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When white America catches a cold, the saying goes, black America gets pneumonia. Or in this case, when white America has a recession, black America gets a depression. It was true in the Great Depression, and it's no less true in the "Great Recession." It seems counterintuitive that, with the first black president in office, African Americans would be worse off economically. But, as has been made clear over and over again, the election of Barack Obama was not a curative for the nation's racial ills, or for the economic pre-existing conditions that have turned white America's recession into black America's depression.

Where health is concerned, pre-existing conditions weaken our bodies defenses, make us more susceptible to disease, and the effects of disease more severe. For example, a person without respiratory problems may get a cold, where a person with an existing respiratory problem may end up with pneumonia, even though expose to the same virus.

Your Recession Ain't Like Mine

The same applies to economic pre-existing conditions. Barbara Ehrenreich and Derrick Muhammad pointed this out in 2009, when they how and why the recession's racial divide separates the black middle class from the white middle class.

Plenty of formerly middle- or working-class whites have followed similar paths to ruin: the layoff or reduced hours, the credit traps and ever-rising debts, the lost home. But one thing distinguishes hard-pressed African-Americans as a group: Thanks to a legacy of a discrimination in both hiring and lending, they’re less likely than whites to be cushioned against the blows by wealthy relatives or well-stocked savings accounts. In 2008, on the cusp of the recession, the typical African-American family had only a dime for every dollar of wealth possessed by the typical white family. Only 18 percent of blacks and Latinos had retirement accounts, compared with 43.4 percent of whites.

Racial asymmetry was stamped on this recession from the beginning. Wall Street’s reckless infatuation with subprime mortgages led to the global financial crash of 2007, which depleted home values and 401(k)’s across the racial spectrum. People of all races got sucked into subprime and adjustable-rate mortgages, but even high-income blacks were almost twice as likely to end up with subprime home-purchase loans as low-income whites — even when they qualified for prime mortgages, even when they offered down payments.

According to a 2008 report by United for a Fair Economy, a research and advocacy group, from 1998 to 2006 (before the subprime crisis), blacks lost $71 billion to $93 billion in home-value wealth from subprime loans. The researchers called this family net-worth catastrophe the “greatest loss of wealth in recent history for people of color.” And the worst was yet to come.

The myths about minorities and the subprime housing crisis have been repeatedly debunked, leaving only the reality that the racial dimension of the foreclosure crisis exists because lenders targeted blacks for subprime loans. And who could blame them? After all, according a study by Woodrow Wilson scholars Jacob Rugh and Henry G. Bryant, discrimination created a "unique niche of minority clients" who were easy marks for subprime loans.

The reasons are as old as the American Dream itself, as Melvin Oliver and Thomas M. Shapiro wrote in 2008.

No other recent economic crisis better illustrates the saying "when America catches a cold, African Americans get pneumonia" than the sub-prime mortgage meltdown. African Americans, along with other minorities and low-income populations, have been the targets of the sub-prime mortgage system. Blacks received a disproportionate share of these loans, leading to a "stripping" of their hard-won home-equity gains of the recent past and the near future. To fully understand how this has happened, we need to place this in the context of the continuing racial-wealth gap, the importance of home equity in the wealth portfolios of African Americans, and its intersection with the new financial markets of which sub-prime is but one manifestation.

Family financial assets play a key role in poverty reduction, social mobility, and securing middle-class status. Income helps families get along, but assets help them get and stay ahead. Those without the head start of family assets have a much steeper climb out of poverty. This generation of African Americans is the first one afforded the legal, educational, and job opportunities to accumulate financial assets essential to launching social mobility and sustaining well-being throughout the life course.

Despite legal gains in civil rights, however, asset inequality in America has actually been growing rapidly during the last 20 years. The assets that current generations own are heavily dependent on the legacies of their families of origin. Today's blacks still suffer from the fact that their parents and grandparents grew up in a rigidly segregated America, where opportunities to accumulate human and financial capital were strictly limited. So housing wealth is a disproportionate share of total black wealth.

It's worth stopping to emphasize that the generation of African Americans getting his with the huge loss of wealth or assets in this recession are the first generation to have achieved the relative wealth of middle class status, and whose children were the first generation to enjoy "the head start of family assets." After generations of the economic equivalent of making bricks without straw, many African American families have only just grasped what Kai Wright called "the crucial building block of middle class wealth." Wright went on to explain what this meant for African Americans.

Homeownership has been a crucial building block of middle-class wealth ever since Jefferson promoted land-tenure laws that favored freeholders and Lincoln signed the Homestead Act. Today, housing represents nearly two-thirds of all middle-class wealth. That reliance on real property always underscored the racial chasm, first in the agricultural era, when blacks were slaves and then sharecroppers rather than landowners, and then later when decades of lending bias created a massive racial disparity in homeownership rates. Before the housing boom, in the early 1990s, 69 percent of whites owned homes compared to just 44 percent of blacks and 42 percent of Latinos.

By 2004, the housing boom had improved those numbers. Fully three-quarters of white families owned homes, as did nearly half of both black and Latino families. As the homeownership picture improved, so too did the wealth picture, though at a glacial rate. The racial disparity in net worth is among the most astounding statistics in modern economics. For every dollar of wealth the median white family held back in 2002, similar black families had just 7 cents, while Latinos had just 9 cents. By 2007, black families had a dime for every dollar of white family wealth, and Hispanics, 12 cents. This was progress, if glacial.

Glacial Progress

The story of that glacial progress is long, and it's one I tried to tell in 2009, reflecting upon the end of Barrack Obama's first 100 days in office.

Coming to terms with race and resolving racial disparity in America feels like an insurmountable, unfinished task, because it is unfinished. The work was started and abandoned, started and abandoned many times by generations before us. But it’s only insurmountable to the degree that we tell ourselves the work is finished - or "finished enough"- choose to leave the rest of the work to those who will come after us.

But if it seems hard now, it will only be harder then. Yet it’s easy enough to start, once we assess where the previous work stopped.

In his book, Ending Slavery: How Well Free Today’s Slaves, scholar expert Kevin Bales describes the steps he believes are necessary for communities and countries all over the world to end the modern-day slave trade - from sex-trafficing to forced labor in jungles of Brazil to bonded labor passed down through generations in India. Key among those steps is the rehabilitation of freed slaves. Emancipation, Bales says, is insufficient without investment in rehabilitating freed slaves, who require medical care, education, and reorientation of their skills, which he describes in New Slavery: A Reference Handbook, as "restor[ing] the personhood of the person."

The essential condition of bondage is in the minds of the people. ...They have been conditioned to accept that their place is at the periphery of society. The process of release and rehabilitation is to restore the personhood of the person, to restore self-esteem, confidence, and the feeling that they too can win.

He goes on in Ending Slavery to describe how that process stopped short in America, after the Civil War.

After the American Civil War freed slaves also knew what it would take to build a decent life in free dome. Their work experience told them that forty acres and a mule could feed a family and grow enough of a cash crop to make a life and get the children to school. American slaves never got their forty acres and a mule.

Without collective investment in rehabilitation and restoration, Bales writes that many freed slaves return to slavery, either by choice or compelled by circumstances unchanged except for simply having been released.

The absence of that "collective investment in rehabilitation" led to what Douglas Blackmon, author of Slavery by Another Name called a period of "neo-slavery" that lasted more than a century after emancipation.

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Under laws enacted specifically to intimidate blacks, tens of thousands of African Americans were arbitrarily arrested, hit with outrageous fines, and charged for the costs of their own arrests. With no means to pay these ostensible “debts,” prisoners were sold as forced laborers to coal mines, lumber camps, brickyards, railroads, quarries and farm plantations. Thousands of other African Americans were simply seized by southern landowners and compelled into years of involuntary servitude. Government officials leased falsely imprisoned blacks to small-town entrepreneurs, provincial farmers, and dozens of corporations-including U.S. Steel Corp.-looking for cheap and abundant labor. Armies of "free" black men labored without compensation, were repeatedly bought and sold, and were forced through beatings and physical torture to do the bidding of white masters for decades after the official abolition of American slavery.

The neoslavery system exploited legal loopholes and federal policies which discouraged prosecution of whites for continuing to hold black workers against their wills. As it poured millions of dollars into southern government treasuries, the new slavery also became a key instrument in the terrorization of African Americans seeking full participation in the U.S. political system.

Based on a vast record of original documents and personal narratives, SLAVERY BY ANOTHER NAME unearths the lost stories of slaves and their descendants who journeyed into freedom after the Emancipation Proclamation and then back into the shadow of involuntary servitude. It also reveals the stories of those who fought unsuccessfully against the re-emergence of human labor trafficking, the modern companies that profited most from neoslavery, and the system’s final demise in the 1940s, partly due to fears of enemy propaganda about American racial abuse at the beginning of World War II.

Those three paragraphs amount to the story of millions of African Americans who, like me, were born just one or two generations removed from it. As a child, I grew with the remnants of that history, but lived far from it. I remember visits to my grandmother who lived, until I was ten years old, in what I know realize was a unpainted sharecropper's shack. To my sister and I, it was an adventure to spend a weekend in a house where there was no running water, but a pump outside; no indoor plumbing, but an outhouse in the back; no bathtub except for a huge metal tub, half-full of water that was pumped, carried inside, and heated on the stove. (In fact, getting the water inside, heated, and in the tub was so much work that we ended up sharing the bath water.)

For my parents, it was less an adventure than a reminder of the reality they grew up with and worked to leave behind, to raise us in the suburbs, in an air conditioned house that had all the amenities they grew up without, and the expectation that we would get the college education that was out of their reach, and the brighter futures they were raised to believe — and raised us to believe — it would place within ours.

They did all of this, in many ways, for us - their children. I heard them state over and over again that they didn’t want us to grow up as they had, though by that point the system in which they grew up picking cotton and walking behind a mule was long gone. They had both managed to finish high school, which made them even more aware of the importance of education, and they constantly expressed its to us. In 1987, decades after my parents left the farms - the mule, the plow, the cotton fields, etc. - I became the first in my immediate family to go to (and later graduate from) college.

From many perspectives, my parents were a success story; one of climbing into the middle class and sending their children out into the world with educations and opportunities they never had. If it was a success story, it was one delayed and deferred for generations. But I knew even then that our story was more the exception than the rule in many ways. We were not that far removed from the past, nor from its echo's in the present, and our perch somewhere in the middle of the economic ladder may even have been more precarious than my parents let us know.

But that’s not unusual for any recently-gained foothold. Those who have been climbing for generations may have further to fall, but they have several more rungs to go than those who have only recently started. As much as that was the case for my parents, so it’s the case for many African-Americans today.

... The truth is that the present disparities in racial disparities in wealth (and thus in the benefits and opportunities it provides) date back far beyond the pre-Civil Rights era. And, despite the successes of the Civil Rights movement, those pre-existing disparities were perpetuated by conservative economic policies that favored the those who were already among the wealthiest. And an economy geared to benefit the wealthiest will, by definition, benefit very few African-Americans, and will threaten and likely reverse the progress some have made.

The period Blackmon writes of was followed by a period long period of legal segregation discrimination, which was followed by what Paul Rosenberg calls "The 30-Years Conservative Nightmare," that perpetuated long-term economic disadvantages.

Traditionally, the American Dream has most often been described in terms of each generation sacrificing to provide a better future for their children. This has come about though two distinct, but connected phenomena. First, each successive generation of a given population is, on average, more educated, more skilled and more productive than the one before it. One can think of this in terms of moving from one income group to another--from the bottom decile (10% of the population) or quintile (20% of the population) to the next, for example. New immigrants come in on the bottom, and each generation climbs up the relative income ladder.

This was not, of course, true of African Americans. During most of our history from colonial times to the present, they were predominantly slaves, and after that they were predominantly locked into a system of sharecropping that kept them tied to the land, and subject to legal and economic restrictions that kept them from advancing, while new immigrants quickly advanced over them.

With the end of legal segregation in the South, and legal discrimination throughout the nation, it was assumed by many that this unique dynamic would end, and blacks would advance similarly to other low-income groups. The following two charts clearly indicate one reason why this did not happen. As can be seen, the very well-balanced economic income growth from 1947 through 1979 was replaced by a pattern of income growth highly concentrated at the top. As a result, even those blacks that did substantially increase their skill levels over that of their parents did not receive the full benefit that others had received before them. They received a skill bonus, but only a very meager generational bonus. The escalator no longer took everyone up at a nearly equal rate. Instead, it virtually stopped for those at or near the bottom, it slowed significantly for those in the middle, and it only really kept working for those at or near the very top.

I’m fortunate that my family made it somewhere near the middle before the escalator slowed down. It enabled me to keep moving upward, even if not at the rate my parents did - leaping from sharecropping to suburbia in one generation. At the very least, I haven’t lost any of the ground gained, nor have my siblings. But the reality is that, for the first or second generations to make that climb, the trip back down is only a few steps, and can be made without being chosen, and before we even know it. After all, we’re only a generation or two removed, if that.

We are only a generation removed, and though we never really caught up. We are losing even a tenuous grasp on what middle class status has meant for white Americans.

In terms of home ownership, blacks have longed been plagued by loan practices that force them to pay higher mortgage rates, thus ultimately paying more money for houses that are worth the same as their white peers. Such practices impact blacks not simply in terms of on-hand cash each month, but also in their ability to generate equity in their homes. Home equity can translate into financial flexibility when it comes to paying for their children’s college tuition, long-term health care and simply improving the value of their homes through home improvements.

Another reason for the discrepancy has to do with the role of parental assistance. Many middle-class whites are given a head start on wealth accumulation via their parents (i.e. covering the cost of college and graduate or professional schooling, providing down-payment assistance for first homes, child care for their grand-children, etc). Such support is often the difference between living with debt and having the ability to save money.

Increasingly, young blacks also benefit from the assistance of their parents, but as Shapiro notes, they provide financial support for family members, particularly aging parents, more often than their white peers. Shapiro argues that blacks are “more susceptible to falling from middle class grace, less capable of cushioning hard times, and less able to retool careers and change directions.” This is particularly so for those who are first generation middle-class.

Unfortunately, the very group who accepted that higher education was the vehicle to middle-class success now finds that there is no golden parachute—like the one the government has provided for Fannie Mae, Freddie Mac, AIG, etc. Their just-in-case war chest to protect them from being allowed in the game too late and with too little backup resources is non-existent.

Wealth remains just as difficult to attain for contemporary black Americans as it might have been for generations before, despite how many digits on our paychecks. And the lack of it is precisely why the current U.S. financial crisis poses an even greater threat to the black middle-class.

The lyric "Every step you're taking leaves you three more steps behind," is ringing more and more true, because our economic pre-existing conditions left us with weakened financial immunity.

So, when the rest of the black caught a cold known as the recession, black America developed pneumonia. Now, we have a epidemic.

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