Taking the Black Vote for Granted

At the end of the Alabama special election, which concluded with the improbable victory of Democratic candidate Doug Jones, the outspoken former NBA great Charles Barkley had some serious things to say about the Democratic Party. CNN’s Jake Taper asked Barkley what message the Alabama election sent to Donald Trump and Barkley immediately pivoted to a poignant criticism of the Democratic Party.

Well, this is a wakeup call for Democrats. … They’ve taken the black vote and the poor vote for granted for a long time. It’s time for them to get off their ass and start making life better for black folks and people who are poor.
They’ve always had our votes, and they have abused our votes and this is a wakeup call. We’ve got it in a great position now, but this is a wakeup call for Democrats to do better for black people and poor white people.”

So, what exactly is Charles Barkley talking about? Are the Democrats taking the black vote for granted?

In a word, yes. Not only have the Democrats received almost 100% of the African American vote, but the manner in which they get that vote without doing anything in return except delivering the absolute baseline of human decency, of which obviously can’t be expected from the Republican party, they have done nothing to deserve that vote. The Democratic party extorts the black vote like a mafia street thug that offers protection to a local business owner. You'd better vote for us, because I’d hate to see “what the other guys are going to do”.

A new report, issued by the People’s Policy Project’s Ryan Cooper and Matt Bruenig, tracks the evolution of African American wealth during the Obama presidency and how that wealth was affected by housing policy choices made by the president. The resulting consequences of the president's decisions were disastrous for African American communities. During the Obama reign, the average wealth of the bottom 99% of Americans decreased by $4,500 while the average wealth of the top 1% increased by $4.9 million. The average home equity of African American families decreased by $16,700 as a result in large part to Obama's decision to protect big banks and financial institutions instead of victimized home owners. 

IMPACT OF THE ‘GREAT RECESSION’ ON AFRICAN AMERICAN FAMILIES

African American families who have historically been denied federal housing subsidies and blocked from even purchasing a home through racist housing practices back by threats violence were once again especially victimized by the predatory mechanisms for which the subprime mortgages were founded upon. Black middle class families were disproportionately and deliberately tricked into subprime mortgages that were bound to explode. During the run up to the financial crisis (2004-2008), 21.4% of African American borrowers with a credit score of 660 and up were channeled into subprime mortgages while the percentage for white borrowers was only 6.2%. After the housing bubble burst, the percentage of African American homeowners with negative equity jumped from just 0.7% to 14.2%. Since African American middle class families were disproportionally channeled into subprime mortgages, the ‘Great Recession’ hit those communities much harder than white communities. Additionally, a dramatic increase in the amount of foreclosures in a community has a wide range of negative consequences. People who are foreclosed upon are more likely to lose their job, fall into poverty, develop psychological problems and commit suicide. Furthermore, even the families that were able to avoid foreclosure lost tremendous wealth when their home’s value dropped as a function of just being adjacent to foreclosed houses.

Since African Americans were disproportionately victimized by subprime mortgages they had the most to gain or lose from the government’s response to the housing crisis. Unfortunately for those communities, the Obama administration’s priority was to protect the big banks and their financial assets while letting victimized homeowners drown. This has led to an even further concentration of wealth into the hands of rich white families.

THE BANK BAILOUT VS. HOMEOWNERS RELIEF

The total amount of the Wall Street bailout varies depending on the source. Bloomberg, for example, estimates that the government commitment to the bailout totaled $7.7 trillion while a 2011 Levy Institute study came up with $29 trillion. By any measure it was a huge commitment. Compare those totals to the largest source of relief for drowning homeowners passed by the Obama Administration called the Home Affordable Mortgage Program (HAMP). While big banks got trillions after engaging in nefarious activities, struggling victimized home owners were allotted just $75 billion for mortgage relief to which only $15 billion was ever spent.

Besides being under funded, the design of HAMP was a disaster and it didn’t have to be. The Obama administration could have designed a housing policy based on the historical success of the ‘New-Deal’ era 'Home Owners Loan Corporation' which directly purchased the mortgages of homeowners struggling to make timely payments and refinanced them.  Instead, HAMP used the money allocated for mortgage relief to try to incentivize mortgage servicers to pursue loan modifications that would save ailing homeowners from foreclosure. HAMP, while being the biggest program enacted to try to provide mortgage relief was still designed to benefit financial institutions and it didn't work. Additionally, instead of trying to incentivize mortgage servicers to modify loans, the Obama administration could have included a provision in the bank bailout to reform the bankruptcy rules and allow bankruptcy judges to modify the terms of mortgages which under current law they were not allowed to do.

The Obama administration did nothing to address the widespread fraud which precipitated the crisis and even the fraud that continued afterwards. One of the ‘slap on the wrist’ penalties the Obama administration tried to enforce on the large banks was a requirement that they waive some outstanding mortgage debts. In order to comply with these penalties,  JP Morgan Chase brazenly went on to forgive loans for mortgages that they had already sold to another investor. At the conclusion of the crisis, 9.3 million home owners were eventually foreclosed upon in the greatest destruction of middle class wealth since the great depression and its impact disproportionally devastated black wealth.

It is time for the Democratic Party to follow the advice of Charles Barkley and do better for black people and poor white people for which they have received such dedicated electoral support. The support African American communities received during the 'Great Recession' from Democrats was unacceptable and this one example is just a microcosm of their entire history. 


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