This article first appeared in a St. Louis Beacon, May 20, 2011 - The economic inequalities that African Americans face must now be viewed through the lens of "post-racial America" -- a complicated time of hopefulness and sobering reality that has followed the election of the nation's first African-American president, says sociologist Melvin Oliver who will speak Saturday at the Missouri History Museum.
Oliver is a noted expert on racial inequality and poverty who has been researching the issues for more than 30 years. He and co-author Thomas Shapiro wrote the book "Black Wealth/White Wealth'' that analyzes systemic barriers to wealth accumulation for African Americans: low wages and limited access to capital, along with social and political policies that have contributed to those inequalities since the Civil War.
Oliver says it is important to consider inequality -- past and present -- in an America that celebrates the election of President Barack Obama.
"It's the national narrative that says we have a lot of hopefulness about changing the direction of events and social trends. Part of that narrative is that no longer can African Americans claim any kind of victimology because we have a black president and the notion is that we've really moved beyond race,'' Oliver explained during a phone interview Thursday. "I want to focus on the material basis of life and ask the question, 'OK, we know we have transcended race, but are we working in the right direction?' ''
In his talk on Saturday, Oliver said he plans to focus on three pillars of material well-being: income; wealth, which includes the stored assets used to plan and strategize about social mobility; and government transfer payments -- or subsidies -- which can include everything from food stamps for the poor, mortgage interest tax deductions that benefit the middle- and upper-classes and a tax code that benefits the wealthy.
"All three of those pillars have been under stress and strain in terms of equality over the last 30 years and, in particular, during the Obama administration,'' Oliver said. "There are signs that we are not going in the right direction. We're actually going backward.''
Oliver said that his research on wealth shows that the gulf between African Americans and white Americans has widened more in the past five or six years than at any other time in the nation's history.
"Think about the narrative in which we are transcending race, while our policies and the functioning of our economy continue to place African Americans at the bottom of the economic order,'' he said.
Oliver said the Obama administration's policies to moderate the growing inequality of income trends haven't been particularly successful.
"And in terms of transfer payments we've seen the social safety net tatter and tear over the past 30 years. Now we're talking about getting the budget under control, and the only thing we go after are transfer payments to the middle class and to the poor, and we keep transfer payments to the rich,'' he said. "It's very difficult to imagine that you could have a more progressive president than Barack Obama and a more negative set of outcomes with him as president.''
Oliver earned his Ph.D. in sociology at Washington University and in 2004 was named a distinguished alumnus by the university. Before joining the University of California, Santa Barbara, where he is dean of the division of social sciences, Oliver served as vice president of the Asset Building and Community Development Program at the Ford Foundation. During his tenure at the foundation, the assets program helped develop the Self Help-Fannie Mae program to secure home mortgages for low-wealth households and the American Dream demonstration on Individual Development Accounts. Oliver also serves on the board of the Urban Institute in Washington, and is an advisory board member of the National Poverty Center at the University of Michigan, Ann Arbor.
Here are more excerpts from the Beacon's interview with Oliver.
Would you say that the timing of Obama's election -- in the midst of the nation's economic meltdown -- has had a major impact on administration policy?
Oliver: Obviously, Obama became president in a time not unlike the presidency of Franklin Roosevelt. The country was at an economic crossroads.
Each of those presidents had to make some difficult choices. Some of Obama's choices were constrained and not as progressive as Roosevelt's choices, and he has since been fighting a rear-guard action with people on the three dimensions -- transfer payments, income and wealth -- that have been on the side of concentrating the benefits of society in the higher classes and limiting the benefits to the lower and middle class. He's constantly in a struggle. And Obama's nature is to always look toward the middle, and in looking toward the middle, he creates a context in which things get worse instead of better.
And it's very difficult for me to say that. I grew up in Cleveland, Ohio, and when Obama was nominated I thought, well, I'm not going to have Ohio lose the election for him. So I went and did door-to-door campaigning in the neighborhood where I grew up. I had very high hopes for the Obama administration, and I still think that he's worthy of our support. He's the best thing we've got going. But it just shows you the power of the trends that are systemic in American society and the political strength of forces that are very opposed to equality in America. They're much more focused on making sure that the economic elite gets those benefits.
I have talked to the administration about our concerns about policies that are not productive in terms of generating wealth for the masses of people and especially people of color. We've tried to give them ideas on things they can do. We understand it's very difficult.
We are a constitutional government that has divided powers, and Obama is in a situation where it is very difficult to do things.
As vice president of the Ford Foundation, I recognized after a while that while I had great ideas I couldn't always implement them. It's not like everyone agrees with you. There's constant debate and compromise. What you want and what you think is objective isn't always what you can do.
Current numbers on income and wealth for black Americans and white Americans seem even more disparate than the data that you used in the first edition of "Black Wealth/White Wealth" in 1995.
Oliver: This is the disappointing aspect of our post-racial America even while we applaud a post-racial society for having a black president and transcending all of our prejudices -- and for voting for someone who 40 years ago we could never have imagined could be president.
At the same time, trends that have been occurring for 40 years are continuing to fester and to get worse. I go back to the '70s because that is when you see the beginnings of the unraveling of the '60s, which was a decade in which you saw a concerted attempt to address racial inequality. In the '70s, you saw the beginning of the ascendancy of a nation that said, "We're tired of this. We're not really willing to make those kinds of investments."
So, is this really a "post-racial America?"
Oliver: No, but it is a narrative that has stuck because of the oversized role in the American imagination that an Obama presidency has created. Let's face it. This is not even a racial thing. But blacks, whites -- everyone -- we were just taken with this.
There are times when the narrative overtakes reality. And for African Americans, that narrative is still part of the way we respond politically now. There is an acquiescence or quietness of critique in the African-American community toward the Obama policies. We don't want the guy not to be a success. But at the same time, if you look at unemployment rates, the unemployment rate is 16 to 18 percent in African-American communities. If this were [President George W.] Bush, we'd be on top of him.
But we have to always place real data in front of the narrative and ask the question: Is that narrative reality? If it's not reality, what keeps that narrative going?
And how can you criticize Obama when the dominant critique [the birther movement] is so crazy, and you're going to pile on with something legitimate? The man is crucified in so many kinds of ways, silly ways. In ways that people are taking more seriously than they should have. It makes you want to pull back.
And that's why we have places like the Missouri Historical Society and universities where we can have the debate. It's not about caricaturing the man or saying that he's completely wrong, but it's analytic and it's hopefully corrective and helpful. No one voted for him to balance the budget, but yet all of a sudden that is the dominant thing. If you balance the budget, you're going to hurt a lot of poor people and middle-class people.
Take the example of Wisconsin. African Americans are overrepresented in government, and all of the budget cutting is about cutting government. The black middle-class labor market is dominated by government. They're going to lose jobs disproportionately in that debate. So we need to think about the implications of these decisions to focus on one thing, vis-a-vis another.
You updated "Black Wealth/White Wealth" on the 10th anniversary of its publication, about the time that the subprime mortgage market began collapsing. If you were writing another version of the book today, what would you say?
Oliver: That's a good question. [Co-author Shapiro] and I have been criticized for being boosters of homeownership, for example. And people have said, "The policies that you projected were policies that got us into trouble.'' But if you look at the subprime crisis, African Americans were actually guinea pigs for subprime mortgages. We were given the bad loans earliest.
When you look at the actual extent of the crisis, it was significantly overrepresented by African-American [borrowers], but in terms of dollar amounts, it was white [borrowers]. Once you got through 2005 through 2008 these loans were for very large properties and practically anyone who was trying to stretch their dollar. African Americans were the guinea pigs who helped people perfect the tools that became the subprime crisis. And even with those loans that wasn't enough to create the crisis. The crisis occurred in packaging those loans and selling unsecured debt and then layering risk over and over again to where a billion dollars worth of loans became multiples of thousands of billions of dollars of loans.
African Americans were not the cause of the subprime crisis. The cause of the crisis is what happened downstream of those loans -- and that is now accepted as fact. What's interesting about it is if you look at the savings and loan crisis that happened in the '80s and '90s, almost 50 bankers were sent to jail. We haven't seen one banker sent to jail on a subprime crisis that almost brought down the world's economies.
Do you still believe that homeownership is the best way for poor Americans to accumulate wealth?
Oliver: Homeownership will always have a very important role in asset building, but we also must remember that homeownership is not just about asset building, it's about family stability, neighborhood stability. It's about good schools. All of these things are correlated with high rates of homeownership.
My concern is African-American communities in which we've seen a devastating rate of foreclosure. We are starting to see new markets for home ownership developing in those communities, but African Americans are not participating in those markets. They are becoming investor markets. We have lost homeownership in a lot of communities, and those communities are now going to be owned by people outside those communities. That does not make for a positive trajectory for those communities going forward.
I am still a believer in homeownership. I think it has important things -- what economists call externalities. And I still think it is a very good investment for African Americans.
What we're seeing is a free fall in the housing market, and the Obama administration has given up any leverage over banks. All of the foreclosure programs that the Obama administration has put forward have all been voluntary on the part of banks. The programs have not been successful. Banks are very slow to respond. They hold out to the end, and they are making very few reorganizations of the loans.
If I were to advise a young family now, I would say: Look at what your income is, what kind of house you can afford. When you believe you can afford a house that you like and is consistent with the market, it is a decent long-term investment. Will it be a good investment for one, two three years? Probably not. But for 10 years, probably so.
The importance of saving America's middle class has become part of the nation's dialogue, but as you point out, there isn't "one" middle class.
Oliver: People have talked about this a lot. There's a hollowing out of the middle of the class stratum in American society. There are more people who are doing quite well, and there are more people who are doing quite worse. There are fewer people in the middle than before. And it is this middle that keeps society going.
What characterizes a third-world country is extremes of rich and poor. America has always been a country with a strong middle class, and we're seeing that diminution. The black middle class has always been a very vulnerable group and when I talk about the three legged stool -- income, wealth and transfer payments -- they're not doing that well now. They didn't have a lot of wealth, and that's close to being gone.{jcomments on}
