Post by the Scribe on Feb 18, 2021 15:14:36 GMT
'Sum Of Us' Examines The Hidden Cost Of Racism — For Everyone
www.npr.org/2021/02/17/968638759/sum-of-us-examines-the-hidden-cost-of-racism-for-everyone
February 17, 20211:45 PM ET
Heard on Fresh Air
DAVE DAVIES
35-Minute Listen ondemand.npr.org/anon.npr-mp3/npr/fa/2021/02/20210217_fa_01.mp3?orgId=427869011&topicId=1015&d=2158&p=13&story=968638759&dl=1&siteplayer=true&size=34451706&dl=1
Transcript
Author Heather McGhee draws on a wealth of economic data to make the case that discriminatory laws and practices that target African Americans also negatively impact society at large.
DAVE DAVIES, HOST:
This is FRESH AIR. I'm Dave Davies in today for Terry Gross. Our guest today, Heather McGhee, has a new book about the importance of recognizing and fighting racism in America. But it isn't just an argument that racial discrimination is morally wrong and unfair, even deadly to people of color. The heart of McGhee's case is that racism is harmful to everyone, and thus we all have an interest in fighting it. Drawing on a wealth of economic data, she argues that when laws and practices have discriminated against African Americans, whites have also been harmed. When people unite across racial and ethnic lines, she argues, there's a solidarity dividend that helps everyone.
Heather McGhee is the former president of the progressive think tank Demos, where she spent much of her career. She holds a BA in American Studies from Yale and a law degree from the University of California, Berkeley. She currently chairs the board of Color of Change, a nationwide online racial justice organization. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." She joins me from her home in Brooklyn, N.Y.
Heather McGhee, welcome to FRESH AIR.
HEATHER MCGHEE: I'm so glad to be with you.
DAVIES: You worked at the think tank Demos for a long time. Then you went and got a law degree and came back to it. And you write in the introduction that you were in love with the idea that information in the right hands was power. And you would do research. You would craft legislation. You'd talk to members of Congress and their staffs hoping to make change. And you write that getting to some of the ideas that motivated this book came from your discovering the limits of research and facts. Just share with us that journey.
MCGHEE: Well, I have always been animated by core questions about our economic dysfunction in America, why it was that people so often struggled just to make ends meet. I was born on the South Side of Chicago. I saw what happened when the good factory jobs and the good public sector jobs started to leave. And it felt like we could do something about this. We could, in many ways, have nice things, right? Universal child care and health care and reliable infrastructure and well-funded schools in every neighborhood. And the data was saying it would be in our economic interest to do it.
So I did spend about 15 years in economic policy trying to make the case for better economic decisions. But ultimately - and I started having a hunch that I was sort of using the wrong tool. And I think the election of Donald Trump really, with a majority of white voters, to me was a wake-up call. And I decided that ultimately, the facts and figures and reliance on a sense of economic self-interest was not actually going to be enough. I had to get at some deeper questions in this country. It wasn't that I had the wrong numbers. It was that I had the wrong deeper story about status and belonging, about competition, about deservingness, questions that in America have always turned on race.
DAVIES: Right. You write in here that when we ask people their opinions about, you know, racially neutral policy proposals or at least theoretically neutral proposals like raising the minimum wage or expanding public health care alternatives or even action to prevent climate change, people's opinions were affected by whether they thought that the demographic changes in the United States threatened the status of white people. That seemed to change the way people viewed everything. This was sort of an important realization, wasn't it?
MCGHEE: It was. I mean, it was - it's a really astonishing set of data. The psychologists Maureen Craig and Jennifer Richeson did this study. And then there's been a whole host of other ones to basically show that there is a predominant zero-sum mindset that's predominant among white Americans, more than among Americans of color, that basically is threatened by the idea of demographic change, that on a gut level feels like that is not in their own interest and that makes them want to pull away from some kinds of policies that are actually, you would think, in their economic interest, right?
The majority of people making under $15 an hour are white. The majority of people without health care are white. We all live under the same sky and are all going to be vulnerable to climate change. And yet making race salient, as, of course, Donald Trump did and Trumpism does, makes people more - white people more conservative. It's this zero-sum idea that progress for people of color has to come at white people's expense.
DAVIES: Well, you take us through some fascinating historical turns on how racism, discrimination, even slavery obviously was harmful to the enslaved and victims of racism but also harmed white people. And you write about a fascinating book published in 1857, you know, when slavery was still in effect in the South. And this book was by a white racist Southerner named Hinton Rowan Helper who looked at the effect of slavery on white people in the South. What story did he tell?
MCGHEE: So I myself am the descendant of enslaved people. And so I am going to be the last person to minimize the sheer brutality and dehumanizing force that was American chattel slavery. And yet at the time of the debates about abolition among white Americans, one of the most powerful voices was a white Southerner who was an avowed racist. And he wrote a book that basically said that slavery was benefiting the plantation class, but it wasn't benefiting the white majority in the South. And he saw that it was shortchanging the public development of the infrastructure in Southern states. He compared the number of schools, libraries and other public institutions that had been set up in free states versus slave states. In Pennsylvania, he counted 393 public libraries - in South Carolina, just 26. In Maine, not a very populous state, 236 libraries - in Georgia, just 38. And the tally was similar everywhere he looked.
So I read Helper's book. I also read some studies about how today we know that many of the poorest places in America are in the South. But what's interesting about it is we can draw a connection between the disinvestment in the original sort of founding centuries of America and the disinvestment during Jim Crow, where you really had an unwillingness among the elite to, you know, build schools in every neighborhood, to create robust public infrastructure everywhere. And that is relating to poverty today, not just among Black people, but among white people as well.
DAVIES: Yeah, it's a fascinating correlation. And, you know, I guess one might argue that, well, you know, the South was an agrarian economy. It simply generates, you know, less in the way of economic productivity. And so that's - might be part of the answer. Why did - what was it that prevented the planter (ph) class from providing libraries and schools to the white people?
MCGHEE: They didn't need to. I mean, really, the reason why wealthy people invest in the communities around them is because they need to to make the community livable for themselves, but also to attract and retain the people on whom their profits depend, whether it's workers or customers. But in the slave economy, neither was strictly necessary, right? So the source of plantation wealth was a completely captive and unpaid labor force. Owners didn't need more than a handful of white workers per plantation. And they didn't need or want an educated populace, whether Black or white. And their farms didn't depend on local customers, right? The factories were in the North. And the markets were, you know, in fact, even global. And so there was just a sense that it was a contained system and it wasn't necessary to invest in the public good outside of that system.
DAVIES: You also explored the days when, as there were efforts to introduce integration in parts of the South, that local elites, in order to maintain racial segregation, effectively cut off a lot of public investment, specifically the battle over swimming pools. You want to describe that?
MCGHEE: Yeah. This to me is really the kind of parable at the heart of the book. It's what's illustrated on the cover. In the 1920s, '30s and '40s, the United States went on a building boom of these grand resort-style swimming pools. These were the kind that would hold hundreds, even thousands, of swimmers. And it was a real sort of Americanization project. It was to create a, like, bath-temperature melting pot of, you know, white ethnic immigrants and people in the community to come together. It was sort of a commitment by the government to a leisure-filled American dream standard of living. And in many of these public pools, the rule was that it was whites only, either officially or unofficially. And in the 1950s and '60s when Black communities began to, understandably, say, hey, it's our tax dollars that are helping to support this public good, we need to be allowed to swim, too, all over the country, particularly in the American South but in other places as well, white towns facing integration orders from the courts decided to drain their public swimming pools rather than let Black families swim, too.
Now, I went to Montgomery, Ala., where there used to be one of those grand resort-style pools and where effective January 1, 1959, not only did they back a truck up and pour dirt into the pool and pave it over, but they also sold off the animals in the municipal zoo. They closed down the entire parks and recreation department of Montgomery for a decade. It wasn't until almost 1970 that they reopened the park system for the entire city. And I walked the grounds of Oak Park. Even after they reopened it, they never rebuilt the pool. And that, to me, felt like this just tangible symbol of the way that a population taught to distrust and disdain their neighbors of color will withdraw from public goods when they no longer see the public as good.
DAVIES: So the result was that in those communities, you'd had - you know, the elites had private clubs and private pools, but poor and working people of all races simply didn't have the public amenities. They were gone.
MCGHEE: That's exactly right. You started to see suburban backyard pools and these membership-only swimming clubs. In Washington, D.C., you saw over 100 new membership-only swimming clubs after you had pool integration. It's a small thing, and yet I began to see examples of the drained pool everywhere, in the way we withdrew from funding public education, in our inability to win universal health care, in the way that we have not innovated around the kinds of public resources that we all need, whether it's universal child care or broadband or high-speed rail. We've withdrawn from the sense of what we could do together in the wake of integration.
DAVIES: We need to take a break here. Let me reintroduce you. We are speaking with Heather McGhee. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." We'll continue our conversation in just a moment. This is FRESH AIR.
(SOUNDBITE OF THE INTERNET'S "STAY THE NIGHT")
DAVIES: This is FRESH AIR, and we're speaking with Heather McGhee. She is the past president of the progressive think tank Demos, currently the chair of the board of Color of Change, a racial justice online organization. We're talking about her new book, "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together."
You tell a story of how the U.S. government took a lot of steps in the mid-20th century to create a middle class, effectively a white middle class. Let's talk about this. One of the tools was the GI Bill, which provided assistance for education and home financing for returning military personnel after World War II. A lot of returning GIs, but this was not race-neutral in its implementation, was it?
MCGHEE: No, it wasn't. Like so much of the system of the social contract that really created the middle class in the middle of the 20th century, it ended up being filtered through racial segregation. It ended up being devolved down to local administration, which meant that Black GIs, even though they tried to take advantage of the benefits, were, you know, shunted off to vocational schools because they were not allowed in the South to go to the mainstream, you know, land grant colleges. It meant that the, in many ways most significant piece, the Veterans Administration home loan benefit was completely denied to Black service members' families because the Veterans Administration adopted the, at that point, two generation old practice of redlining, drawing lines, which is what the federal government did, around Black neighborhoods and saying these are risky. Just because it's Black people, these are risky. And so we're not going to backstop any loans that banks might give to communities in this neighborhood.
DAVIES: Right. So this had an important generational effect, right? Because those GIs coming back and their families benefited from education and investments in homes, which, you know, built up some assets for those families. And Black Americans were really left behind. And over the generations, that made a huge difference, didn't it?
MCGHEE: There's something so powerful about wealth. And the word wealth connotes, you know, diamonds and yachts. But we're really talking about a little bit of home equity, the fact that you grew up in a house that your parents owned, even if it was not a very expensive house, the fact that your aunt or uncle may have had some GM stock or a CD that they gave you, you know, when you turn 18. It's this kind of intergenerational wealth which was really created by public policy that, from the New Deal through the civil rights movement, was explicit about wanting to create middle class security and just as explicit, often, about wanting to make sure that the benefits of that went to white people only with racial covenants, for example.
The federal government created suburbs by investing in the highway system and subsidizing private housing developers but demanded whites-only clauses in housing contracts to prevent Black people from buying into them. Social Security excluded the job categories that left most Black workers out. You could even consider the New Deal labor laws that encouraged collective bargaining to be a government subsidy to create a white middle class because many unions kept their doors closed to people who weren't white until the 1960s. And so you had this sort of big social contract. And that's really what we see. It's not just a drained pool in this nice-to-have recreational facility. It's the kinds of policies that shifted dramatically in the late 1960s, '70s and early '80s to bring us the inequality era. And that's where we are today.
DAVIES: There was also a major public investment in public colleges and universities and community colleges - right? - which made it cheaper for a lot of people to go to school. I mean, I went to school in the '70s at the University of Texas. And the tuition was low. And my family couldn't afford to send me any other way. Well, they didn't send me at all. I worked my way through it. But that was possible. It was doable. That was when colleges - most college students were white. Over time, that changes. And then we see a different attitude towards the public investment, right?
MCGHEE: It's really one of those issues that I felt was important to include in the book. Back when the public was 90% white and the students who were going on to college were mostly white and, actually, mostly male, government picked up the tab, whether it was state governments funding the costs of their public colleges, like where you went, the University of Texas. And that was, roughly, about six out of 10 dollars would come from the states. And then the rest translated into tuition bills, which often a federal grant, whether it was a GI or the Pell Grant, which was much more generous two generations ago, would pick up the rest. And so you really could get a minimum wage job over the summer and work your way through college.
At Demos, we once did a report showing where every member of Congress went to college and what it cost then and what it costs now just to remind the decision-makers, most of them white, that there's something drastic that changed. And it's not that young people became less industrious or less willing to sacrifice. It's that government walked away from the deal. And it really was around the same time that the college-going population became more diverse and that this conservative, anti-government ethos kicked in in our politics. And that has a lot to do - the social science is now very clear - with these racialized ideas of who is the public and what they deserve. And so you started to see this privatization of public colleges. So now the majority of states rely on tuition dollars for the majority of the costs of college. And we shifted at the federal level from grants to loans.
DAVIES: Tuition is higher. Student debt is far more burdensome. And I think the critical point here is that when this change was made, it affected more white students than Black students in the end, didn't it?
MCGHEE: Absolutely. I mean, 63% of white students have to borrow now, right? This is the majority of white students are caught in this new system, which is just no way to run a country, right? We know that student debt is delaying homeownership, even marriage. It's making it harder for graduates with debt to save for retirement. And, of course - I want to be clear about this - like every aspect of systemic racism, it hits the target first and worst. Black students, because of the intergenerational racial wealth divide that we talked about, have to borrow more in order to go to college, come out owing more and then, because of discrimination in the labor market, end up having a harder time paying it back and, therefore, end up paying more. But the majority of white students are also in debt. This is the way, I think, that systemic racism works in an interconnected society. It hits the target. And it also distorts economic policy decision-making for everyone.
DAVIES: Let me reintroduce you again. Heather McGhee chairs the board of the online racial justice organization Color of Change. Her new book is "The Sum Of US: What Racism Costs Everyone And How We Can Prosper Together." She'll be back to talk more after this short break. I'm Dave Davies. And this is FRESH AIR.
(SOUNDBITE OF MCCOY TYNER AND BOBBY HUTCHERSON'S "ISN'T THIS MY SOUND AROUND ME?")
DAVIES: This is FRESH AIR. I'm Dave Davies, in today for Terry Gross. We're speaking with Heather McGhee, past president of the progressive think tank Demos. Her new book makes the case that racial discrimination in the United States has been harmful to white Americans as well as people of color. "The book is The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together."
So we were talking about how government policy created a middle class in the mid years of the 20th century. And it was, essentially, a white middle class because there were exclusions for African Americans - assistance to homeownership and college education, retirement security, et cetera. It changes kind of in the '70s. And we do know that in the '60s, there were civil rights legislation. Some barriers came down. There was the Fair Housing Act in 1968. Is there a connection here between the growth of the civil rights movement and the assault on some of these racial barriers and the demonization of government among conservatives?
MCGHEE: There is, Dave. And I really wanted to untangle this knot because, as someone who spent a career in politics and policy where, really, the specter of the white moderate - right? - the typical white moderate in the center that we have to sort of hew towards, it's always trimmed the sails of policy ambition, right? We can't get too far out of the center. And the center is defined as this sort of white center-right moderate. But I was shocked to learn that in the '50s, the majority of white people believed in an activist government in a way that is even more radical than today's average liberal.
According to a really authoritative, every-four-year survey, 65% of white people in 1956 thought the government ought to guarantee a job to anyone who wanted one and provide a minimum standard of living in the country. And then, between 1960 and 1964, white support for these big government guarantees for everybody cratered, went from nearly 70% to 35%. And it stayed low ever since. The Black support for this - these kinds of guarantees has stayed high throughout the data set. So I wanted to know what happened. Was this, like, a fluke in the data? I mean, it was just such a dramatic shift.
So it turns out that - you know, what happened between '60 and '64? What happened is that you saw white Americans watch the march on Washington for jobs and freedom. They saw Black activists actually demanding those same kinds of economic guarantees that was part of the set of demands. You saw Kennedy start to speak about civil rights and make promises on civil rights. And then, you know, just a few years later, when Johnson signed the civil rights legislation, the Civil Rights Act and the Voting Rights Act, he knew. He said that this was when he was going to sign away, you know, the South by signing these bills, but - I'm paraphrasing - politically. But what he didn't know was that he was going to sign away the entire white vote for the rest of history, including the last election, right? That was the last election in which a majority of white people voted for what had suddenly become the party of civil rights.
DAVIES: You know, one of the points you're making in the book is that racism hurts everybody, and when whites and Blacks or whites and people of color manage to work together, it's better for everybody. And, in fact, reducing discrimination should yield benefits for everybody. And so taking us back to those years in the '60s, when, for example, you know, the Voting Rights Act, which really did open up voter registration to a lot of places in the South where it had been closed off by poll taxes and literacy tests, et cetera, was there a benefit for working-class and middle-class whites in those states where there was a different kind of racial balance in the voting population?
MCGHEE: I mean, this is the thing, right? It's this zero-sum idea that progress for people of color has to come at the expense of white people. But that zero-sum idea is a lie. It's a lie that has been aggressively sold, I believe, to white Americans by people who are very vested in the economic status quo and in keeping the concentration of wealth and power very narrowly held. And so you really see that in Southern politics, what V.O. Key called the sort of, you know, stranglehold of the plantation politics, where it was sort of one-party rule. And politicians before integration in the South didn't really have to appeal to a broad base about - you know, with promises of a better quality of life. They could just sort of market white supremacy and say, defensively, vote for us because we're going to keep the racial order. And so when the civil rights movement and the Voting Rights Act got rid of things like the poll tax, you actually saw a resurgence of civic life in the South that impacted and freed up poor white people as well.
DAVIES: So there, you saw more public investment in schools, perhaps, and libraries and roads and the kinds of things that improve lives?
MCGHEE: Exactly. So what you started to see was instead of running on white supremacy - right? - and running on segregation, candidates had to run on things that would actually benefit people's lives to get their votes, right? I tell the story of Governor Albert Brewer, who ended up facing off George Wallace. But it was a race where he tried to put together a sort of new fusion coalition that was going to be the white middle class, newly enfranchised Black Alabamians and working-class whites outside of the kind of Black Belt.
And in order to sort of give the promise of what this new politics could be, he called a special session on education and passed 29 bills to say that - you know what? - we actually need to educate our people, because pre-civil rights Alabama was a place where, you know, about half of the state's citizens had no more than an elementary school education, right? It was a place where the inequality and racism really had drained the pool. And so you started to see these big investments, things like universal kindergarten in these states in the South, because politicians had to actually compete for Black people's votes and for white people's votes on issues other than just segregation. And you started to see people realize, actually, there are these things that unite us. We all want good education for our kids.
DAVIES: You know, when we saw the Reagan revolution happening in the 1980s and you saw conservatives embracing, you know, deregulation for businesses, generally suspicious of government, regarding it as inefficient and unresponsive - you know, Reagan saying, the words you never want to hear are I'm from the government, and I'm here to help. And this - it was an effective sales pitch. And, of course, one way of looking at it is that, you know, for elites, for economic elites, for wealthy individuals and corporations, they want to cut taxes, and to cut taxes, what you want to do is cut the size of government. So there's a fit there. And it's not necessarily per se a racist idea. However, when you're selling it, it seems, I mean, it was very convenient to make the beneficiaries of a bigger government welfare moms, people in the inner city. And so there ended up being a distinctly racial appeal to the political pitch, wasn't there?
MCGHEE: There was. And, you know, it's often subtle, although, of course, in recent times it hasn't been very subtle at all. But, you know, there's that famous Lee Atwater quote from towards the end of his life where he really just lays it out. He explains how you go from explicitly racial appeals in the 1950s, and then it started to backfire because the civil rights movement has been effective, right? You don't actually want to call people the N-word. You don't actually want to make your political case for segregation and Jim Crow.
And so then it becomes more subtle. You say, in his words, stuff like forced busing, states' rights and all that stuff. And you're getting abstract. Now, he says, you're talking about cutting taxes, and all these things you're talking about are totally economic things. And a byproduct of them is Blacks get hurt worse than whites. He says, we want to cut this is much more abstract than the busing thing and a hell of a lot more abstract than, he says, the N-word, the N-word, right? It's this idea that once the government sort of moves in a really incredible short period of time from the enforcer of the racial hierarchy - right? - the one drawing the red-lining maps, the entity that is creating the laws to segregate to, you know, in a very short time, that government moves from the enforcer of racial hierarchy to the upender. It's a core betrayal.
And what the right was able to do was say, you know, the government's no longer on your side. It's on the side of these undeserving people of color, these people you've been taught to distrust and disdain. And so you should trust the market, right? Turn to the market. Turn to individualism. Turn to the wealthy for your, you know, sense of identity and trust and your sense of how you're going to succeed in life, right? It's no longer going to be New Deal universal benefits. It's going to be, you know, the market. And that was Reagan's story. And that zero-sum idea that undergirds it is really still so animating in the right-wing language around makers and takers and taxpayers and freeloaders. It's animated in our debates over health care.
The Affordable Care Act is still unpopular among the majority of white people. Support for the Affordable Care Act has never gone over 50% among white people. The anti-government conservative ethos that holds the conservative and moderate wings of our politics together really still has a racialized narrative around who belongs and who deserves - that is what holds it together.
DAVIES: And yet more white people would benefit from the Affordable Care Act than Black people in raw numbers, right?
MCGHEE: That's right. That's exactly right. The majority of the uninsured are white people. I talk to folks in Texas where they refuse to expand Medicaid, where, you know, the rural hospital system is absolutely being decimated. You have this devastating story of a little - of a toddler who choked and her parents couldn't get to a hospital in time because their local, you know, county hospital had closed. And I talked to a, you know, white rural guy who said it's this gut-level rejection of Medicaid and Obamacare and all that it represents. And yet, of course, it's the majority of white people who are going without.
DAVIES: Let me reintroduce you again. We're going to take a break here. We are speaking with Heather McGhee. She chairs the board of the online racial justice organization Color of Change. She is the past president of the progressive think tank Demos. Her book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." We'll talk more after this short break. This is FRESH AIR.
(SOUNDBITE OF MUSIC)
DAVIES: This is FRESH AIR. And we're speaking with Heather McGhee. She's a past president of the progressive think tank Demos. Her new book makes the case that racial discrimination in the United States has been harmful to white Americans as well as people of color. The book is called "The Sum Of Us."
You write about the subprime lending practices in the 1990s that, you know, in some ways ultimately led to the 2008 financial crash. And there was a narrative here that, you know, these were subprime mortgages, cheap mortgages being pushed on people who probably shouldn't be buying homes and these were irresponsible borrowers making bad decisions. You looked at this and found it's a pretty different story, didn't you?
MCGHEE: That's right. In fact, leading up to the crisis, the majority of subprime and therefore more expensive loans were, A, going to people who had credit scores that would have enabled them to get prime or cheaper loans and, B, weren't for new homeowners. They were existing homeowners being aggressively marketed refinance loans that often ended up stripping equity and ending up in foreclosure. And the first targets for these kinds of toxic loans were Black homeowners.
DAVIES: Right. You know, I remember this. This was described as predatory lending by a lot of activists in the 1990s. And they asked the regulators, you need to do something about this. What happened?
MCGHEE: The experience of being one of the ignored and unheeded and outmatched few who were trying to raise the alarm about this really forever shapes my understanding of economic policy. What happened was, in many ways, these regulators and these lenders, there was a lot of greed, right? People were making money hand over fist. If you could get someone to pay 9% on a six-figure loan versus 5%, that basically doubles your money. That's huge, but it was also a little bit of racism too - right? - this age-old stereotype about Black people being risky, not being good with money. It's a tidy justification for denying Black people the opportunity to make money. And so it was a lot of greed, obviously, but it was also a lot of racism.
DAVIES: A lot of these people are essentially hustled, talked into these complicated mortgages. Many of them are foreclosed upon. And then, of course, the mortgages get bundled into these complicated securities that are sold on Wall Street, one of the things that contributed to this huge crash in 2008 and of course, the irony here is that a racially targeted marketing campaign which takes advantage of African American people. When the crash comes, what's the effect on working and middle class white people?
MCGHEE: It was devastation. When the crash finally came, everybody felt the pain. There were 8 million jobs lost, nearly $19 trillion in lost household wealth. In many ways, so many families that lost property value and houses still haven't recovered from the Great Recession. This is one of the most costly examples of racism ultimately costing everyone.
DAVIES: One of the things you write was that this had an enormous impact on the family assets of African American families. You said the - shrank the wealth of median African American families by more than half between 2005 and 2009. That is an astonishing number.
MCGHEE: Yeah. It's - this is the chapter that is the most - that is closest to my heart, that I get the most emotional about. I share a story of going to Cleveland in 2007 and taking a walk with some community activists who were showing how nearly every home on the street in the neighborhood of Mount Pleasant was no longer in the hands of the rightful owners, had been the victim of subprime mortgage refinances and then foreclosure.
And I remember so vividly just being totally overcome with just the weight of the history of it all, you know, I mean, to really see Black people who finally got their shot at the American dream that was denied so systematically for so long, people who, you know, so many of these were, you know, elderly Black folks who had finally been able to buy a house. And, you know, think about, like, their parents and grandparents in many instances had been, you know, subject to Jim Crow or even were enslaved people. And this machine of racism and greed had just sort of mowed down the neighborhood. And I remember running around the corner, excusing myself and then just falling to my knees and sobbing because it just felt like, why are we so doomed to repeat these mistakes again?
And, you know, I had that moment in 2007. And then, of course, a year later, I'm actually in law school, and I see Lehman Brothers is going into bankruptcy - right? - the company on Wall Street that had invested the most in mortgage-backed securities right at the end of the bubble. And it wasn't until I was writing this book that I learned that Lehman Brothers, the original brothers Lehman, were slaveholders who made their money in the Confederacy, running cotton behind the cotton blockade during the war and setting up the cotton stock exchange and just how tied up it all is.
DAVIES: Heather McGhee, thank you so much for speaking with us.
MCGHEE: Thank you, Dave. It's great.
DAVIES: Heather McGhee is the past president of the progressive think tank Demos. She currently chairs the board of the online racial justice organization Color of Change. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." Coming up, John Powers reviews the new HBO Max miniseries "It's A Sin" about a group of friends in 1980s London whose lives are forever changed by the arrival of AIDS. This is FRESH AIR.
www.npr.org/2021/02/17/968638759/sum-of-us-examines-the-hidden-cost-of-racism-for-everyone
February 17, 20211:45 PM ET
Heard on Fresh Air
DAVE DAVIES
35-Minute Listen ondemand.npr.org/anon.npr-mp3/npr/fa/2021/02/20210217_fa_01.mp3?orgId=427869011&topicId=1015&d=2158&p=13&story=968638759&dl=1&siteplayer=true&size=34451706&dl=1
Transcript
Author Heather McGhee draws on a wealth of economic data to make the case that discriminatory laws and practices that target African Americans also negatively impact society at large.
DAVE DAVIES, HOST:
This is FRESH AIR. I'm Dave Davies in today for Terry Gross. Our guest today, Heather McGhee, has a new book about the importance of recognizing and fighting racism in America. But it isn't just an argument that racial discrimination is morally wrong and unfair, even deadly to people of color. The heart of McGhee's case is that racism is harmful to everyone, and thus we all have an interest in fighting it. Drawing on a wealth of economic data, she argues that when laws and practices have discriminated against African Americans, whites have also been harmed. When people unite across racial and ethnic lines, she argues, there's a solidarity dividend that helps everyone.
Heather McGhee is the former president of the progressive think tank Demos, where she spent much of her career. She holds a BA in American Studies from Yale and a law degree from the University of California, Berkeley. She currently chairs the board of Color of Change, a nationwide online racial justice organization. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." She joins me from her home in Brooklyn, N.Y.
Heather McGhee, welcome to FRESH AIR.
HEATHER MCGHEE: I'm so glad to be with you.
DAVIES: You worked at the think tank Demos for a long time. Then you went and got a law degree and came back to it. And you write in the introduction that you were in love with the idea that information in the right hands was power. And you would do research. You would craft legislation. You'd talk to members of Congress and their staffs hoping to make change. And you write that getting to some of the ideas that motivated this book came from your discovering the limits of research and facts. Just share with us that journey.
MCGHEE: Well, I have always been animated by core questions about our economic dysfunction in America, why it was that people so often struggled just to make ends meet. I was born on the South Side of Chicago. I saw what happened when the good factory jobs and the good public sector jobs started to leave. And it felt like we could do something about this. We could, in many ways, have nice things, right? Universal child care and health care and reliable infrastructure and well-funded schools in every neighborhood. And the data was saying it would be in our economic interest to do it.
So I did spend about 15 years in economic policy trying to make the case for better economic decisions. But ultimately - and I started having a hunch that I was sort of using the wrong tool. And I think the election of Donald Trump really, with a majority of white voters, to me was a wake-up call. And I decided that ultimately, the facts and figures and reliance on a sense of economic self-interest was not actually going to be enough. I had to get at some deeper questions in this country. It wasn't that I had the wrong numbers. It was that I had the wrong deeper story about status and belonging, about competition, about deservingness, questions that in America have always turned on race.
DAVIES: Right. You write in here that when we ask people their opinions about, you know, racially neutral policy proposals or at least theoretically neutral proposals like raising the minimum wage or expanding public health care alternatives or even action to prevent climate change, people's opinions were affected by whether they thought that the demographic changes in the United States threatened the status of white people. That seemed to change the way people viewed everything. This was sort of an important realization, wasn't it?
MCGHEE: It was. I mean, it was - it's a really astonishing set of data. The psychologists Maureen Craig and Jennifer Richeson did this study. And then there's been a whole host of other ones to basically show that there is a predominant zero-sum mindset that's predominant among white Americans, more than among Americans of color, that basically is threatened by the idea of demographic change, that on a gut level feels like that is not in their own interest and that makes them want to pull away from some kinds of policies that are actually, you would think, in their economic interest, right?
The majority of people making under $15 an hour are white. The majority of people without health care are white. We all live under the same sky and are all going to be vulnerable to climate change. And yet making race salient, as, of course, Donald Trump did and Trumpism does, makes people more - white people more conservative. It's this zero-sum idea that progress for people of color has to come at white people's expense.
DAVIES: Well, you take us through some fascinating historical turns on how racism, discrimination, even slavery obviously was harmful to the enslaved and victims of racism but also harmed white people. And you write about a fascinating book published in 1857, you know, when slavery was still in effect in the South. And this book was by a white racist Southerner named Hinton Rowan Helper who looked at the effect of slavery on white people in the South. What story did he tell?
MCGHEE: So I myself am the descendant of enslaved people. And so I am going to be the last person to minimize the sheer brutality and dehumanizing force that was American chattel slavery. And yet at the time of the debates about abolition among white Americans, one of the most powerful voices was a white Southerner who was an avowed racist. And he wrote a book that basically said that slavery was benefiting the plantation class, but it wasn't benefiting the white majority in the South. And he saw that it was shortchanging the public development of the infrastructure in Southern states. He compared the number of schools, libraries and other public institutions that had been set up in free states versus slave states. In Pennsylvania, he counted 393 public libraries - in South Carolina, just 26. In Maine, not a very populous state, 236 libraries - in Georgia, just 38. And the tally was similar everywhere he looked.
So I read Helper's book. I also read some studies about how today we know that many of the poorest places in America are in the South. But what's interesting about it is we can draw a connection between the disinvestment in the original sort of founding centuries of America and the disinvestment during Jim Crow, where you really had an unwillingness among the elite to, you know, build schools in every neighborhood, to create robust public infrastructure everywhere. And that is relating to poverty today, not just among Black people, but among white people as well.
DAVIES: Yeah, it's a fascinating correlation. And, you know, I guess one might argue that, well, you know, the South was an agrarian economy. It simply generates, you know, less in the way of economic productivity. And so that's - might be part of the answer. Why did - what was it that prevented the planter (ph) class from providing libraries and schools to the white people?
MCGHEE: They didn't need to. I mean, really, the reason why wealthy people invest in the communities around them is because they need to to make the community livable for themselves, but also to attract and retain the people on whom their profits depend, whether it's workers or customers. But in the slave economy, neither was strictly necessary, right? So the source of plantation wealth was a completely captive and unpaid labor force. Owners didn't need more than a handful of white workers per plantation. And they didn't need or want an educated populace, whether Black or white. And their farms didn't depend on local customers, right? The factories were in the North. And the markets were, you know, in fact, even global. And so there was just a sense that it was a contained system and it wasn't necessary to invest in the public good outside of that system.
DAVIES: You also explored the days when, as there were efforts to introduce integration in parts of the South, that local elites, in order to maintain racial segregation, effectively cut off a lot of public investment, specifically the battle over swimming pools. You want to describe that?
MCGHEE: Yeah. This to me is really the kind of parable at the heart of the book. It's what's illustrated on the cover. In the 1920s, '30s and '40s, the United States went on a building boom of these grand resort-style swimming pools. These were the kind that would hold hundreds, even thousands, of swimmers. And it was a real sort of Americanization project. It was to create a, like, bath-temperature melting pot of, you know, white ethnic immigrants and people in the community to come together. It was sort of a commitment by the government to a leisure-filled American dream standard of living. And in many of these public pools, the rule was that it was whites only, either officially or unofficially. And in the 1950s and '60s when Black communities began to, understandably, say, hey, it's our tax dollars that are helping to support this public good, we need to be allowed to swim, too, all over the country, particularly in the American South but in other places as well, white towns facing integration orders from the courts decided to drain their public swimming pools rather than let Black families swim, too.
Now, I went to Montgomery, Ala., where there used to be one of those grand resort-style pools and where effective January 1, 1959, not only did they back a truck up and pour dirt into the pool and pave it over, but they also sold off the animals in the municipal zoo. They closed down the entire parks and recreation department of Montgomery for a decade. It wasn't until almost 1970 that they reopened the park system for the entire city. And I walked the grounds of Oak Park. Even after they reopened it, they never rebuilt the pool. And that, to me, felt like this just tangible symbol of the way that a population taught to distrust and disdain their neighbors of color will withdraw from public goods when they no longer see the public as good.
DAVIES: So the result was that in those communities, you'd had - you know, the elites had private clubs and private pools, but poor and working people of all races simply didn't have the public amenities. They were gone.
MCGHEE: That's exactly right. You started to see suburban backyard pools and these membership-only swimming clubs. In Washington, D.C., you saw over 100 new membership-only swimming clubs after you had pool integration. It's a small thing, and yet I began to see examples of the drained pool everywhere, in the way we withdrew from funding public education, in our inability to win universal health care, in the way that we have not innovated around the kinds of public resources that we all need, whether it's universal child care or broadband or high-speed rail. We've withdrawn from the sense of what we could do together in the wake of integration.
DAVIES: We need to take a break here. Let me reintroduce you. We are speaking with Heather McGhee. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." We'll continue our conversation in just a moment. This is FRESH AIR.
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DAVIES: This is FRESH AIR, and we're speaking with Heather McGhee. She is the past president of the progressive think tank Demos, currently the chair of the board of Color of Change, a racial justice online organization. We're talking about her new book, "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together."
You tell a story of how the U.S. government took a lot of steps in the mid-20th century to create a middle class, effectively a white middle class. Let's talk about this. One of the tools was the GI Bill, which provided assistance for education and home financing for returning military personnel after World War II. A lot of returning GIs, but this was not race-neutral in its implementation, was it?
MCGHEE: No, it wasn't. Like so much of the system of the social contract that really created the middle class in the middle of the 20th century, it ended up being filtered through racial segregation. It ended up being devolved down to local administration, which meant that Black GIs, even though they tried to take advantage of the benefits, were, you know, shunted off to vocational schools because they were not allowed in the South to go to the mainstream, you know, land grant colleges. It meant that the, in many ways most significant piece, the Veterans Administration home loan benefit was completely denied to Black service members' families because the Veterans Administration adopted the, at that point, two generation old practice of redlining, drawing lines, which is what the federal government did, around Black neighborhoods and saying these are risky. Just because it's Black people, these are risky. And so we're not going to backstop any loans that banks might give to communities in this neighborhood.
DAVIES: Right. So this had an important generational effect, right? Because those GIs coming back and their families benefited from education and investments in homes, which, you know, built up some assets for those families. And Black Americans were really left behind. And over the generations, that made a huge difference, didn't it?
MCGHEE: There's something so powerful about wealth. And the word wealth connotes, you know, diamonds and yachts. But we're really talking about a little bit of home equity, the fact that you grew up in a house that your parents owned, even if it was not a very expensive house, the fact that your aunt or uncle may have had some GM stock or a CD that they gave you, you know, when you turn 18. It's this kind of intergenerational wealth which was really created by public policy that, from the New Deal through the civil rights movement, was explicit about wanting to create middle class security and just as explicit, often, about wanting to make sure that the benefits of that went to white people only with racial covenants, for example.
The federal government created suburbs by investing in the highway system and subsidizing private housing developers but demanded whites-only clauses in housing contracts to prevent Black people from buying into them. Social Security excluded the job categories that left most Black workers out. You could even consider the New Deal labor laws that encouraged collective bargaining to be a government subsidy to create a white middle class because many unions kept their doors closed to people who weren't white until the 1960s. And so you had this sort of big social contract. And that's really what we see. It's not just a drained pool in this nice-to-have recreational facility. It's the kinds of policies that shifted dramatically in the late 1960s, '70s and early '80s to bring us the inequality era. And that's where we are today.
DAVIES: There was also a major public investment in public colleges and universities and community colleges - right? - which made it cheaper for a lot of people to go to school. I mean, I went to school in the '70s at the University of Texas. And the tuition was low. And my family couldn't afford to send me any other way. Well, they didn't send me at all. I worked my way through it. But that was possible. It was doable. That was when colleges - most college students were white. Over time, that changes. And then we see a different attitude towards the public investment, right?
MCGHEE: It's really one of those issues that I felt was important to include in the book. Back when the public was 90% white and the students who were going on to college were mostly white and, actually, mostly male, government picked up the tab, whether it was state governments funding the costs of their public colleges, like where you went, the University of Texas. And that was, roughly, about six out of 10 dollars would come from the states. And then the rest translated into tuition bills, which often a federal grant, whether it was a GI or the Pell Grant, which was much more generous two generations ago, would pick up the rest. And so you really could get a minimum wage job over the summer and work your way through college.
At Demos, we once did a report showing where every member of Congress went to college and what it cost then and what it costs now just to remind the decision-makers, most of them white, that there's something drastic that changed. And it's not that young people became less industrious or less willing to sacrifice. It's that government walked away from the deal. And it really was around the same time that the college-going population became more diverse and that this conservative, anti-government ethos kicked in in our politics. And that has a lot to do - the social science is now very clear - with these racialized ideas of who is the public and what they deserve. And so you started to see this privatization of public colleges. So now the majority of states rely on tuition dollars for the majority of the costs of college. And we shifted at the federal level from grants to loans.
DAVIES: Tuition is higher. Student debt is far more burdensome. And I think the critical point here is that when this change was made, it affected more white students than Black students in the end, didn't it?
MCGHEE: Absolutely. I mean, 63% of white students have to borrow now, right? This is the majority of white students are caught in this new system, which is just no way to run a country, right? We know that student debt is delaying homeownership, even marriage. It's making it harder for graduates with debt to save for retirement. And, of course - I want to be clear about this - like every aspect of systemic racism, it hits the target first and worst. Black students, because of the intergenerational racial wealth divide that we talked about, have to borrow more in order to go to college, come out owing more and then, because of discrimination in the labor market, end up having a harder time paying it back and, therefore, end up paying more. But the majority of white students are also in debt. This is the way, I think, that systemic racism works in an interconnected society. It hits the target. And it also distorts economic policy decision-making for everyone.
DAVIES: Let me reintroduce you again. Heather McGhee chairs the board of the online racial justice organization Color of Change. Her new book is "The Sum Of US: What Racism Costs Everyone And How We Can Prosper Together." She'll be back to talk more after this short break. I'm Dave Davies. And this is FRESH AIR.
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DAVIES: This is FRESH AIR. I'm Dave Davies, in today for Terry Gross. We're speaking with Heather McGhee, past president of the progressive think tank Demos. Her new book makes the case that racial discrimination in the United States has been harmful to white Americans as well as people of color. "The book is The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together."
So we were talking about how government policy created a middle class in the mid years of the 20th century. And it was, essentially, a white middle class because there were exclusions for African Americans - assistance to homeownership and college education, retirement security, et cetera. It changes kind of in the '70s. And we do know that in the '60s, there were civil rights legislation. Some barriers came down. There was the Fair Housing Act in 1968. Is there a connection here between the growth of the civil rights movement and the assault on some of these racial barriers and the demonization of government among conservatives?
MCGHEE: There is, Dave. And I really wanted to untangle this knot because, as someone who spent a career in politics and policy where, really, the specter of the white moderate - right? - the typical white moderate in the center that we have to sort of hew towards, it's always trimmed the sails of policy ambition, right? We can't get too far out of the center. And the center is defined as this sort of white center-right moderate. But I was shocked to learn that in the '50s, the majority of white people believed in an activist government in a way that is even more radical than today's average liberal.
According to a really authoritative, every-four-year survey, 65% of white people in 1956 thought the government ought to guarantee a job to anyone who wanted one and provide a minimum standard of living in the country. And then, between 1960 and 1964, white support for these big government guarantees for everybody cratered, went from nearly 70% to 35%. And it stayed low ever since. The Black support for this - these kinds of guarantees has stayed high throughout the data set. So I wanted to know what happened. Was this, like, a fluke in the data? I mean, it was just such a dramatic shift.
So it turns out that - you know, what happened between '60 and '64? What happened is that you saw white Americans watch the march on Washington for jobs and freedom. They saw Black activists actually demanding those same kinds of economic guarantees that was part of the set of demands. You saw Kennedy start to speak about civil rights and make promises on civil rights. And then, you know, just a few years later, when Johnson signed the civil rights legislation, the Civil Rights Act and the Voting Rights Act, he knew. He said that this was when he was going to sign away, you know, the South by signing these bills, but - I'm paraphrasing - politically. But what he didn't know was that he was going to sign away the entire white vote for the rest of history, including the last election, right? That was the last election in which a majority of white people voted for what had suddenly become the party of civil rights.
DAVIES: You know, one of the points you're making in the book is that racism hurts everybody, and when whites and Blacks or whites and people of color manage to work together, it's better for everybody. And, in fact, reducing discrimination should yield benefits for everybody. And so taking us back to those years in the '60s, when, for example, you know, the Voting Rights Act, which really did open up voter registration to a lot of places in the South where it had been closed off by poll taxes and literacy tests, et cetera, was there a benefit for working-class and middle-class whites in those states where there was a different kind of racial balance in the voting population?
MCGHEE: I mean, this is the thing, right? It's this zero-sum idea that progress for people of color has to come at the expense of white people. But that zero-sum idea is a lie. It's a lie that has been aggressively sold, I believe, to white Americans by people who are very vested in the economic status quo and in keeping the concentration of wealth and power very narrowly held. And so you really see that in Southern politics, what V.O. Key called the sort of, you know, stranglehold of the plantation politics, where it was sort of one-party rule. And politicians before integration in the South didn't really have to appeal to a broad base about - you know, with promises of a better quality of life. They could just sort of market white supremacy and say, defensively, vote for us because we're going to keep the racial order. And so when the civil rights movement and the Voting Rights Act got rid of things like the poll tax, you actually saw a resurgence of civic life in the South that impacted and freed up poor white people as well.
DAVIES: So there, you saw more public investment in schools, perhaps, and libraries and roads and the kinds of things that improve lives?
MCGHEE: Exactly. So what you started to see was instead of running on white supremacy - right? - and running on segregation, candidates had to run on things that would actually benefit people's lives to get their votes, right? I tell the story of Governor Albert Brewer, who ended up facing off George Wallace. But it was a race where he tried to put together a sort of new fusion coalition that was going to be the white middle class, newly enfranchised Black Alabamians and working-class whites outside of the kind of Black Belt.
And in order to sort of give the promise of what this new politics could be, he called a special session on education and passed 29 bills to say that - you know what? - we actually need to educate our people, because pre-civil rights Alabama was a place where, you know, about half of the state's citizens had no more than an elementary school education, right? It was a place where the inequality and racism really had drained the pool. And so you started to see these big investments, things like universal kindergarten in these states in the South, because politicians had to actually compete for Black people's votes and for white people's votes on issues other than just segregation. And you started to see people realize, actually, there are these things that unite us. We all want good education for our kids.
DAVIES: You know, when we saw the Reagan revolution happening in the 1980s and you saw conservatives embracing, you know, deregulation for businesses, generally suspicious of government, regarding it as inefficient and unresponsive - you know, Reagan saying, the words you never want to hear are I'm from the government, and I'm here to help. And this - it was an effective sales pitch. And, of course, one way of looking at it is that, you know, for elites, for economic elites, for wealthy individuals and corporations, they want to cut taxes, and to cut taxes, what you want to do is cut the size of government. So there's a fit there. And it's not necessarily per se a racist idea. However, when you're selling it, it seems, I mean, it was very convenient to make the beneficiaries of a bigger government welfare moms, people in the inner city. And so there ended up being a distinctly racial appeal to the political pitch, wasn't there?
MCGHEE: There was. And, you know, it's often subtle, although, of course, in recent times it hasn't been very subtle at all. But, you know, there's that famous Lee Atwater quote from towards the end of his life where he really just lays it out. He explains how you go from explicitly racial appeals in the 1950s, and then it started to backfire because the civil rights movement has been effective, right? You don't actually want to call people the N-word. You don't actually want to make your political case for segregation and Jim Crow.
And so then it becomes more subtle. You say, in his words, stuff like forced busing, states' rights and all that stuff. And you're getting abstract. Now, he says, you're talking about cutting taxes, and all these things you're talking about are totally economic things. And a byproduct of them is Blacks get hurt worse than whites. He says, we want to cut this is much more abstract than the busing thing and a hell of a lot more abstract than, he says, the N-word, the N-word, right? It's this idea that once the government sort of moves in a really incredible short period of time from the enforcer of the racial hierarchy - right? - the one drawing the red-lining maps, the entity that is creating the laws to segregate to, you know, in a very short time, that government moves from the enforcer of racial hierarchy to the upender. It's a core betrayal.
And what the right was able to do was say, you know, the government's no longer on your side. It's on the side of these undeserving people of color, these people you've been taught to distrust and disdain. And so you should trust the market, right? Turn to the market. Turn to individualism. Turn to the wealthy for your, you know, sense of identity and trust and your sense of how you're going to succeed in life, right? It's no longer going to be New Deal universal benefits. It's going to be, you know, the market. And that was Reagan's story. And that zero-sum idea that undergirds it is really still so animating in the right-wing language around makers and takers and taxpayers and freeloaders. It's animated in our debates over health care.
The Affordable Care Act is still unpopular among the majority of white people. Support for the Affordable Care Act has never gone over 50% among white people. The anti-government conservative ethos that holds the conservative and moderate wings of our politics together really still has a racialized narrative around who belongs and who deserves - that is what holds it together.
DAVIES: And yet more white people would benefit from the Affordable Care Act than Black people in raw numbers, right?
MCGHEE: That's right. That's exactly right. The majority of the uninsured are white people. I talk to folks in Texas where they refuse to expand Medicaid, where, you know, the rural hospital system is absolutely being decimated. You have this devastating story of a little - of a toddler who choked and her parents couldn't get to a hospital in time because their local, you know, county hospital had closed. And I talked to a, you know, white rural guy who said it's this gut-level rejection of Medicaid and Obamacare and all that it represents. And yet, of course, it's the majority of white people who are going without.
DAVIES: Let me reintroduce you again. We're going to take a break here. We are speaking with Heather McGhee. She chairs the board of the online racial justice organization Color of Change. She is the past president of the progressive think tank Demos. Her book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." We'll talk more after this short break. This is FRESH AIR.
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DAVIES: This is FRESH AIR. And we're speaking with Heather McGhee. She's a past president of the progressive think tank Demos. Her new book makes the case that racial discrimination in the United States has been harmful to white Americans as well as people of color. The book is called "The Sum Of Us."
You write about the subprime lending practices in the 1990s that, you know, in some ways ultimately led to the 2008 financial crash. And there was a narrative here that, you know, these were subprime mortgages, cheap mortgages being pushed on people who probably shouldn't be buying homes and these were irresponsible borrowers making bad decisions. You looked at this and found it's a pretty different story, didn't you?
MCGHEE: That's right. In fact, leading up to the crisis, the majority of subprime and therefore more expensive loans were, A, going to people who had credit scores that would have enabled them to get prime or cheaper loans and, B, weren't for new homeowners. They were existing homeowners being aggressively marketed refinance loans that often ended up stripping equity and ending up in foreclosure. And the first targets for these kinds of toxic loans were Black homeowners.
DAVIES: Right. You know, I remember this. This was described as predatory lending by a lot of activists in the 1990s. And they asked the regulators, you need to do something about this. What happened?
MCGHEE: The experience of being one of the ignored and unheeded and outmatched few who were trying to raise the alarm about this really forever shapes my understanding of economic policy. What happened was, in many ways, these regulators and these lenders, there was a lot of greed, right? People were making money hand over fist. If you could get someone to pay 9% on a six-figure loan versus 5%, that basically doubles your money. That's huge, but it was also a little bit of racism too - right? - this age-old stereotype about Black people being risky, not being good with money. It's a tidy justification for denying Black people the opportunity to make money. And so it was a lot of greed, obviously, but it was also a lot of racism.
DAVIES: A lot of these people are essentially hustled, talked into these complicated mortgages. Many of them are foreclosed upon. And then, of course, the mortgages get bundled into these complicated securities that are sold on Wall Street, one of the things that contributed to this huge crash in 2008 and of course, the irony here is that a racially targeted marketing campaign which takes advantage of African American people. When the crash comes, what's the effect on working and middle class white people?
MCGHEE: It was devastation. When the crash finally came, everybody felt the pain. There were 8 million jobs lost, nearly $19 trillion in lost household wealth. In many ways, so many families that lost property value and houses still haven't recovered from the Great Recession. This is one of the most costly examples of racism ultimately costing everyone.
DAVIES: One of the things you write was that this had an enormous impact on the family assets of African American families. You said the - shrank the wealth of median African American families by more than half between 2005 and 2009. That is an astonishing number.
MCGHEE: Yeah. It's - this is the chapter that is the most - that is closest to my heart, that I get the most emotional about. I share a story of going to Cleveland in 2007 and taking a walk with some community activists who were showing how nearly every home on the street in the neighborhood of Mount Pleasant was no longer in the hands of the rightful owners, had been the victim of subprime mortgage refinances and then foreclosure.
And I remember so vividly just being totally overcome with just the weight of the history of it all, you know, I mean, to really see Black people who finally got their shot at the American dream that was denied so systematically for so long, people who, you know, so many of these were, you know, elderly Black folks who had finally been able to buy a house. And, you know, think about, like, their parents and grandparents in many instances had been, you know, subject to Jim Crow or even were enslaved people. And this machine of racism and greed had just sort of mowed down the neighborhood. And I remember running around the corner, excusing myself and then just falling to my knees and sobbing because it just felt like, why are we so doomed to repeat these mistakes again?
And, you know, I had that moment in 2007. And then, of course, a year later, I'm actually in law school, and I see Lehman Brothers is going into bankruptcy - right? - the company on Wall Street that had invested the most in mortgage-backed securities right at the end of the bubble. And it wasn't until I was writing this book that I learned that Lehman Brothers, the original brothers Lehman, were slaveholders who made their money in the Confederacy, running cotton behind the cotton blockade during the war and setting up the cotton stock exchange and just how tied up it all is.
DAVIES: Heather McGhee, thank you so much for speaking with us.
MCGHEE: Thank you, Dave. It's great.
DAVIES: Heather McGhee is the past president of the progressive think tank Demos. She currently chairs the board of the online racial justice organization Color of Change. Her new book is "The Sum Of Us: What Racism Costs Everyone And How We Can Prosper Together." Coming up, John Powers reviews the new HBO Max miniseries "It's A Sin" about a group of friends in 1980s London whose lives are forever changed by the arrival of AIDS. This is FRESH AIR.