Could It Be…. Racism?

Here comes another study describing America as “separate and unequal.” White university professors can’t imagine  minorities not wanting to live in the same neighborhood as people like James A. Bacon

One of the ways progressives keep the flames of resentment among racial minorities burning white hot is to highlight purported discrimination in every aspect of American society. They don’t have to actually present concrete evidence that discrimination exists, they just conjure up a statistical disparity and label it a social injustice.

That tactic is on display in a new report published by the US2010 project, “Separate and Unequal: The Neighborhood Gap for Blacks, Hispanics and Asians in Metropolitan America.” The study finds that, even adjusted for income, blacks and Hispanics are more likely to live in poor neighborhoods than whites and Asians. Writes author John R. Logan, a Brown University professor:

With only one exception (the most affluent Asians), minorities at every income level live in poorer neighborhoods than do whites with comparable incomes. Disparities are greatest for the lowest income minorities, and they are much sharper for blacks and Hispanics than for Asians. Affluent blacks and Hispanics live in poorer neighborhoods than whites with working class incomes. There is considerable variation in these patterns across metropolitan regions. But in the 50 metros with the largest black populations, there [are] only two metros where affluent blacks live in neighborhoods that are less poor than those of the average white.

Those, presumably, are the facts. I accept them at face value. What I do not accept is the conclusion drawn from those facts. Going on to argue that poorer neighborhoods tend to have fewer and less desirable amenities than wealthier neighborhoods, Logan implies that the affluent minorities who live in poor neighborhoods are thereby worse off. He obliquely invokes malign influences to explain the disparity (my emphasis):

The low incomes of blacks are not the main source of either residential segregation or disparities in the resources of the neighborhoods where they live. A central new finding is that blacks’ neighborhoods are separate and unequal not because blacks cannot afford homes in better neighborhoods, but because even when they achieve higher incomes they are unable to translate these into residential mobility.

Here’s the worst weasel phrase: “Unable to translate these [higher incomes] into residential mobility.” Logan doesn’t come right out and say that blacks are victims of racial discrimination but he implies it. What other explanation could there be? To twist a turn of phrase from Saturday Night Live’s church lady, “Could it be…. Racism?”

What Logan fails to consider is the possibility that some affluent blacks and Hispanics might choose to live in the neighborhoods they live in, despite the prevalence of poor people. Is it possible that African-Americans prefer to live in their old neighborhoods because — horrors! — they prefer the African-American cultural traits of their neighbors over the cultural traits of white people? Could African-Americans prefer to attend predominantly African-American churches? Could they prefer to patronize restaurants with that serve soul food, hair stylists who specialize in braiding African-American hair and shops that cater to African-American tastes in clothing? Is it conceivable that African-Americans prefer to live near family and friends rather than move to white neighborhoods where they don’t know anyone? In sum, is it possible that racial segregation in American today is — shudder! — overwhelmingly voluntary?

Let’s apply Dr. Logan’s logic to his own institution of higher learning at Brown, an Ivy League university that recruits students nationally. Blacks constitute only 5.8% of Brown’s student body, according to Black Enterprise magazine, even though blacks account for 12.6% of the U.S. population. Clearly, blacks are under-represented at Brown. By Logan’s logic, Brown is a prime example of the “separate and unequal” status of blacks in higher education. The “disparity” must reflect the “inability” to blacks to break into the bastions of progressive white privilege!

Alternatively, let’s play a mental exercise. Let’s imagine that Logan’s results had shown that affluent blacks had moved into affluent white neighborhoods instead of staying in the ‘hood. Would he have stressed the geographic mobility of blacks in American society? Or would he have focused on the fact that the out-migration of affluent blacks rendered poor black neighborhoods even more isolated and poorer than ever, thus highlighting their continued segregation and lack of opportunity? Just a hunch, but I’m betting he would have gone with the interpretation that stresses blacks’ victimhood. It’s what I call the “damned-if-you-do, damned-if-you-don’t” school of thought that predictably extracts from any body of evidence the data that supports the grand narrative of social injustice over data that might undermine it.

If social injustice did not exist, the progressive world view would have to invent it. That’s why you can never take studies like this one at face value.

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14 responses to “Could It Be…. Racism?”

  1. propercharlie Avatar

    Maybe new improved taxpayer-funded Fannie and Freddie can buy no-background-check, no-downpayment mortgages from people who don’t pay their bills. There must be something we can do to close the housing gap. Diversity is strength. What could go wrong?

    I wonder if there will ever be a future when archeologists sift through the remains of ancient America. A place once inhabited, it would appear, by mysterious overseers known as Adults who inflicted horrible destruction on millions upon millions of innocent helots by making them feel bad about themselves. Planet of the Squares.

  2. Peter Galuszka Avatar
    Peter Galuszka

    It could be that minorities in minority neighborhoods cannot sell their properties to move to the white and/or other neighborhoods for all that much money. The social mobility ladder of home ownership doesn’t work for them. Isn’t that the finding of the report? You ignore it. Also, trashing Brown is a cheap shot. Look at home, you Wa hoo- Wa.
    Blow it off, propercharlie. Drumming up Fannie Mae and Freddie Mac racism doesn’t cut it with me.

    Yours truly,
    Peter Galuszka

  3. ample evidence that the rules against redlining had little or not effect on the mortgage crisis which consisted almost totally of mortgages in “hot” housing markets.. not “poor neighborhoods”.

    but where you live sometimes has a lot to do with where you work.

    For instance, minority Federal Employees in the Wash Metro Area do not CHOOSE to live in SE DC.

  4. propercharlie Avatar


    Rather than slander me read this 2006 Harvard study funded by Fannie and Freddie? 

    According to the Joint Center for Housing Studies , “Accounting for nearly two-thirds of household growth in 1995 to 2005, minorities contributed 49 percent of the 12.5 million rise in homeowners over the decade.” . . . “Without the sudden expansion of subprime lending, most of these homeowners would have been denied access to credit.”

  5. propercharlie Avatar

    Or this:

    BOSTON, Oct. 13, 1999 (Reuters) – “The mortgage industry intends to pursue minorities with greater intensity as federal regulators turn up the heat to increase home ownership in underserved groups.

    ‘We need to push into these underserved markets as much as we can,’ said David Glenn, president and chief operating officer of Freddie Mac. Glenn made his remarks at the annual convention of the U.S. Mortgage Banker Association of America (MBA) this week.

    Freddie Mac, like its sister agency Fannie Mae, is a government-chartered corporation that buys mortgages from banks and packages them into securities for investors.

    In September, Freddie Mac launched a new lending program, based on research done in collaboration with five black colleges, to bring more African-Americans into the market.

    The call for greater efforts to broaden minority home ownership comes at a time when interest rates are pinching mortgages. A record $1.5 trillion mortgages were granted in 1998 in a refinancing boom fueled by the lowest interest rates in nearly three decades.

    The federal government in the meantime has increased pressure on lenders to seek out minorities, as well as low-income groups and borrowers with poor credit histories.

    Fannie Mae recently reached an agreement with the U.S. Department of Housing and Urban Development to commit half its business to low-and moderate-income borrowers. That means half the mortgages bought by Fannie Mae would be from those income brackets.  (Based on Reuters, via Builders On-Line 10/13/99, by Richard Leong)[deadlink ]

  6. propercharlie Avatar

    NEW YORK, Sept. 29, 1999 (Reuters) – “The government-chartered mortgage securities company Fannie Mae pledged Tuesday to commit more than $1 billion to boost minority home ownership in Chicago by expanding a program to create more affordable housing.

    Fannie Mae’s CEO Franklin Raines [former Clinton White House advisor] stated he believes such a race-based program is necessary to increase the rate of homeownership by minorities.

    Fannie Mae’s “HouseChicago” program served as a model for the race-based mortgage plan.   “HouseChicago” has funded $10 billion in affordable housing over the course of four years.  (Based on Reuters 09/29/99 via Home Building and Remodeling Network)[deadlink ]

  7. propercharlie Avatar

    Or, especially read this:

    A Freddie Mac study concluding that far more black people have bad credit than white people, even when both have the same incomes, has come under attack in Congress, and some experts have questioned whether it oversimplifies a complex  issue.

    The study’s [Freddie Mac] authors defended their conclusions but said they probably should have chosen language other than “bad credit” or “good credit” because they were trying to say whether people had trouble paying their bills.
    The [Freddie Mac] researchers, relying on data from credit reports, designated people as having “bad credit” if they had two bills overdue more than 30 days in the past two years, one bill more than 90 days late, a lien, a judgment or a bankruptcy. Their data showed that a higher percentage of African Americans with incomes of $65,000 to $75,000 had “bad credit” than whites with incomes below $25,000.(Washington Post 10/05/99 by D’Vera Cohn)[former link **]

  8. propercharlie Avatar

    D’Vera Cohn
    correct link.

    I could go on with many more references to prove my point: The subprime crisis was caused by meddling politicians, Fannie & Freddie, and race hustlers.

  9. Actually, Peter and Propercharlie are saying similar things. Peter makes the argument that more affluent African Americans can’t move out of the ‘hood because their homes have lost value. In confirmation of this hypothesis, there was a recent article describing how African Americans have lost a bigger share of their net worth than whites in the past few years because so much of their net worth was tied up in their houses.

    But there is nothing inconsistent about that observation and Propercharlie’s contention that African Americans have more credit problems that whites with comparable incomes. The two observations go hand in hand.

    Thus, it is entirely possible that the root of the “segregation” that Logan observes is not cultural preference, as I suggested, but difficulties that African Americans have had in qualifying for bigger mortgages.

    There is a good way to test which hypothesis is true (or if both contain a germ of truth). Find out how African Americans were faring before the 2007-2008 housing crash and recession, back when they had access to lots of credit. Were they inclined to stay in neighborhoods with more African Americans, even if the neighborhoods had lower average incomes, or did they move into more affluent, mostly white neighborhoods?

  10. Peter Galuszka Avatar
    Peter Galuszka

    You are ignoring big, big banks and lenders such as Wachovia, B of A, Countrywide, etc. abandoning their restraint and going after the profitable subprime market five or so years ago. Blaming Freddie and Fannie tells a small fraction of the story.

    Peter Galuszka

  11. Groveton Avatar

    It’s a complicated matter. I personally believe that income levels are important but time in the income level is more important. Somebody making between $65,000 and $75,000 a year for the last 10 years (adjusted for inflation) has a different attitude than somebody making $65,000 to $75,000 a year but was making $35,000 a year five years ago.

    For example, propercharlie writes, “Their data showed that a higher percentage of African Americans with incomes of $65,000 to $75,000 had “bad credit” than whites with incomes below $25,000.”.

    I guess I am less than surprised. I am not sure how much of any type of credit was available to people making below $25,000 in 1999. Additionally, I recall that the 1990s saw a rise in the African American middle class. Meaning that African Americans with incomes of $65,000 to $75,000 (in 1999) may not have been earning that level of money for long. So, the comparison is between a group that doesn’t really qualify for substantial credit and a group recently risen to middle class.

    Newly acquired money is always a dangerous thing. At the extreme, look at lottery winners and professional athletes. On a more pedestrian basis, look at people who were starting to make good money in 1999 after a reasonably long run of national prosperity. Why not borrow? What could happen? Oh yeah, that Dot Bomb thing.

  12. is the argument that no-doc and alt A loans were made in higher proportion of minorities?

    Let’s see the specific evidence..

    note this:

    ” Legal and financial experts have noted that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[63][121] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made “perhaps one in four” sub-prime loans, and that “the worst and most widespread abuses occurred in the institutions with the least federal oversight”.[122] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[123] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[124] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures”

    what’s NOT TRUE is that Fannie/Freddie MADE the institutions make bad loans regardless of their skin color.

    note the article: ” “perhaps one in four” sub-prime loans, and that “the worst and most widespread abuses occurred in the institutions with the least federal oversight”

    “… independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.”

    but even beyond this – Congress KNEW in 2006 that credit swaps and mortgage securitization was rampant.. and did nothing to rein in it – because of opposition to more regulation.

    over and over – the folks who argue against regulation and do their best to derail it or cripple it.. will then subsequently point to regulation as having “failed” because …yadda yadda yadda.. the govt is corrupt, evil, incompetent, etc…

    but what’s the real point of propercharlies “points”? what is the essence of his point?

  13. Groveton Avatar

    LarryG continues to miss the big picture. The Federal Reserve Bank’s long run focus on artificially lowering interest rates was the leading cause of our current recession. That Fed folly extended through Republican and Democrat Congresses and administrations. It is the single worst act of governmental regulation in American history. Government mis-management of interest rates is government regulation.

    As for the CRA, LarryG misses quite a few points there as well. Here is a good explanation with lots of links to even more detailed analyses for those who are interested:

    LarryG quotes a Clinton Administration official defending the CRA. In large part, that defense is based on analyzing loans made by banks subject to CRA regulation vs. banks not overtly subject to that regulation. That reminds me a bit of his boss’ fascination with the meaning of the word “is”.

    Here, from the link I provided, is the truth …

    “Finally, the Clinton adminstration threatened to subject the mortgage companies to the CRA if they didn’t comply voluntarily. They promptly agreed to increase their CRA-type lending in order to escape the kind of public scrutiny that comes with official CRA regulated status.”.

    As usual, the Clintons and their toadies will tell any lie to excuse themselves from accountability for their actions.

  14. propercharlie Avatar

    From Steve Sailer’s blog (July 13, 2011, “What Did We Learn, Palmer?”:

    Evidently, nothing.

    Paul Sperry (whose book The Great American Bank Robbery is pretty good) writes in Investor’s Business Daily:

    Justice spokeswoman Xochitl Hinojosa said the anti-discrimination notice “does not compel the banks to make loans to people who do not qualify.” She said such measures are “essential to remedy the harmful effects of the banks’ conduct.”

    But industry analysts fear Attorney General Eric Holder is rekindling an anti-bank witch hunt launched by Attorney General Janet Reno in the 1990s, when Holder served as her deputy.

    Some blame that in part for the subprime boom, because banks were ordered to throw open their lending windows to credit-poor minorities. That crackdown spurred the American Bankers Association to distribute to its thousands of members “fair-lend ing tool kits” advising the adoption of more permissive underwriting criteria to help inoculate them from prosecution.

    In the new prosecutions, Justice acknowledges in every case it did not prove charges of intentional discrimination, while banks have denied any wrongdoing. Many, in fact, earned outstanding ratings from anti-redlining regulators enforcing the Community Reinvestment Act.

    Istook calls Holder’s crusade an “egregious overreach by the government.” He says many of the targets are smaller banks without the resources to fight a protracted legal battle. The House Judiciary Committee plans to investigate.

    “This is an expansion of the law,” said a congressional investigator. “They’re pushing the envelope as far as they can go in the enforcement of civil rights.”

    As part of settlement deals, prosecutors have required banks to sign “nondisclosure agreements” barring them from talking about the methods used to allege discrimination. Bank lawyers contend the prosecutors are trying to hide the shaky legal grounds on which the cases are built. “It’s horrible what they’re doing at the civil rights division,” said Reginald Brown, a partner at Wilmer Hale in Washington, who has represented banks in connection to recent race-bias investigations. “They don’t have any proof, just theories.”

    He added, “They want you to sign something saying you agree, under the condition of any settlement with them, that you won’t disclose what their theories were. That’s because their theories are loopy and wouldn’t stand the light of day.”

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