WEBVTT - The Unrelenting Cost of Slavery 0:00:04.320 --> 0:00:07.080 When you start looking into the racial wealth gap. There's 0:00:07.080 --> 0:00:09.680 a moment in US history towards the end of slavery 0:00:10.000 --> 0:00:14.640 that's inescapable. It's eighteen sixty five, during the final months 0:00:14.720 --> 0:00:17.680 of the Civil War and Union General William took him 0:00:17.720 --> 0:00:20.640 to Sherman and his army had just marched across Georgia 0:00:20.720 --> 0:00:24.360 to capture Savannah, and he issues a field order that 0:00:24.440 --> 0:00:28.000 sets aside land in South Carolina, Georgia, and Florida for 0:00:28.120 --> 0:00:31.040 freed slaves that they would own and live and work on. 0:00:32.120 --> 0:00:35.519 This is known as forty acres and a mule. It's 0:00:35.520 --> 0:00:37.720 often talked about is something that could have changed the 0:00:37.760 --> 0:00:41.440 trajectory of the racial wealth gap today, if it ever 0:00:41.479 --> 0:00:46.720 actually happened. After President Abraham Lincoln was assassinated, his successor 0:00:46.840 --> 0:00:51.199 Andrew Johnson famously rescinded the offer. He lacked all of 0:00:51.240 --> 0:00:56.280 Lincoln's capacity for greatness. He was deeply, deeply racist. He 0:00:56.280 --> 0:00:59.080 couldn't have cared less about the fate of the former slaves, 0:00:59.640 --> 0:01:04.360 and he restored white supremacy as quickly as he could. 0:01:04.920 --> 0:01:08.480 That's Eric Fohner. He's a professor emeritus of history at 0:01:08.520 --> 0:01:11.839 Columbia University in New York and has written several books 0:01:11.880 --> 0:01:15.280 on Civil War era history. He says this moment was 0:01:15.319 --> 0:01:19.920 a huge missed opportunity for building black wealth. By some estimates, 0:01:20.080 --> 0:01:22.280 that land would have been worth as much as three 0:01:22.280 --> 0:01:26.240 point one trillion dollars today. But it wasn't the end 0:01:26.280 --> 0:01:30.000 of the conversation about giving an economic future to former slaves. 0:01:30.680 --> 0:01:36.160 During reconstruction after the Civil War, um former slaves and 0:01:36.280 --> 0:01:41.440 some white allies insisted that genuine freedom required some kind 0:01:41.440 --> 0:01:45.720 of economic base, and that in an agricultural society that 0:01:45.760 --> 0:01:50.080 meant owning land. In eighteen sixty six, a Congressman named 0:01:50.080 --> 0:01:53.240 Thaddeus Stevens proposed an amendment to a bill that would 0:01:53.240 --> 0:01:56.840 have confiscated all the land from plantation owners, split it up, 0:01:57.080 --> 0:01:59.400 and given it to former slaves and the people who 0:01:59.440 --> 0:02:06.040 fought for their freedom. We especially insist that the property 0:02:06.120 --> 0:02:09.160 of the chief rebels should be seized and used for 0:02:09.200 --> 0:02:13.280 the payment of the national debt caused by the unjust 0:02:13.400 --> 0:02:17.640 and wicked war they instigated. The whole fabric of Southern 0:02:17.639 --> 0:02:20.919 society must be changed, and never can it be done 0:02:21.000 --> 0:02:26.519 if this opportunity is lost. One reason to redistribute the 0:02:26.600 --> 0:02:30.399 land was political. The Republicans in Congress wanted to dilute 0:02:30.400 --> 0:02:33.959 the economic power of Southern landowners. But there was another 0:02:34.000 --> 0:02:38.359 reason too. You needed to break up the plantations and 0:02:38.400 --> 0:02:41.400 distribute the land. This was the only way that African 0:02:41.440 --> 0:02:45.880 Americans would avoid being economically dependent on their former owners. 0:02:45.919 --> 0:02:50.200 They wouldn't really then be free. Johnson may have been president, 0:02:50.400 --> 0:02:53.840 but Congress at that time was run by radical Republicans 0:02:53.880 --> 0:02:57.200 like Stevens, who are rapidly passing laws to expand the 0:02:57.280 --> 0:03:00.680 rights of black people. They passed the thirteenth, fourteen, and 0:03:00.760 --> 0:03:05.440 fifteenth Amendments that abolished slavery, granted citizenship to anyone born 0:03:05.440 --> 0:03:08.440 in the US, including slaves, and gave black men the 0:03:08.520 --> 0:03:12.600 right to vote. Congress debated the land issue, but never 0:03:12.639 --> 0:03:16.760 took it up seriously. The economic revolution did not go 0:03:17.000 --> 0:03:22.239 as far as the political revolution. Congress did not pick 0:03:22.360 --> 0:03:25.880 up the banner of forty acres in the mule. It 0:03:26.000 --> 0:03:30.560 was considered too unprecedented, you know, you know, it was 0:03:30.639 --> 0:03:34.600 just not something that was part of the American tradition 0:03:34.639 --> 0:03:40.640 in some ways. I know you asking today, how long 0:03:40.680 --> 0:03:45.240 would it take somebody that thing? How long we're predator 0:03:45.320 --> 0:03:49.400 flying the pigeons for men. I come to say to you, 0:03:49.600 --> 0:03:55.200 good afternoon, however, difficult for MoMA, however frustrating the how 0:03:56.280 --> 0:04:01.240 it will not be long true. A hundred years later, 0:04:01.440 --> 0:04:04.080 Martin Luther King Jr. Would lead a civil rights revolution 0:04:04.320 --> 0:04:08.520 not seen since reconstruction. The movement would help end segregation 0:04:08.760 --> 0:04:11.360 and laws that made it almost impossible for black people 0:04:11.360 --> 0:04:14.480 to vote. But even after those victories, he would talk 0:04:14.480 --> 0:04:18.920 about the problem they did in solve. Economically, the negro 0:04:19.120 --> 0:04:24.320 is worth worse off today than he was fifteen and 0:04:24.480 --> 0:04:29.640 twenty years ago, and so the unemployment rate among whites 0:04:31.320 --> 0:04:34.599 at one time was about the same as the unemployment 0:04:34.680 --> 0:04:39.640 rates among negroes, but today the unemployment rate among negroes 0:04:39.760 --> 0:04:43.800 is twice That's Martin Luther King Jr. Is the Other 0:04:43.839 --> 0:04:48.320 America speech at Stanford University in April nineteen sixte But 0:04:48.520 --> 0:04:53.320 we must see that the struggle today is much more difficult. 0:04:54.680 --> 0:05:00.440 It's more difficult today because we are struggling now called 0:05:00.520 --> 0:05:06.520 genuine equality. It's much easier to integrate a lunch counter 0:05:07.960 --> 0:05:14.120 than it is to guarantee a livable income and a 0:05:14.160 --> 0:05:20.120 good follow job. Economic justice was next on King's gender, 0:05:20.720 --> 0:05:23.839 but he was never able to achieve it. A year later, 0:05:23.880 --> 0:05:35.800 he was assassinated in Memphis, the data shows that the 0:05:35.880 --> 0:05:39.440 median white family has ten times more wealth than the 0:05:39.560 --> 0:05:42.200 average black family. One of the drivers of that wealth 0:05:42.240 --> 0:05:46.320 gap is redlining, the practice of mortgage lenders denying loans 0:05:46.360 --> 0:05:49.160 to people based on the race or where they live. 0:05:49.920 --> 0:05:55.680 We have lived at these and tim nditions for many 0:05:55.760 --> 0:05:58.000 years that he followed years. I feel that the way 0:05:58.120 --> 0:06:00.640 to bring about equality of black people in the systems 0:06:01.240 --> 0:06:03.480 quality white people. Now, don't interrupt. You have Dandue Kate 0:06:03.560 --> 0:06:05.960 all and black people the cap at the bottom of 0:06:06.040 --> 0:06:09.400 the economic letter, the bottom of the holding letter, the 0:06:09.400 --> 0:06:12.719 bottom of the educational letter. I was prepared to try 0:06:12.760 --> 0:06:14.760 to get used to having a colored family in the 0:06:14.800 --> 0:06:17.600 block when I there's another one across the street, and 0:06:17.640 --> 0:06:19.640 pretty soon I'll be one next door, and before you 0:06:19.680 --> 0:06:22.120 know what, those peaks are gonna start looking like Harlow. Well. 0:06:22.160 --> 0:06:24.000 I don't want to live in a colored slum. I 0:06:24.080 --> 0:06:44.440 don't want to live in a colored slock. Welcome back 0:06:44.480 --> 0:06:48.520 to the Paycheck. I'm Jackie Simmons and I'm Rebecca Greenfield. 0:06:49.640 --> 0:06:53.599 Last time we discussed what wealth is, white matters and 0:06:53.680 --> 0:06:56.880 how you get it. Today we're going to talk about 0:06:56.920 --> 0:07:00.120 the four hundred plus years of history that lead to 0:07:00.160 --> 0:07:02.800 America's wealth gap. If you want to look at the 0:07:02.880 --> 0:07:05.560 origins of the racial wealth gap, there's a pretty good 0:07:05.560 --> 0:07:08.880 place to start. Two d fifty years of unpaid labor. 0:07:09.000 --> 0:07:12.160 That's going to create a pretty large gap between the 0:07:12.280 --> 0:07:15.560 people who are slaves and the people who are owners. 0:07:15.960 --> 0:07:20.239 That's Eric Phoner again. Slavery not only robbed black people 0:07:20.280 --> 0:07:23.920 of wealth, but black people's labor and bodies created a 0:07:24.040 --> 0:07:27.120 huge amount of wealth for white people. To understand the 0:07:27.240 --> 0:07:30.120 enormity of this, Phoner says, there's a stat that he 0:07:30.160 --> 0:07:32.600 always used to tell his students when teaching them about 0:07:32.640 --> 0:07:35.560 the history of the wealth gap. The economic value of 0:07:35.600 --> 0:07:39.520 the four million slaves was an average of a thousand 0:07:39.600 --> 0:07:47.520 dollars per person, or about four billion dollars altogether. The banks, railroads, 0:07:47.680 --> 0:07:52.080 and factories in the United States all put together, were 0:07:52.120 --> 0:07:55.520 worth about three and a half billion dollars. Not only 0:07:55.640 --> 0:07:57.880 was all of this wealth in the hands of white people, 0:07:58.320 --> 0:07:59.920 but a lot of it was in the hands of 0:08:00.000 --> 0:08:02.840 white people who had a strong economic interest in keeping 0:08:02.840 --> 0:08:06.480 black people enslaved or at the very least economically subservient. 0:08:06.840 --> 0:08:09.360 The history of wealth generation in the US is filled 0:08:09.440 --> 0:08:12.680 with figures like these that help us understand the enormity 0:08:12.720 --> 0:08:16.480 of the racial wealth gap. We asked our colleague Katarina 0:08:16.560 --> 0:08:19.960 Surviva in economics reporter at Bloomberg, is she could do 0:08:20.000 --> 0:08:22.440 the math to show not just the losses endured by 0:08:22.480 --> 0:08:33.880 black people, but the huge economic gains created for white people. Hey, Katerina, 0:08:34.000 --> 0:08:38.319 welcome to the paycheck. Hi, thanks for having me. So, 0:08:38.440 --> 0:08:40.720 if we're going to go back into US history to 0:08:40.760 --> 0:08:44.640 look at the wealth gap over time, where do we start? Okay, 0:08:44.840 --> 0:08:47.559 for our purposes today, we're going to start with pre 0:08:47.720 --> 0:08:51.400 Civil War America. But before we do that, I'm going 0:08:51.480 --> 0:08:54.080 to give you four numbers to hold in your head. 0:08:54.320 --> 0:08:59.840 Can you do that? Yeah? Totally? Okay? Forty two trillion dollars, 0:09:01.000 --> 0:09:07.520 two hundred and seventy million, two hundred million and seventy five. 0:09:08.200 --> 0:09:13.280 You got that? Yeah, forty two trillion million, two hundred 0:09:13.320 --> 0:09:19.160 million and seventy five, You got a jackie. Great. We'll 0:09:19.200 --> 0:09:23.360 start with the first number, forty two trillion dollars, that 0:09:23.600 --> 0:09:27.360 four billion dollar figure that Eric Fohoner talked about that 0:09:27.400 --> 0:09:30.880 would amount to as much as forty two trillion dollars 0:09:30.880 --> 0:09:34.120 in today's money. That shows you just how much wealth 0:09:34.240 --> 0:09:37.679 was created for slave owners. So in the high end, 0:09:37.960 --> 0:09:41.920 that's like double the entire U. S economy today exactly, 0:09:42.440 --> 0:09:45.400 and that doesn't include all the lost wages and income 0:09:45.520 --> 0:09:48.920 that black people never got for their free labor. The 0:09:49.080 --> 0:09:53.359 US used enslaved labor for almost two hundred and fifty years. 0:09:53.800 --> 0:09:57.280 Thomas Kramer, a professor of public policy at the University 0:09:57.280 --> 0:10:00.760 of Connecticut, calculated that from the founding of the country 0:10:00.880 --> 0:10:03.920 in seventeen seventy six to the end of slavery in 0:10:04.040 --> 0:10:08.160 eighteen sixty five, that amounted to twenty trillion dollars in 0:10:08.200 --> 0:10:12.400 today's money. And it's also important to understand that owning 0:10:12.440 --> 0:10:16.320 slaves didn't just make white people rich, it helped them 0:10:16.360 --> 0:10:20.719 get richer. I called up a couple economists and historians 0:10:20.880 --> 0:10:22.760 to have them help me with some of this math. 0:10:23.480 --> 0:10:26.960 If you own slaves, that was an asset on which 0:10:27.120 --> 0:10:30.600 you could gain leverage to buy more stuff. And that's 0:10:30.640 --> 0:10:33.560 how you get rich, is you have assets that produced 0:10:33.600 --> 0:10:35.760 wealth and then you can get more credit based on 0:10:35.800 --> 0:10:40.000 those assets. That's Marisa barader On, a law professor and 0:10:40.120 --> 0:10:43.320 associate dean at the UC Irvine School of Law and 0:10:43.360 --> 0:10:45.960 the author of The Color of Money, Black Banks and 0:10:45.960 --> 0:10:49.400 the Racial wealth gap. She brings us to the second 0:10:49.400 --> 0:10:52.800 way we can look at wealth created by slavery. It 0:10:52.840 --> 0:10:56.800 wasn't just slave owners who profited, it was everyone connected 0:10:56.800 --> 0:10:59.720 to the slave economy, which, at this point in US 0:10:59.800 --> 0:11:07.760 his street was most people. Cotton was by and far 0:11:07.880 --> 0:11:11.360 the largest export at the time. Big banks like JP 0:11:11.520 --> 0:11:16.320 Morgan and Lehman Brothers got rich financing its trade. There 0:11:16.320 --> 0:11:21.440 were literally slave backed securities. The entire economy of some 0:11:21.640 --> 0:11:26.240 southern towns down to the smallest shopkeepers, depended on the 0:11:26.280 --> 0:11:29.880 cotton trade. So are we coming to another one of 0:11:29.920 --> 0:11:34.079 your numbers. No, So I really wanted to find an 0:11:34.080 --> 0:11:37.280 exact number for this, and I asked a bunch of people. 0:11:37.559 --> 0:11:40.920 But it's really hard to quantify this because slavery was 0:11:40.960 --> 0:11:43.240 just such a big part of the U. S. Economy. 0:11:44.160 --> 0:11:46.760 One of the things most people agree on, though, is 0:11:46.800 --> 0:11:49.440 that the U. S would probably not be the world's 0:11:49.480 --> 0:11:55.199 biggest economy today without its slave history. Okay, but when 0:11:55.240 --> 0:11:58.400 slavery is abolished, what happens to that four billion dollars 0:11:58.400 --> 0:12:03.200 of slave labor? Right, So they lost those human assets 0:12:03.679 --> 0:12:06.800 and that was a massive loss in wealth. But a 0:12:06.880 --> 0:12:10.720 recent study found that within a generation, the grandsons of 0:12:10.800 --> 0:12:16.800 slave owners recovered all that wealth. The researchers attributed to 0:12:16.840 --> 0:12:20.720 a few things. A network of professional relationships that allowed 0:12:20.760 --> 0:12:24.400 them to start new businesses, and they created a legal 0:12:24.520 --> 0:12:28.400 environment that allowed them to continue to exploit black labor. 0:12:36.480 --> 0:12:39.040 After the Civil War, there was some talk about how 0:12:39.080 --> 0:12:41.640 to set black people up for their free lives and 0:12:41.679 --> 0:12:45.000 shore up some of these differences. That forty acres and 0:12:45.040 --> 0:12:49.600 a mule promise, as we know, that never happens, and 0:12:49.640 --> 0:12:51.559 there was something else going on in the middle of 0:12:51.600 --> 0:12:55.760 America that had big implications for the wealth gap. That 0:12:55.840 --> 0:13:00.800 condition of the denial of the forty acres was accompanied 0:13:01.320 --> 0:13:04.400 by a situation in which one and a half million 0:13:04.600 --> 0:13:09.120 white families received a hundred sixty acre land grants in 0:13:09.160 --> 0:13:12.880 the western part of the United States. That's William Garritty, 0:13:13.040 --> 0:13:16.600 better known as Sandy, an economist at Duke University, who 0:13:16.600 --> 0:13:19.959 I talked to about this. What he's talking about are 0:13:20.000 --> 0:13:24.400 the Homestead Acts, and here's my second number. The Acts 0:13:24.400 --> 0:13:26.760 were a series of bills that were meant to encourage 0:13:26.800 --> 0:13:30.199 settlement of the American West by giving away two hundred 0:13:30.280 --> 0:13:35.000 and seventy million acres of land largely stolen from Native Americans. 0:13:35.679 --> 0:13:38.400 So at this point black people are free. Are they 0:13:38.440 --> 0:13:42.880 able to get any of that? It's complicated. The original 0:13:42.880 --> 0:13:46.600 Homestead Act was passed in eighteen sixty two, when most 0:13:46.679 --> 0:13:50.440 black people were still enslaved. There was a Southern Homestead 0:13:50.480 --> 0:13:54.480 Act in eighteen sixty six that was open to black applicants, 0:13:54.480 --> 0:13:58.040 but the land prices were often still too expensive, so 0:13:58.200 --> 0:14:01.760 the vast majority of this went to white people. It's 0:14:01.760 --> 0:14:04.880 hard to quantify the value of the land today, but 0:14:04.960 --> 0:14:09.600 the social scientists Trina Shanks estimates that forty eight million, 0:14:09.920 --> 0:14:14.080 mostly white Americans today are descendants of these original homesteaders. 0:14:15.000 --> 0:14:18.040 But there were some black families like mine who were 0:14:18.080 --> 0:14:22.240 able to acquire land. Yeah, but the economic hardships of 0:14:22.280 --> 0:14:25.800 the post Civil War period, the fact that plantation owners 0:14:25.840 --> 0:14:29.360 now had to pay for their labor, only increased racial 0:14:29.400 --> 0:14:33.040 resentment towards black people in the South. This led to 0:14:33.080 --> 0:14:36.720 the Jim Crow Laws that severely limited black people's freedoms, 0:14:37.200 --> 0:14:39.880 what jobs they could do, if they could own property, 0:14:40.240 --> 0:14:43.720 where they could live, which kept them poor and in 0:14:43.760 --> 0:14:48.840 many cases indebted to their former owners. Here's Eric Fohoner Again, 0:14:49.200 --> 0:14:56.240 Blacks found themselves locked into the lowest rooms on the 0:14:56.360 --> 0:15:01.040 latter in what was now the poorest region in the 0:15:01.120 --> 0:15:04.280 United States anyway, so they were at the bottom of 0:15:04.280 --> 0:15:07.440 the bottom was very difficult to move up from there. 0:15:10.120 --> 0:15:13.720 Plus that was accompanied by violence towards anyone who bucked 0:15:13.720 --> 0:15:17.240 the racial norms, like black people who accumulated any kind 0:15:17.240 --> 0:15:20.720 of wealth. One of the most egregious incidents was the 0:15:20.720 --> 0:15:25.320 Tulsa massacre of that destroyed a black neighborhood that was 0:15:25.360 --> 0:15:29.080 so prosperous in its businesses and home ownership that it 0:15:29.160 --> 0:15:33.280 was known as Blackwall Street. In one day, thousands of 0:15:33.320 --> 0:15:37.720 white rioters, including police officers, burned down hundreds of homes 0:15:37.720 --> 0:15:42.920 and businesses, displacing ten thousand black Tulson's. They even used 0:15:42.960 --> 0:15:46.960 World War One bomber planes to burn the city. And 0:15:47.040 --> 0:15:49.600 that's where we get to my next number. Two hundred 0:15:49.680 --> 0:15:54.080 million dollars. That's how much wealth was destroyed in Tulsa 0:15:54.240 --> 0:15:58.920 in today's dollars. But it wasn't an isolated incident. Sandy 0:15:59.000 --> 0:16:01.880 Daty says there were around a hundred of these attacks 0:16:02.080 --> 0:16:05.000 from the end of the Civil War into the nineteen forties. 0:16:05.760 --> 0:16:08.600 Hundreds of thousands of Americans were members of the Ku 0:16:08.680 --> 0:16:12.640 Klux Klan, and there were around three thousand lynchings between 0:16:12.680 --> 0:16:17.480 eighteen seventy and nineteen forty. So slavery itself created a 0:16:17.560 --> 0:16:21.520 multi trillion dollar wealth gap, and the period after slavery 0:16:21.720 --> 0:16:23.920 didn't do much to close it because of things like 0:16:23.960 --> 0:16:28.280 the Homestead Acts and all this recial violence. Yeah, that's right, 0:16:28.960 --> 0:16:31.760 and none of that includes the one thing most people 0:16:31.800 --> 0:16:36.280 can trace their wealth back to home ownership. There were 0:16:36.320 --> 0:16:39.760 two important policies that brought homeownership to the masses in 0:16:39.800 --> 0:16:47.880 the twentieth century. In the presence of senators, congressmen, and 0:16:47.920 --> 0:16:51.880 the heads of veterans organizations, President Roosevelt signs g I 0:16:52.000 --> 0:16:56.440 Joe's Bill of Rights. The penns will become valuable souvenirs 0:16:56.440 --> 0:16:59.680 of the occasion that guarantees a returning soldier a year 0:16:59.720 --> 0:17:04.920 of employment, insurance, guarantees of loans up to two thousand dollars, 0:17:04.960 --> 0:17:09.280 and helps pay for the completion of his schooling in 0:17:09.320 --> 0:17:12.240 The National Housing Act created a system where the US 0:17:12.320 --> 0:17:16.480 government for the first time guaranteed mortgages, and then the 0:17:16.600 --> 0:17:19.919 g I Bill helped veterans returning from World War Two 0:17:20.240 --> 0:17:24.840 access low interest loans to help cover certain expenses like homes. 0:17:25.760 --> 0:17:27.960 You no longer needed a pile of money to buy 0:17:28.000 --> 0:17:31.560 a house. This not only allowed many more people to 0:17:31.640 --> 0:17:35.320 own homes, but because people could leverage these assets to 0:17:35.440 --> 0:17:38.280 take out a loan to start a business or pay 0:17:38.320 --> 0:17:42.359 for their kids college education, it became a huge way 0:17:42.400 --> 0:17:47.240 to build more wealth. Black people were almost entirely left 0:17:47.280 --> 0:17:52.359 out of this, and it did not accidentally leave out 0:17:52.720 --> 0:17:57.240 people of certain races. It did so explicitly um methodically. 0:17:57.840 --> 0:18:02.560 What Mare Separadoron is talking about is redlining. Now that 0:18:02.600 --> 0:18:05.480 the government had a vested interest in making sure its 0:18:05.520 --> 0:18:08.560 loans got paid back, it came up with a system 0:18:08.600 --> 0:18:13.560 for assessing risk to do just that. It created maps 0:18:13.640 --> 0:18:17.760 that deemed certain neighborhoods safe bets and others so risky 0:18:17.840 --> 0:18:21.080 that banks wouldn't readily lend to people looking to buy there. 0:18:21.520 --> 0:18:25.400 And this system, more than anything, was based on racism. 0:18:25.560 --> 0:18:28.600 So when those f H. Mottain makers went out to 0:18:28.800 --> 0:18:32.600 survey risk for the mortgage market, they were protecting the 0:18:32.720 --> 0:18:37.320 insurance fund and they were creating a risk map across 0:18:37.320 --> 0:18:39.000 the country. You were going to go into a neighborhood, 0:18:39.000 --> 0:18:41.600 You're gonna look around and say, is this a good neighborhood? 0:18:41.560 --> 0:18:43.199 It is a bad neighborhood, And so you look at 0:18:43.240 --> 0:18:45.960 these forms and they say, you know, there's a lot 0:18:46.000 --> 0:18:49.680 of quote unquote lower races in this neighborhood. And this 0:18:49.760 --> 0:18:54.159 was called redlining because they literally color coded so called 0:18:54.359 --> 0:19:00.280 high risk, predominantly black neighborhoods. Read so black people were 0:19:00.320 --> 0:19:04.240 either denied mortgages or they could only get very high 0:19:04.400 --> 0:19:07.320 rate loans. So in some ways it becomes a self 0:19:07.359 --> 0:19:11.080 fulfilling prophecy. When you're stuck in a so called undesirable 0:19:11.160 --> 0:19:14.720 zip code, it's difficult to upgrade or even improve your 0:19:14.720 --> 0:19:19.639 lifestyle exactly. And this had huge implications for the wealth gap. 0:19:20.320 --> 0:19:26.240 Most Americans wealth today comes from homeownership. This systemic exclusion 0:19:26.320 --> 0:19:29.720 of black people from buying many of the country's most 0:19:29.800 --> 0:19:34.560 desirable homes and from affordable loans is the reason we 0:19:34.600 --> 0:19:38.920 have such a large racial wealth gap today. Nearly seventy 0:19:39.720 --> 0:19:43.639 of white family's own homes, while less than half of 0:19:43.760 --> 0:19:50.480 black families do. That was my last number. And you 0:19:50.560 --> 0:19:53.320 might be wondering why I'm stopping before we get to 0:19:53.359 --> 0:19:57.280 the civil rights era. That's because while the civil rights 0:19:57.320 --> 0:20:00.640 movement had a lot of success in ending legal segregation, 0:20:01.280 --> 0:20:04.440 there was much more resistance to fixing the housing problem 0:20:04.600 --> 0:20:08.840 and other economic issues. That directly contributed to the wealth gap. 0:20:11.280 --> 0:20:14.040 Do you think a Negro family moving here will affect 0:20:14.040 --> 0:20:18.840 the community as a whole? Definitely? In what way? I 0:20:18.880 --> 0:20:21.520 think that? Well, the property values will immediately go down 0:20:21.600 --> 0:20:24.480 if they are allowed to move in here in any numbers. 0:20:25.440 --> 0:20:29.840 Can you give a basis for that judgment? Yes, we 0:20:29.960 --> 0:20:31.840 used to live in Washington, d c. And we saw 0:20:31.880 --> 0:20:35.960 a very good example of that there. For years, various 0:20:36.000 --> 0:20:39.600 bills languished in the House and Senate until April of 0:20:41.400 --> 0:20:45.280 the day after Martin Luther King Jr. Was assassinated. President 0:20:45.359 --> 0:20:48.960 Lyndon Johnson sent a letter to Congress urging the passage 0:20:49.000 --> 0:20:51.880 of the Fair Housing Act, and less than a week later, 0:20:52.080 --> 0:20:58.359 the bill finally passed. Now with this bill, the voice 0:20:58.400 --> 0:21:05.600 of Justice speaks again. It proclaims that fair housing for 0:21:05.680 --> 0:21:14.959 all all human beings who live in this country is 0:21:15.040 --> 0:21:20.640 now a part of the American way of life. This 0:21:20.720 --> 0:21:25.920 law and others later on make discriminatory practices like redlining illegal, 0:21:26.320 --> 0:21:29.240 But they were weak and they didn't correct for the 0:21:29.359 --> 0:21:34.119 decades of damage already done. In nineteen sixty seven, white 0:21:34.160 --> 0:21:39.240 families had five times the wealth of black families. Today 0:21:39.640 --> 0:21:43.840 they have seven times the wealth That's why Martin Luther 0:21:43.960 --> 0:21:47.720 King Jr's words still ring true. It is a cruel 0:21:47.880 --> 0:21:51.000 jest to say to a bootless man that he ought 0:21:51.000 --> 0:21:54.719 to lift himself by his on bootstraps. And the fact is, 0:21:54.920 --> 0:21:59.840 millions of Negroes, as a result of centuries of denial 0:22:00.320 --> 0:22:08.520 and neglect, been left bootless. They find themselves impoverished aliens 0:22:09.240 --> 0:22:14.160 in this affluent society. And that is a great deal 0:22:14.359 --> 0:22:18.960 that the society can and must do if the negro 0:22:19.480 --> 0:22:24.680 is to gain the economic security that he needs. Now, 0:22:24.760 --> 0:22:27.520 one of the answers, it seems to me, is a 0:22:27.600 --> 0:22:36.680 guaranteed annual income, a guaranteed minimum income all families. A 0:22:42.520 --> 0:22:45.120 confluence of things put the country on track for today's 0:22:45.200 --> 0:22:48.520 racial wealth gap, and the legacy of these moments continues 0:22:48.560 --> 0:22:52.040 to play out. For the next couple of episodes, we're 0:22:52.040 --> 0:22:54.480 going to dig into how black people are still being 0:22:54.560 --> 0:22:59.000 left out of major vehicles for wealth building. First up, land, 0:22:59.800 --> 0:23:02.919 So here this farmer have received it farm operating on 0:23:03.040 --> 0:23:06.480 a hundred fifty seven thousand dollars. He hadn't even done 0:23:06.520 --> 0:23:11.040 the paperwork, the correct paperwork on the loan, and I 0:23:11.240 --> 0:23:14.760 was pretty much begging and pleading for five thousand dollar 0:23:14.840 --> 0:23:20.240 operating loan, and he had this conversation with Farmer Earl 0:23:20.560 --> 0:23:26.520 as though I wasn't visible before we go. We have 0:23:26.600 --> 0:23:30.920 a request for you. Experts estimate that closing the racial 0:23:30.960 --> 0:23:34.800 wealth gap would take around thirteen trillion dollars, give or 0:23:34.880 --> 0:23:38.000 take a trillion or two. That works out to about 0:23:38.040 --> 0:23:42.399 three hundred thousand dollars for every Black American. We'd like 0:23:42.480 --> 0:23:45.119 to know what would you do with that three hundred 0:23:45.119 --> 0:23:48.840 thousand dollars? How might it change your life? How might 0:23:48.880 --> 0:23:51.919 your life stay the same? Record a voice momo with 0:23:51.960 --> 0:23:54.399 your answers to these questions and email it to me 0:23:54.560 --> 0:23:57.879 at Our Greenfield at Bloomberg dot net, or call and 0:23:57.960 --> 0:24:00.680 leave us a voicemail at six or six three to four, 0:24:01.000 --> 0:24:08.840 three four and nine. Oh thanks for listening to the Paycheck. 0:24:09.119 --> 0:24:11.800 If you like the show, please rate, review, and subscribe 0:24:11.800 --> 0:24:15.159 wherever you get your podcasts. This episode was hosted by Me, 0:24:15.280 --> 0:24:19.880 Rebecca Greenfield Emmy Jackie Simmons. Today's episode was edited by 0:24:19.920 --> 0:24:23.680 Rebecca Greenfield and reported with the help of Katarina Surviva 0:24:24.040 --> 0:24:29.080 in Lenan Newin. Our producers are Magnus Henrickson, Lindsay Cratowell, 0:24:29.200 --> 0:24:32.439 and Ethan Brooks Our original music is by Leo Sidgen. 0:24:32.800 --> 0:24:36.520 Francesco Levi is Bloomberg's Head of Podcasts. Special thanks to 0:24:36.520 --> 0:25:01.000 Toefer Foreheads. We'll see you next time. Who a