exclusion was supposed to have ended with the passage of civil rights legislation in the late 1960s and 1970s. But instead what we saw beginning in the 1990s was the recognition on the part of the nation’s mortgage institutions that this long history of racism had created a lucrative market: people desperately in demand for mortgages and adequate housing. This recognition created “reverse-redlining,” the practice of mortgage companies pushing terribly predatory mortgages onto these communities, with full recognition that they were exploiting a historical context of racism for their own short-term profit. And now we’re seeing the effects: millions of foreclosures, evictions and another cycle of racially slanted displacement.
MARK KARLIN: Your book is subtitled Black America and the Fight for a Place to Call Home. Many progressives emphasize the victimhood of injustice. You acknowledge that and detail it, but you are energized by the stories of resistance to foreclosure that you detail by following the four stories of families who resist being victims of predatory lenders. Resistance in A Dream Foreclosed is energizing and empowering, isn't it?
LAURA GOTTESDIENER: Resistance is one of the driving forces of history, particularly in the United States, so of course it’s energizing.
This whole idea that African-Americans have been disproportionately victimized by the foreclosure crisis, well yes, that’s true, and that reality must be better understood if we’re ever to end structural racism in this country. But we don’t focus often enough on how discrimination and exclusion - whether [they’re] meted out against African-Americans or women or immigrants - create the material necessities and intellectual freedoms in which powerful resistance movements can form, flourish and ultimately benefit everyone.
The African-American families and organizers I focused on in the book are far from victims; they’re the reason that we have a radical housing justice movement in this country today. African-Americans are the reason we have breakfast programs in public schools. They’re the reason we haven’t torn down all our public housing and that Detroit hasn’t fully collapsed and that we actually have a powerful movement to stop mass incarceration of people of all races.
There’s a quote by Abiodun Oyewole of the Last Poets at the beginning of Black Power Mixtape that I love for its lyricism and honesty. He says, “America is a dumb puppy with big teeth that bite and hurt. And we take care of America. We hold America to our bosom; we feed America, we make love to America. There wouldn't be an America if it wasn't for black people.”
In other words, there will never be a moratorium on foreclosures for only black Americans. That would never happen. So when we witness powerful African-American-led efforts to stop displacement and eviction, what we’re really seeing is a movement to make the United States a safer and more secure home for families of all races. And once you understand that, you realize that victimhood has no place whatsoever in this history and that white Americans, like myself, should be in solidarity with, and learning from, these movements.
MARK KARLIN: Dispossession of black families from homes appears integrally related not only to an adverse impact on keeping families together but also to the American reality that property rights are related to power. Those without property rights are, in the eyes of the status quo, without power against those who own land and housing.
LAURA GOTTESDIENER: This dispossession definitely, ultimately, comes down to power. Stokely Carmichael explained it well when he wrote in 1966, “Black Americans are a propertyless people in a country where property is valued above all. We had to work for power, because this country does not function by morality, love and nonviolence, but by power.”
What I am trying to highlight in this book is the connection specifically between property and democracy in this country. Our democratic process began with only white male property-owning people having the right to vote. Today, a handful of majority African-American cities across Michigan have been stripped of their local democratic rights altogether after an onslaught of foreclosures decimated their economies. The question I ultimately want to pose with this book is: Can a society truly be a democracy if housing is not considered a right?
Of course, after Citizens United, I think few would be foolish enough to call this nation a functioning democracy, anyway.
MARK KARLIN: Reading A Dream Foreclosed, I felt that for poor and economically vulnerable blacks who played by the rules - and who were exploited by unethical and illegal subprime mortgage lending practices - there is a canary in the coal mine here: The value and dignity of life is superceded by the value of property and those who pull the strings on its ownership. Eventually, that most likely will not be confined to a historically targeted race.
LAURA GOTTESDIENER: In terms of sheer numbers, more white Americans have been displaced so far in the foreclosure crisis, so the devaluation of home and human life is definitely not confined to a historically targeted race.
Really, the canary in the coalmine has already been present for years. The types of predatory “subprime” loans that were pushed to people of all races beginning in the 1990s actually looked a lot like the ones that used to only exist in the secondary mortgage market in redlined neighborhoods. These loans were sold only by sleazy white salesmen called “loan sharks” who took advantage of the fact that reputable, established mortgage companies wouldn’t lend in these neighborhoods. Now very similar contracts are sold to middle-class white families by Bank of America. In other words, and we can see this in many industries, not just the mortgage market, the economic system has grown more and more radical in recent years, with formerly fringe exploitation moving into the mainstream.
What hasn’t changed very much is the racial disparity in generational wealth and property ownership, which is why we continue to see economic crises producing more profound effects in communities of color. For example, as of this past June, the African-American homeownership rate is 43 percent, compared to the white American rate of 73 percent. That’s a [gap of 30 percentage points]. That’s a larger gap than existed in 1970.
MARK KARLIN: These foreclosed houses represent lost assets by the black community. I read that half the asset values of blacks in the United States has declined since the 2007 crash, largely because of the subprime manipulation by the banks too big to fail and secondary lenders. Is that accurate?
LAURA GOTTESDIENER: Those are the same numbers, in terms of asset declines, that I’ve seen as well. It’s worth remembering that the rampant overinflation of house values by the mortgage industry in the lead-up to the collapse certainly factors into this calculation. But regardless, the wealth loss in the African-American community has been staggering. The National Fair Housing Alliance called it “the largest loss of wealth for these communities in modern history.”
What’s important to highlight, however, when we talk about wealth loss, is that we’re really talking about the loss of a family’s generational stability and the future access to everything wealth buys, including higher education, health care, nutritious food, etc. On a community level, we’re also talking about funding for public schools, hospitals, youth programs, recreational centers, art and cultural activities. So we’re really not talking about wealth. We’re talking about survival and the value of people’s lives. Here’s a concrete example: On the South Side of Chicago, which has a predominately African-American population and much less wealth than the city’s North Side, there is no level-one trauma center. One study estimated that longer transport times in the city led to “6.3 excess deaths per year.” Translation: Each year, six South Side residents die because their community has less wealth and, as a result, their lives are less valuable.
MARK KARLIN: You follow four families and individuals as the book unfolds, and you interweave the history of de facto discrimination toward black ownership of land and homes, even after redlining was eliminated. Massive foreclosures appear to decimate communities, not just families.
LAURA GOTTESDIENER: Yes, that’s the issue that I think has been most overlooked in this crisis: the community effects of foreclosure. We talk a lot about individual contracts between families and mortgage pushers, and conservatives and business interests cry that if these contracts aren’t honored, well, then the whole integrity of this contract-loving, law-abiding nation will collapse. It’s the “moral hazard” argument. But this perspective is ultimately myopic, because it falsely assumes that individual homeowners live in a vacuum in which their contracts affect no one but themselves. We know from extensive economic research, as well as pure common sense, that this isn’t the case. When one family is foreclosed on and evicted, everyone else’s property values on the block decrease. This decrease produces two effects: First, it makes others more likely to be “underwater” on their mortgage. Two, it decreases the local tax base and makes it harder for the city to provide services. Both effects lead to more families falling into foreclosure and being evicted. Then you get a downward foreclosure spiral (the International Monetary Fund calls it a “self-reinforcing contractionary spiral”) in which communities end up with lots of vacancy, crime, blight and - as happened in Highland Park, Michigan - a local government so bankrupt that the streetlights are repossessed.
It’s really quite obvious how individual foreclosures can lead to community devastation. So, to return to the contract issue, it’s also quite clear that the entire city of Highland Park, or Richmond, California, or Providence, Rhode Island, never signed a contract ensuring its own destruction. In other words, the core question is whether or not the mortgage industry and the Wall Street banks that securitized these loans have broken the broader social contract by engineering this economic collapse and then enforcing the resulting 4.5 million home evictions. I strongly believe, based on my experience traveling through many of these neighborhoods, that they did - and that, as a result, these contracts are no longer valid.
MARK KARLIN: At your book launch in Brooklyn in August, you mentioned the housing justice movement. How many organizations are there currently working as advocates and how does one find out more about working with these groups?
LAURA GOTTESDIENER: There are thousands, at least. I followed two national networks in the course of my reporting: Take Back the Land, an African-American-led housing network, and Occupy Our Homes, an outgrowth of the Occupy movement that has chapters in about a dozen cities. There is also the Home Defenders League and Right to the City, both of which are large, national umbrella organizations. Nearly every city, large or small, has grass-roots housing groups. In New York City, for example, there’s at least a half dozen that focus on public housing alone.
As I wrote in an article for Yes! magazine near the beginning of this project, “The right-to-housing movements are among the most consistent in our nation’s history of activism - a constant necessity in a country where private property is a right but a family’s basic shelter, security, and safety is a privilege.”
Every city has them, especially now. So for people looking to get involved, I’d begin asking around locally which grass-roots groups are operating in your area, or look for local partners that are working with some of these national umbrella networks.
MARK KARLIN: Given that August 28 is the anniversary of Dr. Martin Luther King's "I Have a Dream Speech," can you discuss a bit further the quotation of Dr. King that Clarence Lusane uses in the foreword to your book?
Just as the doctrine of white supremacy came into being to justify the profitable system of slavery, through shrewd and subtle ways some realtors perpetuate the same racist doctrine to justify the profitable real estate business.
LAURA GOTTESDIENER: That quote comes from Dr. Martin Luther King Jr.’s book Where Do We Go From Here: Chaos or Community, which was published in 1967. It was his last book and the one that speaks most about poverty and the way that economic justice and social equality are inextricably entwined.
The quote, directly, illuminates something very powerful: the way that racism is used as a mechanism to uphold - morally, legally and socially - unjust economic systems. To repeat, white supremacy’s end goal is not racism itself. Rather, it’s a tactic deployed by economic elites who want to maintain their grip on power and use it to not only justify their profit but also to sow racial discord in order to discourage people from uniting and organizing together. It’s really one of the most vile ways of holding on to power, since it essentially entails instilling a doctrine of unfounded hate throughout society, particularly in the minds of young children. And, as many historians have noted, racism often hurts middle- and lower-class whites as well as blacks, which is another reason that I think it’s quite silly for some white people to consider race an issue that only other people should worry about.
To return to the quote, the first economic system, slavery, is one we obviously today consider morally and even economically unjust. But what’s interesting to me about the second part of his quote is that he’s criticizing an economic system - the for-profit real estate business - that is very much still part of our current lives. He wrote this sentence before the passage of the Fair Housing and Fair Lending Acts (1968 & 1977, respectively). Yet today it’s quite well-documented how the mortgage industry still deploys racism for profit: by targeting of communities of color that have been historically denied loans, by steering African-Americans into predatory mortgages and by, most insidiously of all, spreading a doctrine that subtly equates race with being irresponsible, being an unfit homeowner and (since we are a nation of homeowners) being not quite American. As Dr. King said, it’s more subtle but no less significant.
I don’t think it will be too long until we look back and see both slavery and profiting off people’s basic needs as unjust.
MARK KARLIN: You begin your book with the poem "A Dream Deferred" by Langston Hughes. Why did you choose it to open your narrative?
LAURA GOTTESDIENER: Obviously the title of the book itself, A Dream Foreclosed is echoing Hughes. I also thought that, in this context, the final line - or does it explode? - alluded quite nicely to the explosion of the housing market in 2008. More broadly, I chose it because it still speaks to the present reality, despite being more than 50 years old.
Yet, what I would argue makes the poem iconic is not its continued relevance, but rather the way it concretizes people’s hopes and dreams and aspirations, dramatizing them as real enough to fester and stink and crust over and certainly much more real that abstract derivatives or high frequency trading scams. In other words, I thought the poem accurately oriented the reader to anticipate where this book places value.
MARK KARLIN: What is the power that those who are dispossessed, marginalized and exploited have to restore their dream of home, family and land?
LAURA GOTTESDIENER: People always have power in organizing together and using direct action to either protest the current system or to build parallel institutions that sidestep the current structures.
We talk a lot about Wall Street as an impenetrable force - globalized, infinitely wealthy and protected by all the most powerful armies on Earth. In some ways, it’s important to understand the strength of one’s enemy. On the other hand, this depiction is giving Wall Street far too much credit.
Over the last year, I’ve seen women beat the mortgage industry by planting gardens in their backyards. Grandmothers elude sheriffs’ departments tasked with enforcing Wall Street evictions by lying down outside office doors. Single mothers repossess on the repossessors by rallying neighborhood kids to help her put up drywall and rehab bank-owned homes.
Nonviolent direct action and community organizing works. Only those ignorant to this nation’s history - and world history - would discount its power. So for those committed to restoring their dreams of home, family and land, I’d reiterate the words spoken by the mother of Michael Hutchins, who used community organizing to stop the destruction of his public housing complex: “People in numbers work magic,” she told him. “In great big numbers, they work magic.”