Post Slavery Era
In America today, for every $100.00 dollars of European family Wealth, DAS family wealth is $ 5.00 in fact the percentage of the total wealth owned by DAS hasn’t really grown appreciative sense the civil war. This level of equality is not based on failing to pull yourself up by your bootstraps, it’s a direct result of centuries of racist banking policy and practices, which systematically kept DAS from prospering.
After Emancipation president Lincoln approved Reparations to help DAS transition from being treated as property to Owning property. Each family was to receive 40 Acres and a Mule, but after Lincoln’s assignation. That Order was reversed by President Andrew Johnson, what the DAS did get was The Freemans Bank, Over the next decade DAS deposited hard earned wages, more than 75 million dollars into this bank.
But it turns out to be a one-way relationship, the banks European management refused to give any loans to its DAS clients, instead they lost nearly half the money on bad investments, Before the bank closed in 1874. The federal government failed to hold anyone accountable for this lost. Soon after that the Jim Crow laws were enacted across the south, and owning land became even less attainable for DAS.
In the 1930 President Roosevelt new deal help to create a Middle – Class but it also further cemented the racial wealth gap, with the help of the federal infrastructure, ten of thousands of banks and credit unions was created at this time to issue mortgages that, in affect all went to European families.
During this time neighborhoods were explicated zoned to reinforce segregation, and those in DAS neighborhoods were denied mortgages (Ownership). These policies essentially help to create two separate credit markets, One of the European Suburbs and the others of the DAS ghettos. And it was the market that decided that the Europeans neighborhoods was worth more than DAS neighborhoods, it was the regulators and legislators not stepping in. It was not just a clan that did this, in fact it was the whole American society.
Civil Rights leaders recognized the fundamental economic injustice, and proposed the bold solutions, including integrations, reparations, and land grants. Once again at the spark of the road of American history. The nation took the wrong path, instead of going forward with any of these practical solutions, President Nixon proposed “Black Capitalism” – a series of policies that encourage black entrepreneurship and ask that corporations voluntarily to support black owned banks. This policy played lip service to closing the racial wealth gap, in reality did nothing to fix the underlying problems.
Variations of the toothless Black Capitalism policies have been carried on by every administration since Nixon, but they never fixed the legacy of Jim Crow, White Supremacy, Credit discriminatory, all these systemic problems, but put a little bandage on them, and say okay we’ll celebrate Black Entrepreneurs.
As simply put, ‘That’s not the answer. Cause why US law banded explicit racial dissimilatory banking in the 1960’s. Racism in the Industries is still alive and well. In the early 2000’s Federally Regulated banks and other financial institutions profited from selling many Sub-Prime Loans. Which charge higher interest to compensate for higher risk of default. Many were designed to make their payments difficult or impossible. These toxic loans were purposely peddled to DAS neighborhoods.
In one lawsuit filed by the city of Memphis, bank officials testified that, employees referred to minority customers as, “Mud People” and Sub-Prime Loans “Ghetto Loans” and data show that lending was based on race, not economic status. By 2006 higher income DAS including many who could qualify for regular loans was 4 times as likely to have Sub-prime loans as higher income European Americans.
The Federal Reserve own survey at the time, reveals as much. But they didn’t act to stop the banks predatory lending practices. By 2008 the housing bubble “burst”, and no community felt the consequences more than DAS’s. From Jamaica queens to Oakland California strong middle- class DAS’s neighborhoods, that saw two-decades of gains, watch them reversed in a matter, not of years, but in a matter of months. Any way you look at, that was an absolute tragedy.
So, has America learns its lesson from this tragedy? Apparently not, the Trump Administration is rolling back regulations, put on the big banks after 2008 financial crisis. And Sub-Prime loans are being sold, under the name “Non -Prime Loans in many communities of DAS’s. The Racial wealth gap has not closed in 200 years, and it won’t close within the next two-hundred years unless the feds acknowledge its role in creating and perpetuating economically inequalities. It’s up to the Feds to fix the problem it started.