Aaron Glantz’s award-winning investigative journalism has sparked over a dozen congressional hearings and criminal probes. His latest book, “Homewreckers,” takes a shocking new look at America’s 2008 housing crisis. It’s a tale of greed and corruption, as Glantz pulls back the curtain on a group of Wall Street magnates who he says took advantage of a rigged system. Moreover, as Glantz tells Hari Sreenivasan, these “homewreckers” include key members of President Trump’s inner circle.
But SXSW’s 2019 rock star was Rep. Alexandria Ocasio-Cortez, who filled 3,200 seats in the Convention Center Saturday. Notably, the Green New Deal advocate didn’t arrive in a Prius or on one of the ubiquitous scooters that clog Austin’s streets during the festival. She came instead in a gas-guzzling SUV... Ms. Ocasio-Cortez dealt at length with America’s pervasive racism, declaring, “The effort to divide race and class has always been a tool of the powerful to prevent everyday working people from taking control of the government.” America’s leaders also helped “racial resentment to become legitimized as a political tool.”She and Ms. Gray agreed that Mr. Trump is a racist, of course. But so was President Reagan, who in 1976 criticized a Chicago woman for bilking the welfare system for $150,000 a year. That attack was “rooted in racism,” according to Ms. Ocasio-Cortez, even though the woman in question was white.
Even more astonishing, the New York freshman representative declared Franklin D. Roosevelt a bigot, saying “the New Deal was an extremely economically racist policy that drew literal red lines around black and brown communities and basically it invested in white America.”
According to Ms. Ocasio-Cortez, the New Deal “allowed white Americans to have access to home loans that black and brown Americans did not have access to.” By doing so, it “accelerated . . . a really horrific racial wealth gap that persists today.” Yet studies show that FDR’s Home Owners’ Loan Corp. did not discriminate against African-Americans, and the gap between black and white homeownership remained around 20% from 1900 to 1990, though ownership levels increased for both groups.
Today African-American incomes on average are about 60 percent of average white incomes. But African-American wealth is about 5 percent of white wealth. Most middle-class families in this country gain their wealth from the equity they have in their homes. So this enormous difference between a 60 percent income ratio and a 5 percent wealth ratio is almost entirely attributable to federal housing policy implemented through the 20th century.
.. (16 min)
Rothstein’s new book, The Color of Law, examines the local, state and federal housing policies that mandated segregation. He notes that the Federal Housing Administration, which was established in 1934, furthered the segregation efforts by refusing to insure mortgages in and near African-American neighborhoods — a policy known as “redlining.” At the same time, the FHA was subsidizing builders who were mass-producing entire subdivisions for whites — with the requirement that none of the homes be sold to African-Americans.