Baltimore: The Real “Trickle Down” Effect

Baltimore has faded from the frenzied lens of media scrutiny. That doesn’t mean that the rage has abated. Instead, the rage can be heard – festering – in many segments of society. It’s just that many of those communities are spread out and not concentrated in ghettos. Baltimore is a victim of decades of policies designed to pinion black populations into substandard living conditions. The consequence of oppression is rage. Constrained rage feeds on itself and a cycle is born. The results can be seen in a loop on CNN… What isn’t immediately obvious is that a new dangerous underclass is evolving – a “Precariat” class as author Guy Standing calls them.

Photo: Jim Bourg Reuters

Photo: Jim Bourg Reuters

The instability of employment has led to severe economic austerity and this has led to an overwhelming growth of contingent workers. A new, poverty-stricken proletariat is becoming the norm. “Precariousness” will be the hallmark of the digital age and its ramifications will be felt globally. It drills down to inequality, massive economic disparity, and a complete lack of upward social mobility. Economics are dictated by circumstance, not by choice – as neoconservatives would have us believe.

Inextricable from social ideology, is social policy.

Advantage, or “privilege” is insular in the same way poverty is isolating. Someone who has not suffered through impoverished conditions will never comprehend what it’s like to have to make a choice between paying a utility bill and buying groceries. Being poor causes anguish and that eventually turns into rage. It was with these thoughts that I undertook to dissect the events in Baltimore. Following is a two-part post that charts only some of the events that created America’s ghettos

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Inequality Never Takes a Holiday

The history of Black America is too complex to be neatly ordered into digestible sound bites, although the media would have you think that’s possible. To sum up how we arrived at this point cannot be done in 140 characters. As a result, news gatherers seize upon the most sensational images and analysis: a mother beating her son to prevent him from joining a riot, buildings and cars burning, entire communities enraged and defying police. As spectators, it’s easy to identify the police and black communities as antagonists – enemies in a constant battle that has no resolution. These images provide a simplistic framework that works to dilute the complexity of the situation. Yes, the discernible issue underlying Baltimore’s eruption is the death of Freddie Gray while in police custody, but behind this lay an insidious agenda – decades of government polices designed to engineer wealth inequality. Baltimore is a symptom – the result of a long history of enforced polices designed to perpetuate a permanent black underclass.

In 2013, Atlantic correspondent Ta-Nehisi Coates remarked: “If you sought to advantage one group of Americans and disadvantage another, you could scarcely choose a more graceful method than housing discrimination.” In The Ghetto is Public Policy, Coates chronicles how predatory practices supported segregated housing. Prior to the New Deal, restrictive covenants dictated how property could be developed and used. “By the 1920s, deeds in nearly every new housing development in the North prevented the use or ownership of homes by anyone other than ‘the Caucasian race’.” [1] Segregated housing practices sprang from Jim Crow laws and evolved into codified discrimination in Franklin Roosevelt’s “New Deal” federal policies. The legislation created impoverished communities – the ramifications of which can be seen in every black ghetto today.

Photo by Spencer Platt/Getty Images)

NEW YORK, NY – SEPTEMBER 10: A homeless man sleeps under an American Flag blanket on a park bench on September 10, 2013 in the Brooklyn borough of New York City. (Photo by Spencer Platt/Getty Images)

Prior to the New Deal, restrictive covenants dictated how property could be developed and used. “By the 1920s, deeds in nearly every new housing development in the North prevented the use or ownership of homes by anyone other than ‘the Caucasian race’.” [1]  Segregated housing practices sprang from Jim Crow laws and evolved into codified discrimination in Franklin Roosevelt’s “New Deal” federal policies. The legislation created impoverished communities – the ramifications of which can be seen in every black ghetto today. Slavery was only the beginning of reprehensible covenants that would oppress African Americans. The original “race riot” comprised whites and history documents more of these incidents than there is room to cite here. Beginning with slavery – and certainly not ending there – blacks were relegated to a subservient, poor class. The Tulsa race riot in 1921 is but one example of a white race riot that saw the complete destruction of Greenwood – one of the most affluent black neighborhoods at that time – in Tulsa, Oklahoma. A thriving successful infrastructure – considered the “Black Wall Street” of America – was left in ruins after KKK-led mobs demolished homes and businesses. White mobs, comprising thousands, burnt thirty-five blocks of black homes and businesses accruing over 1.5 million dollars in damage. Black men and women were murdered but in the aftermath, no whites were arrested despite boasting of their actions.

By 1921, membership in the Ku Klux Klan was rapidly spreading and the terrorist organization – led by elites, and prominent business men – successfully drove blacks out of politics while gathering nationwide political power [by 1925, more than 2.5 million Americans were members of the Ku Klux Klan]. Acts of intimidation and violence succeeded in perpetuating a state of fear amongst black Americans. Now, we tend to overlook the ramifications of such violent, discriminatory behavior and instead, tout anti-discrimination laws and “affirmative action” as signs that we have adopted a more egalitarian and tolerant mindset. But inextricable from social ideology, is social policy – particularly policy that is devised and enforced by the same people leading the white mob. Since the Klan comprised socially prominent and highly influential politicians [it helped elect state and local officials and at least 20 governors and U.S. senators] [2]

It was no surprise that most Klan members evaded prosecution and conviction. It is can also be no surprise that federal housing legislation – influenced by some of the same men involved in KKK activities – led the way in creating poverty stricken ghettos across America.

Housing Segregation

“Housing determines access to transportation, green spaces, decent schools, decent food, decent jobs, and decent services. Housing affects your chances of being robbed and shot as well as your chances of being stopped and frisked. And housing discrimination is as quiet as it is deadly.” — Ta-Nehisi Coates

Over three hundred and fifty years of slavery, Jim Crow and Black Codes were but precursors of federal legislation that would permanently segregate Black households in major cities. Congress systemized government-sponsored racism in 1934 via creation of the Federal Housing Authority [FHA]. As part of President Franklin Roosevelt’s “New Deal”, the FHA was to bring about relief, recovery and reform [“reform” referring to the regulation of Wall Street and banks] to families after the Great Depression. The imperative was to provide families with options to purchase homes with little or no down payment and affordable mortgage rates. The FHA “revolutionized home ownership” by instituting our current system of mortgages – but the revolution was only available to whites. Blacks were effectively barred from receiving government-backed mortgages and so began the insidious stripping away of the potential to accumulate wealth.

Downshort Drift: What is Poverty in America

Downshore Drift: What is Poverty in America

The Home Owners’ Loan Corporation [HOLC], created in June 1933 by Congress, was charged with the task assessing real estate investment risk. In 1935 it assessed 239 cities and created “residential security maps” to delineate risk level for real-estate investments. Housing properties were rated on a scale of “A” through “D” – “D” being the least desirable neighborhoods as determined based on racial composition. Areas on maps indicated by a “D” designated areas where black families lived and in turn, were considered high risk for mortgage defaults. Accordingly, the value of that real estate – and the value of those who lived there – was immediately deemed inferior. On real estate maps, these areas were colored in red and thus, redlining neighborhoods became a calculated and methodical way to ensure that Blacks were isolated from other more desirable [white] communities. Routinely denied government backed mortgages, blacks were trapped in inner city areas that were left to deteriorate, where businesses refused to invest, and where finding employment and having access to adequate education and social services became next to impossible. FHA appraisers effectively coerced the creation of substandard neighborhoods by severely devaluing property and ensuring those areas remained unworthy of corporate or social investment. The FHA’s guidelines in the Underwriting Manual explicitly stated that: “If a neighborhood is to retain stability it is necessary that properties continue to be occupied by the same social and racial classes.” [3]  In addition, federal agencies “endorsed the use of race-restrictive covenants until 1950” and explicitly refused to underwrite loans that would introduce “‘incompatible’ racial groups into White residential enclaves.” [4]

Cut off from legitimate government backed mortgages, African-Americans had no alternative but to succumb to predacious lending tactics known as the “contract” system. A recent New York Times article by the Editorial Board states: “The system accelerated urban decline and ghettoization.” The article, aptly titled, How Racism Doomed Baltimore discusses the predatory lending practices that were rigged “booby traps”. If a buyer missed even one payment, the property could be repossessed and sold. The scenario was repeated again and again. In this way lenders made a fortune turning over the same real estate while family after family was sentenced to decline. A legalized system of sustained, calculated inequality was set in motion. Compounding the problem, businesses that violated zoning laws elsewhere were allowed in black neighborhoods. These included bars, nightclubs, liquor stores, industries that polluted the environment, and brothels. Zoning rules classified black neighborhoods as commercial or industrial while classifying white neighborhoods as residential. The FHA would then conveniently label these establishments as blight that further devalued housing property, again enforcing the idea that any black neighborhood was a dangerous investment risk. It was a perfect catch-22.

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Next week: The G.I. Bill of Rights

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Further Reading and Footnotes

[1] How We Got Here: The Historical Roots of Housing Segregation
Testimony of Thomas Sugrue (Chicago), and of Jesus Hernandez (Los Angeles), (“Developers of new suburban tracts used overtly racial covenants as a means to attract buyers, assuring the safety of their investment through the use of ‘wise restrictions.’”)
[2] Southern Poverty Law Center David Chalmers: Essay: The Ku Klux Klan
[3] Hate Thy Neighbor: Move-In Violence and the Persistence of Racial Segregation in American Housing By Jeannine Bell
[4] How We Got Here: The Historical Roots of Housing Segregation


One response to “Baltimore: The Real “Trickle Down” Effect

  1. This blog was extremely insightful. In addition, it touched close to home literally. I’m a Baltimore native and I have resided in the inner-city my entire life; which is nineteen years. I’ll definetly be reading more of your post.

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