Did Racism Help Cause the Mortgage Crisis? Part One

I am honored to present the work of Ralph Brauer.  For some time I have marveled as I read his research and reflected upon his work.  Today, this author of note shares with readers at BeThink.  I welcome Ralph Brauer.  May I invite you to peruse his prose.  Please ponder; then share your thoughts.

copyright © 2008 Ralph Brauer. The Strange Death of Liberal America

There is an elephant in the room no one wants to mention when you bring up the housing crisis.  It is the same elephant that has occupied the room since the very beginning of this nation.  Yes, it was there that hot Philadelphia summer when they drafted the Constitution.  Maybe that is what Ben Franklin is gazing at as he sits in the center of the famous painting of the signing of the Constitution by Howard Chandler Christy that hangs today in the House of Representatives east stairway.  Certainly the elephant had haunted Franklin much of his life causing him to call it “a constant butchery of the human species” in an anonymous letter written in 1772.  That elephant that haunted Franklin and continues to haunt us today is racism.

The economic crisis we face today has produced countless essays analyzing its origins and proposing all manner of cures, but almost no one has dared to mention the elephant in the room.  As I researched this topic I found only one person who seemed to be on to it: John Kimble, who wrote an excellent op ed piece in the New Orleans Times Picayune in October that should be required reading for everyone.  One sentence gets to the heart of the matter:

What few today remember is that one of the government’s central goals in undertaking mortgage market reform was to segregate American cities by race.

That such a piece should come from New Orleans does not surprise me; that few have sought to connect what to me seem rather obvious dots is more of a mystery to me.  But that is the power of that elephant in the room.

Perhaps now with an African American President we will finally have more open discussion of the elephant in the room and that discussion should begin by acknowledging that the elephant played a significant role in causing the mortgage crisis which in turn has toppled financial giants as if they were a row of dominoes.  To understand why we need to go back to the years immediately after the Second World War when the housing boom began.

The Creation of the Suburb

The discussion of the role of racism in America should begin by confronting the most important social, cultural and political reality of the past half century: the American suburb is largely a creation of racist loan policies that came from none other than the federal government.  The suburban migration stands as one of the largest freely-undertaken, government-subsidized mass social movements in history.  It accomplished by democratic means what dictators over the ages have tried to accomplish by force: alter the physical, economic, and social environment to create a unique culture.  As Kenneth Jackson writes in Crabgrass Frontier, his history of the American suburb:

Suburbanization was not an historical inevitability created by geography, technology, and culture, but rather the product of government policies.  (p. 293)

Through a variety of government subsidies, the creation of the suburbs allowed people of modest means to attain what real estate ads have christened the American dream.  The immensity of this achievement is only beginning to dawn on us, for it constituted the kind of land and social reform that governments everywhere still try to accomplish.  Kenneth Jackson notes:

Single family housing starts in this country rose from 114,000 in 1944 to 937,000 in 1946, 1,183,000 in 1948, and 1,692,000 in 1950.  (p. 233)

The federal government financed this growth through the Federal Housing Administration, an agency created during the New Deal to help spur the growth of home construction.  During the postwar housing boom Jackson points out:

The main beneficiary of the $119 billion in FHA mortgage insurance issued in the first four decades of FHA operation was suburbia.

Drawing the Color Line

A half century before the creation of suburban America, W.E.B. DuBois had written in the very first sentence of The Souls of Black Folk the immortal and prescient words:

HEREIN lie buried many things which if read with patience may show the strange meaning of being black here at the dawning of the Twentieth Century.  This meaning is not without interest to you, Gentle Reader; for the problem of the Twentieth Century is the problem of the color-line.

Little could DuBois have predicted that the color line would become a red line drawn around the American suburb by none other than the FHA.  The name redlining actually dates back to the 1930s when the FHA first began using color codes to designate areas where they should not invest.  Red areas were off-limits.  Jackson states:

FHA also helped to turn the building industry against the minority and inner-city housing market, and its policies supported the income and racial segregation of suburbia.

Even as the suburbs mushroomed across the American landscape, a few were asking questions.  In 1955 Columbia Professor Charles Abrams charged:

From its inception, the FHA set itself up as protector of the all white neighborhood.  It sent its agents into the field to keep Negroes and other minorities from buying houses in white neighborhoods.  (Jackson, pp. 213-214)

In what has become the classic source on FHA discrimination, The Politics of Exclusion, Michael Danielson quotes an FHA underwriting manual:

If a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.  A change in social or racial occupancy generally leads to instability and reduction in values.(p. 203)

FHA policies also required appraisers to determine the probability of people of color moving into a neighborhood and even forced homeowners to agree not to sell their property to someone of another race.  According to one commentator,

“[T]he most basic sentiment underlying the FHA’s concern was its fear that property values would decline if a rigid black and white segregation was not maintained.

With the rise of the Civil Rights movement in the 1960s, the FHA began to make some attempt to right these wrongs, but with the election of Richard Nixon in 1968, the so-called “Southern Strategy” soon put a stop these efforts.  Chris Bonastia documented Nixon’s dismantling of FHA’s residential integration efforts in his paper, “Hedging His Bets: Why Nixon Killed HUD’s Desegregation Efforts.” Nixon’s refusal to back HUD’s reform efforts would have an impact on American society that ranks right up there with the decision by President Rutherford B. Hayes to abandon the South to the segregationists, essentially ending Reconstruction.

Yet to see one man and one decision as a historical lynch pin is to take an outmoded view of history, for the truth is that by 1968 the die had already been cast and DuBois’ color line had been drawn like a moat around the suburbs designed to keep people of color from entering. It would have taken considerable political will–and perhaps even federal law enforcement–to desegregate the suburbs by then.  Dr. Martin Luther King, jr.’s infamous march into the Chicago suburb of Cicero, where he was met with bricks and catcalls, showed the depth of that moat. There is a moment in the video of that march when you hear what sounds like a shot and King turns suddenly as if wondering where the shot came from.

This does not excuse Nixon’s actions, which at best were misguided and at worst cowardly and racist. While historians debate how much Richard Nixon personally bought into the Thurmond catechism, his elevation of Thurmond aide Harry Dent to the White House staff after the election sent a clear signal of his alliance with Thurmond. Dent was the one who sat outside the Senate chamber with a pail in case Thurmond needed a quick bathroom break during his record-setting filibuster. Nixon himself put it bluntly:

I am not going to campaign for the black vote at the risk of alienating the suburban vote.

For the federal government to go further than the law, to force integration in the suburbs, I think is unrealistic. I think it will be counter-productive and not in the interest of better race relations. [quoted in Charles M. Lamb, Housing Segregation in Suburban America Since 1960, p. 4, p. 9]

Still, as Lamb would point out in a footnote, two decades later a University of California study found that 44% of white Americans favored encouraging African Americans to move to the suburbs.

The Creation of the Subprime Market

Yet the FHA did not just discriminate against people of color who sought to live in the suburbs, it also made  it more difficult for them to obtain loans, period, by refusing to insure loans in areas with high concentrations of people of color.  The systemic impact of this is still reverberating through America’s inner cities.  Without FHA insurance, no reputable bank would issue a home loan to someone living on the other side of the “color line.” This in turn had a host of social and cultural impacts, from resource-poor schools to lack of jobs because businesses would not build where the FHA would not write loans.

You don’t need to be a systems modeler to see how each of these came to feed on each other. In the last decade scholars have begun to refer to this as “structural racism,” by which they mean a convergence of forces and policies that conspires to sustain the color line. Just imagine one systemic loop: you cannot get a good job because you live in a neighborhood with substandard housing and were educated in a substandard school and so you cannot qualify for a loan for better housing which in turn further reinforces the substandard housing. Structural racism is also not a bad metaphor, either, for it suggests the immense weight of these multiple factors that presses down on people living inside those red lines drawn by the FHA.

Where legitimate businesses and institutions are prevented from entering, illegitimate ones will grow. Since regular banks would not lend to people of color in inner city neighborhoods and FHA policies kept them from lending to the few people of color who could afford suburban housing, there obviously was a need for someone to supply these loans and so we have the growth of the so-called subprime market, only back in those days they were known as loan sharks and other unprintable words and had reputation to rival check cashing operations, greedy landlords and take and bake furniture renters. Anyone who has grown up in the inner city can tell stories not only about price-gouging home loans, but high-priced loans for everything from cars to buying furniture or clothes on credit.

What Is Subprime Lending

Subprime lending is a mixture of old-fashioned altruism and blatant thievery with an American twist. Some entered into the business of making loans to people of color because they genuinely believed people deserved an equal opportunity, others saw a chance to make a quick buck. The reality of the situation was that without FHA insurance even the most well-meaning lenders still had to charge more than they would have for a white suburban home-buyer.

A 2003 study for the Lawyers Committee on Civil Rights Under Law reported:

While red-lining has served to exclude poor and minority residents from the benefits of mainstream mortgage lending, purveyors of predatory lending (or so-called “reverse red-lining”) practices have targeted many of the same poor and minority households that traditional lending institutions have ignored or excluded.

In testimony before the House Committee on Banking and Financial Services in 2000 Bill Brennan of the Atlanta Legal Aid Society outlined how subprime lending works for lenders:

Here is what these companies do, the predators. They overcharge on interest and points, they charge egregiously high annual interest and prepaid finance charges, points, which are not justified by the risk involved, because these loans are collateralized by valuable real estate.

Since they usually only lend at 70 to 80 percent loan-to-value ratios, they have a 20 to 30 percent cushion to protect them if they have to foreclose. They usually always buy at the foreclosure sale and pay off the debt and sell the house for a profit.

As for those taking out the loans, Gary Gensler, Undersecretary for Domestic Finance at the treasury Department, told the same Committee:

Borrowers in these markets often have limited access to mainstream financial services. This leads to two things, as the Senator said earlier. Some borrowers who really would qualify for prime loans-we estimate anywhere between 15 and 35 percent of the subprime market could qualify for prime and cannot get that prime loan. Second, the rate and term competition is limited. Subprime lenders don’t tend to compete as much on price.

Beyond preying on vulnerable populations, beyond the limited access to mainstream financial services, is that abusive practices tend to be coupled with high-pressure sales tactics, whether by a mortgage broker, a home improvement contractor, sometimes a lender themselves in the local community.

Perhaps the most extensive and longest longitudinal study of predatory lending practices has been the Woodstock Institute’s periodic reports on Chicago.  It’s 1999 report “Two Steps Back” was among the earliest to blow the whistle on predatory lending.  They found:

Documented cases of abuse include fees exceeding 10 percent of the loan amount, payments structured so that they do not even cover interest (resulting in increasing principle balances), and flipping a loan numerous times in a couple of years.

At the same time, lending to lower-income and minority communities is often viewed as an isolated line of business, in which the focus is on the short term transaction and associated fees. Lenders active in such communities tend to be mortgage and finance companies subject to much less regulation than banks and thrifts. The increased scale of the subprime industry itself has resulted in a larger number of abuses. Moreover, there has not been a proportionate increase in regulation or regulatory resources devoted to this new industry.

As usual, graphs and tables tell the story in black and white:





The date on the graph may be a little difficult to see. It is 1998. On the first table, the percentage of subprime loans going to African American communities is 53%. Only 9% went to predominantly white communities. The Woodstock study went on to deal with the obvious question: is it race or income that is the strongest determinant of who receives a subprime loan? They found it was the former:

Thus, whether a neighborhood is predominantly African-American explains the greatest amount of variation in subprime lending,

The Final Results

In 1997 Bill Brennan could tell the New York Times:

We have financial apartheid in our country. We have low-income, often minority borrowers,  who are charged unconscionably high interest rates, either directly or indirectly through the cover of added charges.

Three years later Census data would confirm Brennan’s charge. The Lawyers Committee on Civil Rights Under Law found:

The typical white person lives in a neighborhood that is overwhelmingly white, with a few minorities (80.2% white, 6.7% African American, 7.9% Hispanic American, and 3.9% Asian American), the typical African American lives in a neighborhood that is mostly black (51.4% black, 33.0% white, 11.4% Hispanic American, and 3.3% Asian American). By comparison, the typical Hispanic American lives in a neighborhood that is more evenly Hispanic American and white (45.5% Hispanic, 36.5% white, 10.8% black, and 5.9% Asian American); and the typical Asian American lives in a neighborhood that is mostly white (17.9% Asian American, 54% white, 9.2%  black, and 17.4% Hispanic American).

In a study released this year by United for a Fair Economy, the authors note:

According to federal data, people of color are more than three times more likely to have subprime loans: high-cost loans account for 55% of loans to Blacks, but only 17% of loans to Whites.

This is a decade after the Woodstock study identified a similar pattern in Chicago.

Reflections

This history makes you wonder what kind of country we might have become had racism not pervaded the home mortgage market. The United for a Fair Economy study puts it eloquently:

While the housing crisis has affected all sectors of society, it has disproportionately affected communities and individuals of color. For them, the dream that Martin Luther King, Jr. once spoke of has been foreclosed.

Now the injustices white America heaped on black America for half a century have come home to roost. The sobering thought to ponder is that what you have read so far is merely the very tip of a rather large iceberg, for there are literally dozens and dozens of books and countless articles on racism and housing. If you enter “racism” and “housing” in Google you will find over four million entries. Yet despite over half a century of studies, reports and papers about discriminatory lending, little was done about it.

The most damning piece of evidence in this entire story is not that racism fostered predatory loans, but that like organized crime going from petty bootleggers and drug dealers to big time operators, the practice of predatory loan sharking expanded and went mainstream– moving from being the providence of small-time shady operators to mainstream banks. Essentially, loan-sharking cast off its sleazy past and the bigger it became the more people looked the other way.

That is until it suddenly threatens to take down the entire American economy. Now like the figures in that painting of Constitution Hall, fingers are pointing and people are staring.

If racism played a big role in creating the mortgage crisis, the solution to our current problems will prove tougher to deal with than what the so-called experts have been telling us. We could be witnessing the fourth American revolution. The first was the war for independence, the second the Civil War, the third the Great Depression and now the present crisis which combines the themes of the previous two–race and economics.

The next essay in this series focuses on how we got here and why, for only by understanding that journey can we see a way out of the current morass. What is clear so far is that this crisis is not merely the fault of a few misguided CEOs, but rather the culmination of decades of discrimination in which all of us are culpable.

Now the time has come to stop pretending there is no elephant in the room and deal with it.

Resources

For a good bibliography on the subject click here.

Crossposts: The Strange Death of Liberal America, My Left Wing, Progressive Historians, The Wild, Wild Left

Did Racism Help Cause the Mortgage Crisis? Part One

I am honored to present the work of Ralph Brauer.  For some time I have marveled as I read his research and reflected upon his work.  Today, this author of note shares with readers at BeThink.  I welcome Ralph Brauer.  May I invite you to peruse his prose.  Please ponder; then share your thoughts.

copyright © 2008 Ralph Brauer. The Strange Death of Liberal America

There is an elephant in the room no one wants to mention when you bring up the housing crisis.  It is the same elephant that has occupied the room since the very beginning of this nation.  Yes, it was there that hot Philadelphia summer when they drafted the Constitution.  Maybe that is what Ben Franklin is gazing at as he sits in the center of the famous painting of the signing of the Constitution by Howard Chandler Christy that hangs today in the House of Representatives east stairway.  Certainly the elephant had haunted Franklin much of his life causing him to call it “a constant butchery of the human species” in an anonymous letter written in 1772.  That elephant that haunted Franklin and continues to haunt us today is racism.

The economic crisis we face today has produced countless essays analyzing its origins and proposing all manner of cures, but almost no one has dared to mention the elephant in the room.  As I researched this topic I found only one person who seemed to be on to it: John Kimble, who wrote an excellent op ed piece in the New Orleans Times Picayune in October that should be required reading for everyone.  One sentence gets to the heart of the matter:

What few today remember is that one of the government’s central goals in undertaking mortgage market reform was to segregate American cities by race.

That such a piece should come from New Orleans does not surprise me; that few have sought to connect what to me seem rather obvious dots is more of a mystery to me.  But that is the power of that elephant in the room.

Perhaps now with an African American President we will finally have more open discussion of the elephant in the room and that discussion should begin by acknowledging that the elephant played a significant role in causing the mortgage crisis which in turn has toppled financial giants as if they were a row of dominoes.  To understand why we need to go back to the years immediately after the Second World War when the housing boom began.

The Creation of the Suburb

The discussion of the role of racism in America should begin by confronting the most important social, cultural and political reality of the past half century: the American suburb is largely a creation of racist loan policies that came from none other than the federal government.  The suburban migration stands as one of the largest freely-undertaken, government-subsidized mass social movements in history.  It accomplished by democratic means what dictators over the ages have tried to accomplish by force: alter the physical, economic, and social environment to create a unique culture.  As Kenneth Jackson writes in Crabgrass Frontier, his history of the American suburb:

Suburbanization was not an historical inevitability created by geography, technology, and culture, but rather the product of government policies.  (p. 293)

Through a variety of government subsidies, the creation of the suburbs allowed people of modest means to attain what real estate ads have christened the American dream.  The immensity of this achievement is only beginning to dawn on us, for it constituted the kind of land and social reform that governments everywhere still try to accomplish.  Kenneth Jackson notes:

Single family housing starts in this country rose from 114,000 in 1944 to 937,000 in 1946, 1,183,000 in 1948, and 1,692,000 in 1950.  (p. 233)

The federal government financed this growth through the Federal Housing Administration, an agency created during the New Deal to help spur the growth of home construction.  During the postwar housing boom Jackson points out:

The main beneficiary of the $119 billion in FHA mortgage insurance issued in the first four decades of FHA operation was suburbia.

Drawing the Color Line

A half century before the creation of suburban America, W.E.B. DuBois had written in the very first sentence of The Souls of Black Folk the immortal and prescient words:

HEREIN lie buried many things which if read with patience may show the strange meaning of being black here at the dawning of the Twentieth Century.  This meaning is not without interest to you, Gentle Reader; for the problem of the Twentieth Century is the problem of the color-line.

Little could DuBois have predicted that the color line would become a red line drawn around the American suburb by none other than the FHA.  The name redlining actually dates back to the 1930s when the FHA first began using color codes to designate areas where they should not invest.  Red areas were off-limits.  Jackson states:

FHA also helped to turn the building industry against the minority and inner-city housing market, and its policies supported the income and racial segregation of suburbia.

Even as the suburbs mushroomed across the American landscape, a few were asking questions.  In 1955 Columbia Professor Charles Abrams charged:

From its inception, the FHA set itself up as protector of the all white neighborhood.  It sent its agents into the field to keep Negroes and other minorities from buying houses in white neighborhoods.  (Jackson, pp. 213-214)

In what has become the classic source on FHA discrimination, The Politics of Exclusion, Michael Danielson quotes an FHA underwriting manual:

If a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.  A change in social or racial occupancy generally leads to instability and reduction in values.(p. 203)

FHA policies also required appraisers to determine the probability of people of color moving into a neighborhood and even forced homeowners to agree not to sell their property to someone of another race.  According to one commentator,

“[T]he most basic sentiment underlying the FHA’s concern was its fear that property values would decline if a rigid black and white segregation was not maintained.

With the rise of the Civil Rights movement in the 1960s, the FHA began to make some attempt to right these wrongs, but with the election of Richard Nixon in 1968, the so-called “Southern Strategy” soon put a stop these efforts.  Chris Bonastia documented Nixon’s dismantling of FHA’s residential integration efforts in his paper, “Hedging His Bets: Why Nixon Killed HUD’s Desegregation Efforts.” Nixon’s refusal to back HUD’s reform efforts would have an impact on American society that ranks right up there with the decision by President Rutherford B. Hayes to abandon the South to the segregationists, essentially ending Reconstruction.

Yet to see one man and one decision as a historical lynch pin is to take an outmoded view of history, for the truth is that by 1968 the die had already been cast and DuBois’ color line had been drawn like a moat around the suburbs designed to keep people of color from entering. It would have taken considerable political will–and perhaps even federal law enforcement–to desegregate the suburbs by then.  Dr. Martin Luther King, jr.’s infamous march into the Chicago suburb of Cicero, where he was met with bricks and catcalls, showed the depth of that moat. There is a moment in the video of that march when you hear what sounds like a shot and King turns suddenly as if wondering where the shot came from.

This does not excuse Nixon’s actions, which at best were misguided and at worst cowardly and racist. While historians debate how much Richard Nixon personally bought into the Thurmond catechism, his elevation of Thurmond aide Harry Dent to the White House staff after the election sent a clear signal of his alliance with Thurmond. Dent was the one who sat outside the Senate chamber with a pail in case Thurmond needed a quick bathroom break during his record-setting filibuster. Nixon himself put it bluntly:

I am not going to campaign for the black vote at the risk of alienating the suburban vote.

For the federal government to go further than the law, to force integration in the suburbs, I think is unrealistic. I think it will be counter-productive and not in the interest of better race relations. [quoted in Charles M. Lamb, Housing Segregation in Suburban America Since 1960, p. 4, p. 9]

Still, as Lamb would point out in a footnote, two decades later a University of California study found that 44% of white Americans favored encouraging African Americans to move to the suburbs.

The Creation of the Subprime Market

Yet the FHA did not just discriminate against people of color who sought to live in the suburbs, it also made  it more difficult for them to obtain loans, period, by refusing to insure loans in areas with high concentrations of people of color.  The systemic impact of this is still reverberating through America’s inner cities.  Without FHA insurance, no reputable bank would issue a home loan to someone living on the other side of the “color line.” This in turn had a host of social and cultural impacts, from resource-poor schools to lack of jobs because businesses would not build where the FHA would not write loans.

You don’t need to be a systems modeler to see how each of these came to feed on each other. In the last decade scholars have begun to refer to this as “structural racism,” by which they mean a convergence of forces and policies that conspires to sustain the color line. Just imagine one systemic loop: you cannot get a good job because you live in a neighborhood with substandard housing and were educated in a substandard school and so you cannot qualify for a loan for better housing which in turn further reinforces the substandard housing. Structural racism is also not a bad metaphor, either, for it suggests the immense weight of these multiple factors that presses down on people living inside those red lines drawn by the FHA.

Where legitimate businesses and institutions are prevented from entering, illegitimate ones will grow. Since regular banks would not lend to people of color in inner city neighborhoods and FHA policies kept them from lending to the few people of color who could afford suburban housing, there obviously was a need for someone to supply these loans and so we have the growth of the so-called subprime market, only back in those days they were known as loan sharks and other unprintable words and had reputation to rival check cashing operations, greedy landlords and take and bake furniture renters. Anyone who has grown up in the inner city can tell stories not only about price-gouging home loans, but high-priced loans for everything from cars to buying furniture or clothes on credit.

What Is Subprime Lending

Subprime lending is a mixture of old-fashioned altruism and blatant thievery with an American twist. Some entered into the business of making loans to people of color because they genuinely believed people deserved an equal opportunity, others saw a chance to make a quick buck. The reality of the situation was that without FHA insurance even the most well-meaning lenders still had to charge more than they would have for a white suburban home-buyer.

A 2003 study for the Lawyers Committee on Civil Rights Under Law reported:

While red-lining has served to exclude poor and minority residents from the benefits of mainstream mortgage lending, purveyors of predatory lending (or so-called “reverse red-lining”) practices have targeted many of the same poor and minority households that traditional lending institutions have ignored or excluded.

In testimony before the House Committee on Banking and Financial Services in 2000 Bill Brennan of the Atlanta Legal Aid Society outlined how subprime lending works for lenders:

Here is what these companies do, the predators. They overcharge on interest and points, they charge egregiously high annual interest and prepaid finance charges, points, which are not justified by the risk involved, because these loans are collateralized by valuable real estate.

Since they usually only lend at 70 to 80 percent loan-to-value ratios, they have a 20 to 30 percent cushion to protect them if they have to foreclose. They usually always buy at the foreclosure sale and pay off the debt and sell the house for a profit.

As for those taking out the loans, Gary Gensler, Undersecretary for Domestic Finance at the treasury Department, told the same Committee:

Borrowers in these markets often have limited access to mainstream financial services. This leads to two things, as the Senator said earlier. Some borrowers who really would qualify for prime loans-we estimate anywhere between 15 and 35 percent of the subprime market could qualify for prime and cannot get that prime loan. Second, the rate and term competition is limited. Subprime lenders don’t tend to compete as much on price.

Beyond preying on vulnerable populations, beyond the limited access to mainstream financial services, is that abusive practices tend to be coupled with high-pressure sales tactics, whether by a mortgage broker, a home improvement contractor, sometimes a lender themselves in the local community.

Perhaps the most extensive and longest longitudinal study of predatory lending practices has been the Woodstock Institute’s periodic reports on Chicago.  It’s 1999 report “Two Steps Back” was among the earliest to blow the whistle on predatory lending.  They found:

Documented cases of abuse include fees exceeding 10 percent of the loan amount, payments structured so that they do not even cover interest (resulting in increasing principle balances), and flipping a loan numerous times in a couple of years.

At the same time, lending to lower-income and minority communities is often viewed as an isolated line of business, in which the focus is on the short term transaction and associated fees. Lenders active in such communities tend to be mortgage and finance companies subject to much less regulation than banks and thrifts. The increased scale of the subprime industry itself has resulted in a larger number of abuses. Moreover, there has not been a proportionate increase in regulation or regulatory resources devoted to this new industry.

As usual, graphs and tables tell the story in black and white:





The date on the graph may be a little difficult to see. It is 1998. On the first table, the percentage of subprime loans going to African American communities is 53%. Only 9% went to predominantly white communities. The Woodstock study went on to deal with the obvious question: is it race or income that is the strongest determinant of who receives a subprime loan? They found it was the former:

Thus, whether a neighborhood is predominantly African-American explains the greatest amount of variation in subprime lending,

The Final Results

In 1997 Bill Brennan could tell the New York Times:

We have financial apartheid in our country. We have low-income, often minority borrowers,  who are charged unconscionably high interest rates, either directly or indirectly through the cover of added charges.

Three years later Census data would confirm Brennan’s charge. The Lawyers Committee on Civil Rights Under Law found:

The typical white person lives in a neighborhood that is overwhelmingly white, with a few minorities (80.2% white, 6.7% African American, 7.9% Hispanic American, and 3.9% Asian American), the typical African American lives in a neighborhood that is mostly black (51.4% black, 33.0% white, 11.4% Hispanic American, and 3.3% Asian American). By comparison, the typical Hispanic American lives in a neighborhood that is more evenly Hispanic American and white (45.5% Hispanic, 36.5% white, 10.8% black, and 5.9% Asian American); and the typical Asian American lives in a neighborhood that is mostly white (17.9% Asian American, 54% white, 9.2%  black, and 17.4% Hispanic American).

In a study released this year by United for a Fair Economy, the authors note:

According to federal data, people of color are more than three times more likely to have subprime loans: high-cost loans account for 55% of loans to Blacks, but only 17% of loans to Whites.

This is a decade after the Woodstock study identified a similar pattern in Chicago.

Reflections

This history makes you wonder what kind of country we might have become had racism not pervaded the home mortgage market. The United for a Fair Economy study puts it eloquently:

While the housing crisis has affected all sectors of society, it has disproportionately affected communities and individuals of color. For them, the dream that Martin Luther King, Jr. once spoke of has been foreclosed.

Now the injustices white America heaped on black America for half a century have come home to roost. The sobering thought to ponder is that what you have read so far is merely the very tip of a rather large iceberg, for there are literally dozens and dozens of books and countless articles on racism and housing. If you enter “racism” and “housing” in Google you will find over four million entries. Yet despite over half a century of studies, reports and papers about discriminatory lending, little was done about it.

The most damning piece of evidence in this entire story is not that racism fostered predatory loans, but that like organized crime going from petty bootleggers and drug dealers to big time operators, the practice of predatory loan sharking expanded and went mainstream– moving from being the providence of small-time shady operators to mainstream banks. Essentially, loan-sharking cast off its sleazy past and the bigger it became the more people looked the other way.

That is until it suddenly threatens to take down the entire American economy. Now like the figures in that painting of Constitution Hall, fingers are pointing and people are staring.

If racism played a big role in creating the mortgage crisis, the solution to our current problems will prove tougher to deal with than what the so-called experts have been telling us. We could be witnessing the fourth American revolution. The first was the war for independence, the second the Civil War, the third the Great Depression and now the present crisis which combines the themes of the previous two–race and economics.

The next essay in this series focuses on how we got here and why, for only by understanding that journey can we see a way out of the current morass. What is clear so far is that this crisis is not merely the fault of a few misguided CEOs, but rather the culmination of decades of discrimination in which all of us are culpable.

Now the time has come to stop pretending there is no elephant in the room and deal with it.

Resources

For a good bibliography on the subject click here.

Crossposts: The Strange Death of Liberal America, My Left Wing, Progressive Historians, The Wild, Wild Left

Hillary Clinton, Geraldine Ferraro, the Campaign, and Medical Coverage Issues



Keith Olbermann Special Comment on Hillary Clinton

copyright © 2008 Betsy L. Angert

Talk abounds.  Hillary Clinton, her campaign, and the comments made by Geraldine Ferraro are being discussed on every avenue.  The former First Lady states we need to return to what is more real and relevant.  I concur.  Hence, I invite us to again consider Universal Health Care Plans or the prospect of what is not and will not be if we adopt the “Choice” proposal Hillary Clinton presents.

Rarely do I pen a missive with little research or one that relates more to the personal than the profound.  However, today I wish to take a moment to muse of what is for me, a reality.  Dear reader you may have read the intimate details of my life, or more accurately my history with medical insurance, or the lack thereof.  In Health Care in America; Uninsured, Underinsured, Universal Woes I disclosed what has been true for me, as an adult for all but a year.  Although I was, am, and intend to be a well-educated, professional person, employed, and by all appearances extremely healthy, I have lived life on the edge.

I am among millions of persons in the United States of America that is forced to think, “What if . . .?”  When the unexpected occurs, I must face more than my fears of injury and illness.  I need to gather the strength to heal a financial folly caused by the circumstances prevalent in a country that claims to care for its citizens, and yet, does not.  I could go on and provide details offered in my earlier essay; however, there is no time today.

I need to scurry.  As corporations make many necessary cuts, I again find myself among the millions affected.  Most of my life, I was with those uninsured and I may return to that group.  Threatened by the loss of health care coverage, I must quickly travel to the doctor’s office, if only to ensure my peace of mind.  The diagnosis I seek is validation.  I hope to verify that for now, I am healthy.  Thus, I apologize for being away most of today.

I offer what I think an interesting discussion stimulated by Keith Olbermann’s tirade.  Bombarded with a barrage of barbs in reference to Geraldine Ferraro and her racial, sexist, silly references, Presidential aspirant Hillary Clinton declared . . .

“It is regrettable that any of our supporters on both sides, because we’ve both had that experience, say things that kind of veer off into the personal.

“We ought to keep this on the issues,” Mrs. Clinton said.  “There are differences between us.  There are differences between our approaches on health care, on energy, on our experience, on our results that we’ve produced for people.  That’s what this campaign should be about.”

Please Senator Clinton, let us have the conversation you think most important.  May we chat about your approach to health care.  Later, perhaps, after my doctor’s appointment we can focus on the folly of energy and “experience.”

Hillary Clinton, while what I am about to say may not seem to pertain to health care, it does.  You continue to harp on claims that you are more qualified than Barack Obama.  You state that he has yet to cross over the threshold of Commander-In-Chief.  Silly and absurd as this assessment may be, it brings to mind your plan for “Universal” Health Care.  Separate from the speeches you or Barack Obama offer, I find ample reason to question your supposed “correct” solution for Americans such as I that are uninsured, underinsured, or are about to lose the insurance they have.  

Senator Clinton, you have yet to authentically address the concerns that affect the common citizen.  To force me to purchase what I have never been paid enough to afford, and will once again forfeit, matters, at least to me.  Be I a Black person, insulted by the remarks your close friend and a former member of your vast financial committee made or a white woman who is supposed to understand gender bias, either way, I cannot support your stance on Health Care.

Keith Olbermann may question whether you, Hillary Clinton, are affected by your advisors, and hence, have recently been led astray.  I do not.  My experience is that from the first Hillary Clinton, as a Senator, and as a First Lady, you have never provided the answers to what is a  paradox for the American public.

Throughout this campaign, you have obfuscated, just as you did more than a decade ago in the White House.  In meetings, closed to the community, you created a culture of conflict.  It appears that is your history, your experience.

I invite you Senator Clinton to contemplate the words of Jamie Court voice long before the recent brush up.  Mister Court spoke of your signature Health Care Plan, the price, and the coverage.  He attended to issue, as I wish you had or would.

Mandatory health care won’t curb costs,

What do Mitt Romney, Arnold Schwarzenegger, and Hillary Clinton all have in common?  They all support the government forcing the middle class to buy a private health insurance policy — but none want to limit how much insurers can charge or spend.

And that’s the problem. Mandatory private health insurance proposals are all stick and no carrot.

The average health insurance premium for a family of four is just over 12 grand per year. What middle-class family making, say, 60,000 bucks per year can afford that bill?

What we need is the carrot of affordable health care. That means government standardizing charges by insurers, doctors, hospitals, and drug companies. No more $6 Tylenol in the hospital.

The reason health insurance is so unaffordable today is that no one is watching the costs. With standardization, insurance would be cheaper and people would want to buy it — not have to because the government is threatening them with a tax penalty.

Oh wait, I can hear the plaintive cry of the free market. You can’t tell a doctor, insurer, hospital, or drug company what’s reasonable to charge. That’s socialism. Well, how reasonable then is it to tell every American you have to buy a product whose cost is obscene if you want to be a U.S. citizen? Isn’t that corporate socialism?

Mandatory health insurance is a government bailout of a free market that’s failed its customers. Fewer people and employers are buying private health insurance because it costs so much more and delivers so little.

So rather than let customers demand a new and better product, politicians are forcing us to buy it. Whatever happened to creative destruction?

There’s a business plan of course. Mitt, Arnold and Hillary each received six or seven-figure campaign contributions from the insurance industry. The plan is insurers send the bill and we have to pay it.

Jamie Court is president of the Foundation for Taxpayer and Consumer Rights.

Yikes, I am late, just as the conversation you Senator Clinton promised us is ,  Please let all of America speak of the issue that is most real to millions such as me.  Health Care proposals presented by the Presidential hopefuls do nothing to alleviate the pain of the uninsured, underinsured, or soon to be without coverage.

Senator Clinton, at least with Barack Obama’s Health Care Plan there are no false assertions or assurances that all will be covered.  I prefer the truth.  When a person is honest, the consequences are great.  I experience Barack Obama has integrity, although admittedly his Health Insurance plan does not provide for the people.  Veracity alone is a quality that gives me reason to hope.  If a change is proposed, I can have some faith the submission will be sincere.

First Lady Clinton, if you have found your voice, please use it to speak to real people about issues that are relevant to their daily lives.  Do not tell us you are ready to command [the troops] when persons such as I need Health Care.  We, the people crave a plan that is genuinely Universal, not one that maintains profits for the Pharmaceuticals and Insurers who contribute to your campaign.  

Senator Clinton, when you are ready to devote your “energy” and “experience” to the “issues” that effect average people such as me, each and every day, then, maybe we can have that conversation you proposed when you first declared your candidacy.  For now, you repeatedly state you are “in,” and all I see is that you, or perchance, your plan to insure Americans is  outrageous, out of touch with those who have no health care options, and out of the luck Geraldine Ferraro believes Barack Obama has.  

I believe we create our own destiny. It is not the color of Barack Obama’s skin that is his good fortune, Senator Clinton.  It is his ability to reflect, relate, and be real rather than simply say “get real,” as though that were the cure for what ails America.  Senator Obama’s Health care Plan is seriously flawed; however, Presidential hopeful Obama does not give us the false impression that if he is elected, we all will be covered.  

First Lady Clinton, a time ago you stated for you, this is personal.  Please know, for me, it is as well.  I need to know honestly that the President of my country is concerned for the commonweal and will represent me.  My health, and whether I am able to receive medical care, is a very personal issue.   Rather than rant or rage against a person’s race, let us speak of Single Payer, Not For Profit Universal Health Care.

Sources; A Choice Health Care Plan that does not heal . . .

Clinton and Obama Offer Universal Health Care Plans; No Insurance



Clinton Obama Cleveland Ohio Debate – Health Care Battle

copyright © 2008 Betsy L. Angert

Senators Clinton and Obama, bicker as you might, neither of you have proposed Universal Health Care plans.  Those who support you [plural] state a semantic argument attests to your authenticity.  Many espouse “universal” means “to affect, relate to, or include the whole.”  Granted, all Americans will be changed by your plans.  However, not everyone will be insured if either proposal is implemented.  

Indeed, every United States citizen can connect to the need for coverage.  Universally, we recognize we are in quite a predicament.  Whatever options are offered, the entire electorate will be forced to consider a personal response.  Universality, or an appeal to the aggregate, perhaps better defines what each of you have designed or delivered.

Have you Hillary Clinton or you Barack Obama introduced an actual Universal Health Care plan?  No.  Constituents concerns will be integrated into the agenda.  However, the proposals you have presented to the public, do Not guarantee that life for those who currently are without health insurance will be any better than it is now.  The only certainty Americans have is that some of what is will be altered, just slightly.  

Insurers will still control costs.  Pharmaceuticals can continue to profit, and the poor persons in Middle America will remain insecure, underinsured, and yes, even uninsured.  As one who for most of my adult life has not had insurance, I can assure you, that if a person lives paycheck-to-paycheck, they cannot afford insurance at any price!

I could recount the times that I lay writhing in pain, slipping in and out of consciousness; yet, unwilling to call for help for I feared the cost.  I might share the stories of how or when I went without treatment for the financial expense seemed far greater than the physical toll on my body.  I might mention my fear of an accident, or an age related concern that I need to attend to.  Preventative medicine, pooh-pooh.  I am among many who hope that my mind will control the matter.

I am among millions who still feel the repercussions of decisions made in the 1990’s.  You may remember then, the headlines screamed of the impending crisis.  Employers Winning Wide Leeway to Cut Medical Insurance Benefits.  People cringed.  The then President stepped in.  I am certain Senator Clinton you recall the day.  Bill Clinton appointed his wife to head a panel, which promised to better circumstances.  

Yet, fight as you say you did Hillary Clinton your combative energies did not cure what ails society.  What was, is.  Circumstances convened more than a decade ago continue unchecked.  So long ago, Americans read of a reality they lived.  Today, this phenomenon is normal.

A rapidly growing number of victims of cancer, AIDS and other serious illnesses are discovering that under recent court interpretations of a law that was originally intended to protect employees’ benefits, their insurance coverage can evaporate when they need it most.

The recent [1992] Federal court rulings have given employers that now act as their own insurers wide leeway to cut back on existing coverage — or to skimp on coverage in the first place.  These “self-insured” employers, a large majority of companies from giant corporations to an increasing number of smaller businesses, have been exempted from state insurance laws governing what ailments insurance companies must cover. . .

At the same time, a Supreme Court decision has made it much harder for patients under all kinds of health insurance plans to sue to get benefits they say have been unfairly denied . . .

In effect, the court rulings and the health plans that take advantage of them are another manifestation of a system of private health insurance in which the sick are increasingly separated from the well.

Americans have no assurance that this situation will improve.  Actually, there is ample evidence to indicate it will not.  The prospects for business are grim.  The economy suffers, as do the people.

The economic situation has become distinctly less favorable since the time of our July [2007] report.  Strains in financial markets, which first became evident late last summer, have persisted; and pressures on bank capital and the continued poor functioning of markets for securitized credit have led to tighter credit conditions for many households and businesses.

Slowing job creation is yet another potential drag on household spending. . .

The risks to this outlook remain to the downside.  The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.

Lest we forget, illness is the cause for one half of all personal bankruptcies.  Most of those who are infirm realized they cannot cover the debt.  These persons have health insurance.  A Harvard University study, conducted in 2005 revealed the inadequacy of many private insurance plans.  Doctors and lawyers examined the current crisis and offered, many policies offer worst-case catastrophic coverage, but little financial security for less severe illnesses.

“Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” said Dr. David Himmelstein, the study’s lead author and an associate professor of medicine.  “Most of the medically bankrupt were average Americans who happened to get sick.”

Steffie Woolhandler, Associate Professor of Medicine at Harvard Medical School, in an interview with the Chicago Tribune, described what many of us know but do not wish to discuss.  

“Our study is fairly shocking.  We found that, too often, private health insurance is an umbrella that melts in the rain.”

Certainly, Senators Clinton and Obama you have not touched on this tender taboo in your “debate” rhetoric.  Businesses bleed.  Benefits hemorrhage; and Americans lose Health Care coverage, financial stability, or their lives.  The “Universal” not health care for all plans you each offer exacerbate or ignore what is.  Employment is provisional.  Company provided Health Insurance is more and more a luxury.  When institutions do offer the option, an individual is expected to pay a large part of the expense.  As Americans assess the plans put forth, if they bother to, your [plural] proposed policies do not offer much relief.  Sadly, for countless of the under or uninsured voters, such as I, we have been down so long, now a discussion looks like up.  In truth, talk is cheap.

Mandates that require a citizen with an uncertain salary to provide for their personal insurance needs will leave many in a legal predicament.  For the millions who struggle to survive lower rates bring them no hope.

As prices for fuel, food, and shelter rise, those who could not afford to go to the movie theatre, buy clothing, dine away from home, or vacation certainly will not find the funds to purchase medical insurance,  Gainfully, employed citizens who cannot afford to purchase beyond the basics will not be able to pay for coverage.  The tens of millions who fear a minor fall, for they know, even one Emergency Room visit can break the bank will not be moved to purchase what remains out of reach.  Please Senators, before you begin your ascent to the Oval Office reflect on what is real for most Americans.

[O]f the 47 million uninsured people in the United States, 7.3 million come from families with incomes of $75,000 or more, and an additional 6.9 million earn between $50,000 and $75,000, according to 2006 census estimates.

Some of those with moderate or high incomes may have been shut out of the insurance market because of age or pre-existing health conditions.  Researchers believe a majority are self-employed or among the growing number of Americans whose employers do not offer affordable insurance.  Their only insurance options may be high-priced individual policies.

Those comfortably covered love to discuss the individuals who waste their dollars or do not pay for what they believe they do not, or will not need.  In a recent New York Times report readers were introduced to a twenty-three year old lovely who believed she paid her way through taxes.  She smiled and spoke of the free medical clinics available to her.  Ms. Coons mused,

“I’m young and in pretty good shape,” Ms. Coons said one recent afternoon, on her way to the treadmill at the Fitness Factory in Midtown Atlanta.  “I looked at Blue Cross Blue Shield.  But the only thing I could see myself really needing it for are prescriptions and dental  . . .

She continued, “The insurance premium was more than what I would pay for my prescriptions, so I just decided not to deal with it.”

Times journalists asked Americans to consider the circumstances of those who use the system and do not pay premiums.  Fraud was implied, or a “free ride” was defined and accounted for.

Many free riders are assumed to be young and at little risk of major illness, but they do consume health care.  A recent analysis by the New America Foundation, a Washington policy group, found that 16 percent of the patients who received uncompensated medical care in 2004 had family incomes of at least four times the federal poverty level (which would currently be $41,600 for an individual and $84,800 for a family of four).

They accounted for $5.8 billion of the estimated $41.4 billion in uncompensated care that year.

However, what was not discussed was the ounce of prevention and the pounds paid for a hopeful cure.  Ms. Coons might have been me years ago.  She may not have stated or contemplated an illness, or unexpected injury.  I too appeared fit.  An interviewer might have seen me on the way to the pool.  He may inquire of my Health Insurance plan, or lack there of.  I, possibly would not have explained that I severely injured my back long ago, and then, due to the damage lost my job.  At the time, my employer feared medical charges I might incur, and now I must swim daily to remain physically stable.

In embarrassment, in my youth, I could have, would have, given a glib response.  For decades, I did not wish to speak with strangers of the bulimia I battled.  The preexisting condition that I paid for dearly, helped to affirm medical coverage was not available to me.

I know not of Ms. Coons.  I can only speak for myself.  Bulimia or other “disorders” do not burden my life today.  I do not imbibe any alcoholic beverages.  I never did.  Drugs do not deliver me from depression or dismay.  Prescription and street fare were not my medications of choice.  I have no addictions to strain my budget.  I am but one of millions who scrimps, wishes to save, finds it futile, and fears the veracity.

[T]here is also a shift to the privately insured.  Hospitals and doctors raise their fees to compensate for the losses they incur by treating uninsured and underinsured patients, and insurers pass those increases along to consumers.  A 2005 study found that the shift added 8.5 percent to the average premium.

Presidential aspirants, please ponder what the pundits have not.  Numbers on paper may look lovely.  Economists can scribble statistics on scratch paper.  Power Point presentations can graph the details in glorious color.  Experts can pen impressive essays, and America trusts that you, the candidates can eloquently deliver the text.  Yet, as you may know . . .

Neither campaign has provided enough detail about its plan to enable more than guesswork about how it might influence consumers . . . They have not detailed what kind of subsidies would be needed or who would be entitled to them.  Mrs. Clinton has not fully explained how she would make everyone comply with her plan or exactly how she would cap the amount a family would have to spend on premiums.

Each candidate would raise the money needed to subsidize premiums by rolling back President Bush’s tax cuts for high earners, taxing businesses that do not insure their workers and reducing costs through electronic record keeping, preventive medicine and chronic disease management.

But there is little certainty about how much those initiatives might save, or when. . . .  There are also questions about whether the new savings and tax increases would be enough to subsidize insurance for all who need help.

Both candidates are backed by teams of prominent economists from top universities and policy groups.  But with little real-world precedent to guide them, their assessments are necessarily an amalgam of statistical modeling and back-of-the-envelope calculation.

“In a campaign, people put out proposals that aren’t highly specified, that don’t have enough detail to model them effectively,” said E. Richard Brown, director of the Center for Health Policy Research at the University of California, Los Angeles, and an Obama adviser.  “These numbers are based on a lot of assumptions.”

In speeches, debates and dueling advertisements, Mrs. Clinton and Mr. Obama have brandished projections that even their originators acknowledge are tenuous.

Senators Clinton and Obama, when your own authoritative advisors admit the claims are unsubstantiated, formulas are fragile, and the numbers are shaky, there is reason for concern. Stalwart as you each may be, this character trait may not be a strength in times such as these.  Lives are at stake.  Illness and injuries occur in every moment.  Accidents are not preventable.  People bleed as the two of you argue over the specifics of inadequate agendas.  

If you truly wish to insure every American, be honest with yourselves and us [the citizens of the United States].  The only genuine Universal Health Care Plan is a Single Payer, Not For Profit program.

Your passionate pleas, your tears, and talk do not comfort a citizenry or a system sick and in dire need of help.  Please, feel our pain and protect us.  We, the people need a President that cares.  Provide the preventive, practical, and profound programs.  Do not continue to play with language.  We the people languish, as either of you smile and say, “My plan provides Universal Health Insurance.”  I could just cry, but I worry.  What if I were to weep endlessly?  Dehydration might send me to the hospital.  I cannot afford to see a physician, let alone the premiums you [plural] wish to charge me.

Universal Woes; Wounds, Worry, and the Source of Scars . . .

Location – Location – Location; Superdome or Qualcomm Stadium?

copyright © 2007 Judith Moriarty

Booker Harris and his wife Allie are not household names.  There has been no round the clock coverage of Mr. Booker, age 91, who was deposited in a lawn chair, in front of the Superdome, during Katrina.  Mr. Booker died there of dehydration, shock, neglect, and racism of the first order.  Allie, age 93, his frail wife, sat at his side munching on crackers, unaware of her surroundings, or the death of her husband.

They’d survived wars, the Great Depression, the KKK, segregated water fountains/restaurants, schools, housing, red neck Southern sheriffs, numerous floods, and hurricanes.  What they didn’t survive was the contemptible corruption, and gentrification by disaster, of the 21st century.  What they didn’t survive, was a nation that boasts of dancing amongst the stars, visiting distant planets, yet is incapable of building a levee here on earth?

What Allie and Booker did not survive, was the hypocrisy of the media,  that showed some fool who ripped off a plasma TV, making his way through the flood waters (over and over).  To date,  we have not seen similar video footage of duffel bags filled with multi-billions that have gone missing in Iraq?  We have seen local TV cameras,  chasing a recipient  of food stamps down the street,  daring to obtain more than her one allotted book.  To date,  there has been no rational explanation, as to where the $2.3 trillion,  that Donald Rumsfeld reported was unaccounted for on Sept 10-2001.  There’s thievery and then there’s plunder.  It’s a black and white thing.  The poor go to jail, while the rich get dream teams, have convenient heart attacks, or get executive pardons.

What the Harris couple didn’t survive was a nation with a non-existent disaster plan (absent bunkers for the elite/chosen politicians).These are the photographs that the media did not  show over and over again on TV. 

Location – Location – Location: If one were to be given a choice, of where they might want to experience a disaster, they would definitely want to reside in an area of the wealthy/famous.  Disaster has its own class act – as does greater society.  It’s something not spoken of – this class issue.  Better to instigate turmoil and chaos pitting victims against victims., thus excusing the corporate hucksters (rich and the shameless); of their insatiable greed and depraved indifference.  The majority of folks, who lost everything during Katrina,  were the working poor, the dispossessed, the handicapped, and elderly.  Ordinary people.

The media presented the gullible masses with rumors of rapes, murders, and mayhem.  This was proved to be false by military personnel who entered  days later.  Naturally, this did not make headline news.  Why the subterfuge?  Maybe because such reports were a perfect excuse to send in the military and Blackwater mercenary forces, to evict the unwilling (homes not flooded) and to confiscate legal firearms so that citizens couldn’t defend their homes?

The fires in California (2007) saw the multi-million dollar mansions, seaside homes, and gated communities of Orange County, threatened by fire.  Fire, that is a known threat in this area of heavy brush and yearly windstorms.  Nobody blamed the residents (except George Carlin) for bringing this disaster upon themselves.  Most of the nation is unfamiliar with the great disparity that exists in California.  No homeless people reside on the streets of San Diego.  There are no unsightly tenements, clinics, or trailer parks.

Orange County is a place of exclusive homes, in gated communities, with their own schools, shopping and security forces.  Gated communities, next to gated communities.  Who are they gating out?  Robert Bellah, who wrote Habit of the Heart, states, “The underclass gives people something to define themselves against; it tells them what they are not; it tells them what it would be most fearful to become.  And it gives them people to blame.”  The gated communities of today are a powerful tangible symbol of the division between the underclass and everyone else.  To be upper middle class – wealthy is to be trustworthy, law – abiding and in need of protection from violent scavenging poor people.  Or conversely, to be poor, is to be violent and depraved – a threat to the rich.  Such construction of class differences paints poor people in a highly distorted manner.  This is deliberate.  Easier to blame the poor than those in designer suits and $400.00 haircuts, for one’s problems, lack of employment etc.  Besides,  the poor are more readily available to blame and attack.  You’ll not be welcome with your petitions or protests  in gated communities, country clubs, or the headquarters of gluttonous, corporate CEOs.  They keep themselves far removed from the unsavory things of life (namely the poor).

These gated communities are a tangible symbol of the fear and ignorance that divides upper class people from the working class and poor.  This fear is expressed with fences, walls, guards, dogs, alarms, private bodyguards etc.  In other areas of the country, this bias is less visible.  Instead, exclusive towns, tourist meccas, and post card villages, exclude the unwanted by cost, no affordable rentals, zoning restrictions  etc.  We are fast becoming a nation of isolated islands.  The poor and working class (needed as mechanics, laborers, maids, waitresses, parking valets, carpenters, brick layers, roofers etc) are kept out of sight, in trailer parks or poorer – socio – economic areas.  It is to these places that the wealthy send their refuse to be burned or dumped, build their coal plants, nuclear facilities, chemical plants, and incinerators.

An incinerator will never be built in downtown San Diego, Jackson Hole Wyoming, or in downtown Kennebunkport, Maine etc.  All animals are not equal.  Some are identified as ‘acceptable risks’ or ‘collateral damage’.  Their purpose in life (unspoken) is to serve the greater good.  Mainly to make life more amenable and lucrative for the obscenely wealthy.  Only the children of the working poor  (East Liverpool, Ohio) would be subjected to a toxic incinerator situated next to a schoolyard.  Imagine the outrage if an incinerator was located next to a private school with its soccer fields, or an exclusive yacht club, or golf course  etc?  Part of an ‘Inconvenient Truth’, is that Al Gore (running for election with Clinton) promised these folks that such an outrage would never happen.  He promised  (if elected) to  stop it.  Clinton got elected and they both forgot East Liverpool, Ohio.  What a shock!!

I noticed that during the catastrophe of the California fires, that those attempting to escape were not forced back into the flames.  Many watching the disaster in New Orleans wondered why people didn’t just leave on  foot (those who were able)?  The Louisiana Superdome is less than two miles from a bridge that leads over the Mississippi River out of the city. 

The answer: Any group of people attempting to do so were met by police who fired their guns to disperse the group and contain them.  Around 500 people stuck in downtown New Orleans banded together in self-protection making sure that the oldest and youngest were taken care of.  Two San Francisco paramedics who had been attending a convention were with this group and  reported their trauma on CNN (once).

They made their way on foot over Highway 90, which crosses the Mississippi River from New Orleans to the suburb of Gretna (not flooded).  This is an upscale community for professionals etc, who work in New Orleans.  Much like Greenwich, CT, is to New York City.  The crowd had grown to approximately 800 people.  As they approached the bridge, the police fired their weapons over the people’s heads, driving them back into the floodwaters.

When the paramedics (white) questioned the sheriff as to why they were not being permitted to cross the bridge to dry ground, he replied that Gretna was not going to become a New Orleans and there would be no Superdome in Gretna.  Gretna Police Chief Arthur Lawson, in an interview with UPI stated, “If we had opened the bridge our town would have looked like New Orleans..”  Months  later, after the flood and the news crews had left, seven New Orleans police officers were indicted by a grand jury on charges of murder and attempted murder for shooting unarmed citizens  as they attempted to cross a bridge to dry ground.  One of those killed was mentally – retarded, the other was a young student,  who had become separated from his parents.  No such shootings of civilians attempting to escape in California were reported.

The New Orleans Superdome was chaotic.  People fled there to escape the floodwaters (broken levees).  The heat was intolerable.  There were no lights, the toilets all backed up (sewage treatment plant not working) and were overflowing.  There was no food and no medicine.  Many elderly, in need of heart medicines and insulin, etc, were left stranded.  Babies were without formula and nourishment.  While we have all watched reports of our feats in space – it appears, that here on earth, with all our ingenuity, we were unable to reach New Orleans for days!!  Dogs were seen eating the bloated bodies, floating in the snake infested polluted waters.  In California, efforts were made to save the animals.  A special shelter area was set up to attend their needs.  The animals in California fared much better than any human in New Orleans & Mississippi.

The federal, state, and local officials spent their time blaming one another, as the people died in attics, drowned in floodwaters, or were being shot at by police.  Here it is two years later and New Orleans is still a wasteland (areas where the working poor once lived).  There is no affordable housing, schools, or hospitals.  Truth is, the hundreds of thousands of New Orleans citizens, scattered across the nation will not be going home.  There’s nothing being done to welcome them!  Most likely, the wealthy will have their way and realize a New Orleans Mardi Gras theme resort, with high-end condos, hotels, casinos, and convention centers.

Imagine yourself being born and raised in the bayou and finding yourself shipped off to Idaho, Maine, or the streets of Washington D.C. etc?  This is what happened to tens of thousands.  We have become desensitized to the traumas of others outside our own narrow interests.  There is no civilization when people have lost their sense of outrage or are without conscience.

Meantime a stadium in San Diego saw the difference in response to a crisis.  In the case of the California fires, citizens weren’t left in the inferno.  They weren’t gunned down trying to escape.  They weren’t blamed for their stupidity for living in an area known for its disasters.  They weren’t parked on nearby highways and told to wait for days for assistance.  No, instead, the Qualcomm Stadium had a carnival like atmosphere about it.  Citizens (well insured) weren’t being bussed off to distant states.  While New Orleans, citizens sat in stadium seats, in the dark, with rain pouring in from a damaged roof, the folks in California had cots, showers, and an infirmary.

There were three bands, a ‘Kids Zone’, stacks of diapers, baby wipes, formula, and gallons of water, with gourmet meals served up by local restaurants.  Massage, counseling, and acupuncture, were offered to those traumatized and stressed out.  Tents were set up to assist people in contacting their insurance companies, lawyers and contractors.  One woman stated, “Now we have to deal with our insurance company and lawyers We Californians are a resilient people.  We’re going to rebuild and have the biggest house on the block.”  They went on to complain of the inconvenience of having to stay in a luxurious hotel.

What wasn’t shown (brief reports) were the hundreds of homes that were saved, due to contracts that homeowners had with private fire companies.  These private companies respond in such emergencies with a fire retardant gel (new to the market) that protects homes in the most intense of fires.  Afterwards, power washing, washes away this bi-degradable protection.  Cost of premiums for this is $10,000 a year.  Many on the Gulf Coast, from Mississippi to New Orleans, two years later, are still fighting for insurance payments.  They are told that the damages they received were from wind and not flood damage, and therefore they cannot collect.  Some had every insurance under the sun and are still being jerked around.  Those in California, with the winds blowing embers for miles, and thus igniting their homes, were not told, “Sorry folks it was the winds not the fire.”

All animals aren’t equal nor are all disasters.  The citizens of the Gulf Coast were discarded much like refuse.  Traumatized, homeless, and penniless, they’ve had to battle on alone.  Meantime President Bush promised the citizens in California that financial help was on the way.  One group of people suffered a disaster of untold suffering.  Another (white) for the most part, experienced an adventure in gourmet-serviced deprivation. 

And Condi Rice?  What advice did she have for the victims of government bungling in New Orleans?  ” The Lord is going to come on time – just wait.” Oh The Humanity.