‘Catastrophic Times’ for Black America

‘Catastrophic Times’ for Black America

‘Catastrophic Times’ for Black America

The devastating impact of the mortgage crisis on black communities dominated Jesse Jackson’s latest economic summit. What solutions does Barack Obama propose?


“I am not a pessimist,” said Sheila Jackson-Lee, the progressive Texas Congresswoman, midway through a panel on “The State of Black America” at the annual Wall Street Project Economic Summit. For Jackson-Lee, a Democrat who has endorsed Hillary Clinton but whose stances on issues like the Iraq War and immigration often put her well to the left of the party, encouragement came from the diversity of the Democratic field. “I am not unhappy about an Hispanic, a populist, an African-American and a woman running for the presidency,” she explained.

Yet pessimism was hard to avoid during the early sessions of this latest economic summit, convened January 5-9 in New York City by the Rev. Jesse Jackson’s Rainbow/PUSH Coalition. The summit’s theme, Jackson reiterated time and again, was the “structural inequality” that has persisted in American society long after the end of legal segregation. The main item on the opening day’s agenda was the subprime mortgage implosion, its impact on black communities and its larger ramifications for a national economy barreling toward recession. Black homeowners have been hit particularly hard by the mortgage crisis, largely because predatory lenders have been steering them toward subprime loans for years, even when they could afford prime rates. According to Valerie Rawlston Wilson of the Urban League, home equity accounts for nearly 90 percent of black homeowners’ total net worth. So as the housing market collapses, much of the trumpeted new wealth that has accumulated in black communities in recent decades will go with it.

“There is no question that a black or Latino family is twice as likely to receive a subprime loan as a white family,” fumed Lewis Fidler, a white New York City Councilman who participated in the day’s second panel, “The State of Home Foreclosures.” “If that’s not a civil rights issue, I don’t know what is.”

Alongside Fidler was Eugene Grant, mayor of Seat Pleasant in Prince George’s County, Maryland–recently one of the wealthiest majority-black suburbs in the nation but now home to a foreclosure rate twice that of any other county in the state. Throughout the country, the effects of the mortgage crisis have been most painfully apparent on the local level. On one block of West Madison Street in Jackson’s hometown of Chicago, Rainbow/PUSH found that every single homeowner was in default on his or her mortgage. In neighborhoods across Chicago, foreclosure rates are topping fifty homes per square mile. Nationally, “the homeownership rate for African-Americans is falling like a rock,” said Jim Carr of the National Community Reinvestment Coalition.

Shockingly little attention has been paid to the mortgage crisis on the campaign trail. The collapse of the housing market, and with it much of the equity ordinary Americans have built up since the 1990s, combined with soaring gasoline prices, a flat-lining dollar and the worst unemployment figures in two years, all suggest that the country is speeding toward its most serious recession in some time. “The subprime crisis is sinking America’s economic boat like the Titanic,” Jackson warned. “But if you’re having a debate and nobody brings up mortgage foreclosures or predatory lending, then the issue just isn’t part of the discussion.”

Though Jackson endorsed Barack Obama for the Democratic nomination in early 2007, his support has not been unequivocal. He has done little actual campaigning and even publicly criticized Obama for remaining silent on the Jim Crow justice meted out to six black teenagers in Jena, Louisiana. Writing in the Chicago Sun-Times this past November, Jackson charged “the Democratic candidates–with the exception of John Edwards, who opened his campaign in New Orleans’ Ninth Ward and has made addressing poverty central to his campaign–have virtually ignored the plight of African Americans in this country.”

Just days after Obama handily won the Iowa caucus, his name was again conspicuously absent from all the discussion of the economic crisis confronting black Americans. Far more often the panelists referred to the symbolic meaning behind his candidacy rather than to Obama’s public statements on the mortgage crisis (few and far between), his Congressional voting record on related issues like bankruptcy reform (not good) or his platform for helping the millions at risk of losing their homes. Limited in scope and short on details, Obama’s plan amounts to little more than a minor tax credit, financial literacy training and an unspecified fund to “help homeowners avoid foreclosures.” (Hillary Clinton’s plan is slightly different but no better.) “Hope and substance must go hand in hand,” Jackson stressed to his audience.

If black America is indeed facing “catastrophic times,” as Congresswoman Jackson-Lee put it, then the question of whether Obama best represents the interests of black Americans is a vital one. The “politics of hope” are a far cry from a complete and detailed policy agenda–a moratorium on home foreclosures, an overhaul of the bankruptcy code, massive federal investment in restructuring mortgage rates and bailing out defaulting homeowners and, as The Nation recently editorialized, “a re-regulation of the entire financial sector: the revival of usury laws, the restoration of the Glass-Steagall Act and an end to the outrageous conflicts of interest that facilitated this debacle.”

Such a platform would begin to attend to the subprime flameout and its consequences for working and middle-class communities–black and otherwise–around the country. Access to quality jobs, education, healthcare and a solution to the mass incarceration of young black men–all of these would help remove the “badges and incidents” of the structural inequality that still plague black Americans. As the deepening mortgage crisis has demonstrated, black Americans need a President committed to structural change, not simply the promise of a new era of good feelings. Whether or not they get one this November will determine whether the current optimism about the Democratic field is well founded.

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