Black People : The Destruction of the Black Middle Class

Discussion in 'Black People Open Forum' started by Putney Swope, Aug 28, 2009.

  1. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    From Recession to Depression
    The Destruction of the Black Middle Class
    By DEDRICK MUHAMMAD and BARBARA EHRENREICH

    To judge from most of the commentary on the Gates-Crowley affair, you would think that a "black elite" has gotten dangerously out of hand. First Gates (Cambridge, Yale, Harvard) showed insufficient deference to Crowley, then Obama (Occidental, Harvard) piled on to accuse the police of having acted "stupidly." Was this "the end of white America" which the Atlantic had warned of in its January/February cover story? Or had the injuries of class - working class in Crowley's case - finally trumped the grievances of race?

    Left out of the ensuing tangle of commentary on race and class has been the increasing impoverishment-or, we should say, re-impoverishment--of African Americans as a group. In fact, the most salient and lasting effect of the current recession may turn out to be the decimation of the black middle class. According to a study by Demos and the Institute for Assets and Social Policy, 33 percent of the black middle class was already in danger of falling out of the middle class at the start of the recession. Gates and Obama, along with Oprah and Cosby, will no doubt remain in place, but millions of the black equivalents of Officer Crowley - from factory workers to bank tellers and white collar managers - are sliding down toward destitution.

    For African Americans - and to a large extent, Latinos - the recession is over. It occurred between 2000 and 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During the seven-year long black recession, one third of black children lived in poverty and black unemployment-even among college graduates-- consistently ran at about twice the level of white unemployment. That was the black recession. What's happening now is a depression.

    Black unemployment is now at 14.7 percent, compared to 8.7 for whites. In New York City, black unemployment has been rising four times as fast as that of whites. Lawrence Mishel, president of the Economic Policy Institute, estimates that 40 percent of African Americans will have experienced unemployment or underemployment by 2010, and this will increase child poverty from one-third of African-American children to slightly over half. No one can entirely explain the extraordinary rate of job loss among African Americans, though factors may include the relative concentration of blacks in the hard-hit retail and manufacturing sectors, as well as the lesser seniority of blacks in better-paying, white collar, positions.

    But one thing is certain: The longstanding racial "wealth gap" makes African Americans particularly vulnerable to poverty when job loss strikes. In 1998, the net worth of white households on average was $100,700 higher than that of African-Americans. By 2007, this gap had increased to $142,600. The Survey of Consumer Finances, which is supported by the Federal Reserve Board, collects this data every three years -- and every time it has been collected, the racial wealth gap has widened. To put it another way: in 2004, for every dollar of wealth held by the typical white family, the African American family had only one 12 cents. In 2007, it had exactly a dime. So when an African American breadwinner loses a job, there are usually no savings to fall back on, no well-heeled parents to hit up, no retirement accounts to raid.

    All this comes on top of the highly racially skewed subprime mortgage calamity. After decades of being denied mortgages on racial grounds, African Americans made a tempting market for bubble-crazed lenders like Countrywide, with the result that high income blacks were almost twice as likely as low income white to receive high interest subprime loans. According to the Center for Responsible Lending, Latinos will end up losing between $75 billion and $98 billion in home-value wealth from subprime loans, while blacks will lose between $71 billion and $92 billion. United for a Fair Economy has called this family net-worth catastrophe the "greatest loss of wealth for people of color in modern U.S. history."

    Yet in the depths of this African American depression, some commentators, black as well as white, are still obsessing about the supposed cultural deficiencies of the black community. In a December op-ed in the Washington Post, Kay Hymowitz blamed black economic woes on the fact that 70 percent of black children are born to single mothers, not noticing that the white two-parent family has actually declined at a faster rate than the black two-parent family. The share of black children living in a single parent home increased by 155 percent between 1960 to 2006, while the share of white children living in single parent homes increased by a staggering 229 percent.

    Just last month on NPR, commentator Juan Williams dismissed the NAACP by saying that more up-to-date and relevant groups focus on "people who have taken advantage of integration and opportunities for education, employment, versus those who seem caught in generational cycles of poverty," which he went on to characterize by drug use and crime. The fact that there is an ongoing recession disproportionately affecting the African American middle class - and brought on by Wall Street greed rather than "ghetto" values - seems to have eluded him.

    We don't need any more moralizing or glib analyses of class and race that could have just as well been made in the 70s. The recession is changing everything. It's redrawing the class contours of America in ways that will leave us more polarized than ever, and, yes, profoundly hurting the erstwhile white middle and working

    full article;
    http://www.counterpunch.org/muhammad08052009.html
     
  2. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    back up for further examination
     
  3. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    Foreclosure Crisis Built on Racial Injustice

    Published on Sunday, September 13, 2009 by In These Times
    Foreclosure Crisis Built on Racial Injustice
    The recession has resulted from, and contributed to, America’s racial divide.
    by Seth Wessler

    Last week, CNN reported [1] that Obama's foreclosure prevention plan-the one that was supposed to keep millions of Americans in their homes by giving banks incentives to refinance mortgages-has not worked. In fact, just six percent of eligible households have received assistance.

    The impact of this failure is catastrophic, as millions of homeowners continue to slide into foreclosure. People of color have been hit hardest by the crisis, facing disproportionate rates of foreclosure as well as higher levels of unemployment. The recession has deepened the racial divide.

    This is why it seemed odd to many when Federal Reserve Chair Ben S. Bernanke met with world bankers and collectively declared the global economy to be back on track to normal. As long as we fail to address the struggles of working people and ignore the structures of racial inequity that helped push us all into recession, we will find that a return to normal will mean very little.

    Earlier this year, I traveled the country from Michigan to Arizona, Rhode Island to Washington, researching race and the recession. Near Detroit, I met Leila*, who recently lost her job as a teacher's assistant and supports her four children alone.

    She was laid off late last year because of state budget cuts. Her unemployment benefit ran out and she applied for government cash assistance. A month later, her welfare checks were also cut off and she was suddenly without any income.

    Leila fell behind on her mortgage payments on the house she had just moved into. She realizes now she was sold an adjustable rate subprime loan. Her house went into foreclosure. Without any other wealth to fall back on, she's not sure what will happen.

    Because people of color were disproportionately saddled with predatory loans, neighborhoods of color bear the brunt of foreclosures. Black, Latino, Asian and American-Indian families have been stripped of much of the wealth they had carefully accumulated over the years. The impact of these losses will last for generations.

    That people of color face higher rates of foreclosure is no coincidence. Until the 1970s, communities of color were broadly excluded from owning homes as a result of racial "redlining" practices and racially restrictive neighborhood agreements. Then Congress passed the Community Reinvestment Act (CRA) to end discrimination in lending. Suddenly redlining and racial exclusion were made illegal and people of color slowly began to access prime loans.

    But in the late 1990s, Congress deregulated the mortgage industry along with Wall Street, opening the space for industry to circumvent the CRA. These were the same anti-regulatory maneuvers that made subprime securitization possible.

    As the CRA was weakened and incentives to sell subprime loans grew, neighborhoods of color provided fertile ground for the sale of these faulty products. Since communities like Leila's were largely devoid of prime lenders as a result of redlining, there was little competition and the credit vacuum created conditions for the predatory sale of high-cost loans to communities of color.

    The streets of central Brooklyn and Detroit filled with predatory lenders and millions of these mortgages were sold. They ultimately burst, flooding the economy with toxic assets and submerging all of us in an economic storm.

    In other words, the economic crisis is built on the country's long history of racial discrimination


    full article;
    http://www.commondreams.org/view/2009/09/13-6
     
  4. chuck

    chuck Well-Known Member MEMBER

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    Good morning, bruh...

    And, even if this will tend to be bad news for some, better to know than not to know...

    On point...

    On time...

    Later...

    Peace...
     
  5. Corvo

    Corvo navigator of live MEMBER

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    Sure enough, it was not an accident, to bring down the African middle-class down! But then this whole economic crisis was design to do exactly what it did!
     
  6. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    what happened today? I don't understand

    Last week, CNN reported [1] that Obama's foreclosure prevention plan-the one that was supposed to keep millions of Americans in their homes by giving banks incentives to refinance mortgages-has not worked. In fact, just six percent of eligible households have received assistance.



    In light of that why would the president say this
    just a few hours ago on Wall street?

    from CNN;


    "Although I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," said Obama. "In fact, while there continues to be a need for government involvement to stabilize the financial systemthat necessity is waning

    that necessity is waning?????????????

    Taxpayers have lent hundreds of billions of dollars to systemically significant financial institutions and trillions more in lending programs aimed at easing the tight grip on lending. Obama said bailout money is flowing back to taxpayers,

    flowing back to taxpayers???????????????

    but "that doesn't mean taxpayers will escape the worst financial crisis in decades unscathed," he said.

    First Published: September 14, 2009: 12:16 PM ET
     
  7. chuck

    chuck Well-Known Member MEMBER

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    Good morning, posters...

    And, of course, we have our opinions, etc.

    But, right or wrong, good guess or bad guess, there is one thing we do need to reconsider:

    As in?

    When Obama and the so called democrats speak and write about 'working middel class families', to me he's actually relabelling what used to be called the lower middle class, i. e., those who have middle class lifestyles, though only maintain it from paycheck to paycheck...

    It is when such folk were lured in, via instant credit via numerous credit cards, afterwards those other bills came due, and few had the cash on hand to pay them too...

    My and the and more to the point?

    Let's do be candid and honest about everybody's contribution to this ongoing economic crisis...

    :fyi:
     
  8. Putney Swope

    Putney Swope Well-Known Member MEMBER

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    point well taken but do you remember the evidence from the investigation in the post above?
     
  9. Corvo

    Corvo navigator of live MEMBER

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    chucky baby, your last two post make no sense. You are all over the place. You are not connecting your thoughts together.

    From what you wrote! Any thing goes?​
     
  10. chuck

    chuck Well-Known Member MEMBER

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    Chuck:

    First of all, please don't call me 'Chucky, baby' again...

    Thanks!

    Second of all, I do have my bad days, and just blame that one on a stuffy head, since season changes bring on my rare sick days, too...

    :10500:
     
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