[jewayne]

I'm going to guess that you're a fellow American. That's our answer to everything - build a ghetto. Why make anything nice for everybody when you can make it suck for 79% of us, Hell on Earth for another 20+%, and nice for the privileged few?

[lupusreal]

Most ghettos aren't built to be ghettos. They were built as nice neighborhoods and have nothing structurally wrong with them, but then had criminals and shitbags wreck the place. Ghettoification can in fact be reversed without any changes to infrastructure by simply having nice people move in who give a shit and make an effort to clean up and maintain their properties. This is derogatorily called "gentrification".

Also, your ratios are absurdly out of wack. 79% of the country doesn't live in a ghetto and you don't need to be economically or socially privileged to maintain a nice neighborhood. Most working class neighborhoods are not ghettos, nor even resemble one in the slightest.

[jewayne]

The ghetto is that bottom 20% living in Hell, not the 79% who merely deal with things that suck.

Although I was more referring to our systems more broadly (health care, education, transportation - the topic of this post), let's go with neighborhoods. Are you really trying to pretend that red-lining didn't happen? Or that de facto sundown towns didn't exist at least into the 1980s?

[bluGill]

While things are bad for some people, calling the bottom 20% living in Hell is an exaggeration that is nowhere near correct. People always complain about their situation and think it is somehow much worse than other people, so if you see someone who is in worse shape you can think it is a living hell. However the reality is very different, and if you step back and look you discover most people in that bottom 20% are happy overall despite having imperfections.

[abeppu]

I mean in the US a bunch of them are still the remaining product of redlining policies where racial minorities were allowed to live but banks would not give loans. Housing segregation was planned and enforced. That sounds a lot like intentional creation of a ghetto. And later when cities need to invest in building amenities, or raze neighborhoods to make way for infrastructure, often it's been the minority neighborhoods that are neglected or destroyed respectively. Of _course_ ghettos are the result of planning and intentional policy.

[baggy_trough]

Which is a more likely explanation for why banks did not make loans in redlined neighborhoods?

A) Every bank is run by racists who are sufficiently racist to ignore a profit opportunity

B) The neighborhoods are bad credit risks

[abeppu]

To be very clear, redlining didn't happen just because a bunch of individual bankers happened to be racist. It was a consequence of federal policy -- the FHA would insure loans in white neighborhoods but not in minority neighborhoods, so even for a rational banker uninterested in race, it made sense to issue the loans for white home buyers, and not minority home buyers, even if they were financially qualified. The "redline" choices were not where a bunch of separate banks had independently decided that some "bad risk" threshold was crossed -- they were picked by HOLC/FHA. The FHA also subsidized construction of white housing developments, but not minority ones.

When people refer to "systemic racism", the "systemic" part is typically literal.

Also, I invite you to take a step back and interrogate the examine the implicit premises of your question. I think you're saying that _in a free market of rational agents_, it doesn't make economic sense to not issue loans to people who _aren't_ credit risks, and I would agree -- except housing segregation was always about a heavily artificially manipulated (not free) market, in which people of color couldn't purchase a home in a white neighborhood regardless of their willingness to pay. Public policy bent over backwards to coerce all parties to maintain segregation (e.g. sundown towns, racial covenants, etc), ironically including during cold-war years when the US simultaneously tried to be a global advocate for free markets.

[baggy_trough]

Thank you for pointing out that history. I will look into it further.

[bluGill]

Do you mean today or in 1950? In 1950 I'll go with racists for the majority of banks. Today race is not a factor, but credit risks are still important.

[baggy_trough]

You only need one bank to seize the profit by making a loan. Every single bank was motivated by racism to deny profitable loans?