The North’s Cruel Hidden Racism

The financial industry isn’t afraid to screw a few points from the weak regardless of where they are relative to the Mason-Dixon line.

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I always felt like Randy Newman’s song “Rednecks” offers a harsh but fair assessment of the sneering disdain the North typically has for the South’s brand of racism. I say “brand”, because that’s what it is. Did you know that Chicago is America’s most segregated city? There’s a real cultural ignorance at play with regards to what America has deemed acceptable and unacceptable levels of racism, and the echoes of the Civil War pretty much guide most of it.

home_owners27_loan_corporation_philadelphia_redlining_map

Guess which parts of Philadelphia are largely black/not getting those sweet federal subsidies to build generational wealth

It’s been established that minorities get higher interest rates regardless of income or credit, and that’s a national phenomenon that doesn’t respect the Mason-Dixon line. Chicago in particular has been a hotbed of contract for deed, a method of home purchase that dodges the need for a mortgage with a high-risk loan that doesn’t build equity until the home is totally paid off… a method of home purchasing that minorities have historically pursued owing to the federal mortgage insurance being part of the redlining system, wherein minority neighborhoods were screwed out of the financial help that most of America found and finds necessary in order to buy a home.

So, anyway, here we are in the North, with decades of robbing minorities of the opportunity to build equity by forcing them out of the traditional white financial system. It’s offensive, it’s criminal, and it goes on all the damn time. What’s really gross about this is that post-2008, the libertarian right was pretty convinced that the CRA – the regulatory environment that has been attempting to force banks to not screw minorities over for a percentage just because they can – was actually responsible for (some) of the mortgage meltdown when it turns out that it was the non-regulated, non-CRA banks which were actually out of control.

It feeds fuel to the fire that America has always had a too-casual relationship to its assumed white supremacy. I suppose I should point out that “white supremacy” isn’t being used here as a KKK hoods and lynching environment, but one which simply assumes that white people are just better than minorities. Here, we see it with:

  • The assumption that lending to minorities doomed us all because they can’t be trusted with the same financial instruments as whites
  • They aren’t being screwed by the financial system and so we don’t need a CRA or CFPB, because the invisible hand of capitalism sees no race
  • The invisible hand also is assumed to not take advantage of weak political entities in order to extract rents to screw them out of a few percentage points here and there

I think that’s enough.

The point is that there’s a pervasive, institutional racism in American finance. It’s very real, and while it’s proven easy to shame lynching and hoods into irrelevance, it’s proven much more difficult to shame shady financial practices. That’s a universal truth – financial systems are pretty opaque and play around with layered abstract concepts while having the money necessary to place their opacity beyond easy restraint in a democracy – it’s just that here, it’s doubly offensive in that it’s not just classist, it’s racist.

Retirement and the American Hustle

Nothing changes unless something changes.

America can’t retire. There just isn’t enough money saved, for reasons like:
  • Decades of stagnant wages
  • Increased healthcare and housing costs
  • Decline of the pension
  • …and most importantly, American optimism
The problem isn’t just personal – it’s systemic. Pensions are underfunded with around $3T of unfunded liabilities – amounts the institutions were supposed to pay into the pensions but didn’t, hoping to get around to it later. They haven’t. It’s only going to get worse.
 
There’s a mismatch between expectations and reality which is pervasive in America, and it goes both ways. Everyone was sold the idea that each generation will be better than the previous, and it’s become so much of a given that no one is really pushing to actually make that happen… they just expect it to happen. Employers don’t pay employees in order to hoard cash and execute stock buybacks to pump their paper worth for shareholders; the wealthy are happy to underfund public education and infrastructure and healthcare because they can get around those hurdles; government expects that everything is going to be fine because markets are magic; employees don’t organize or make demands because they’ve been systemically disempowered and are just happy for crumbs.
 
There’s no architect’s union. No programmer’s union. No barista’s union. The only talk of Social Security is how to cut it. Companies are happy to pay less wages until for some reason no one has enough money to buy their trinkets. Everyone is complicit because no one can take responsibility individually for the entire mess, and there’s not enough social cohesion to make the sort of culture-wide compact to work together to solve the problem. In the end people look to the federal government to either institute some kind of socialist-light response or to back off and just let the market double-down on all the failures they already own. Neither one of those work any more because the aristocracy won, and no one wants to bother with a revolution because things are juuuuuuust good enough to let them ride a bit longer.
 
Something’s eventually going to give.