[marcusgarvey]

>My point is simply that living in a segregated society from early on, and the early whispered conversations about Black people as a “they”, set in motion a force very much like compound interest.

Ta-Nehisi Coates' landmark Atlantic article, The Case for Reparations [1], helps explain how this segregated society came to be:

> The American real-estate industry believed segregation to be a moral principle. As late as 1950, the National Association of Real Estate Boards’ code of ethics warned that “a Realtor should never be instrumental in introducing into a neighborhood … any race or nationality, or any individuals whose presence will clearly be detrimental to property values.” A 1943 brochure specified that such potential undesirables might include madams, bootleggers, gangsters—and “a colored man of means who was giving his children a college education and thought they were entitled to live among whites.”

The federal government concurred. It was the Home Owners’ Loan Corporation, not a private trade association, that pioneered the practice of redlining, selectively granting loans and insisting that any property it insured be covered by a restrictive covenant—a clause in the deed forbidding the sale of the property to anyone other than whites. Millions of dollars flowed from tax coffers into segregated white neighborhoods.

“For perhaps the first time, the federal government embraced the discriminatory attitudes of the marketplace,” the historian Kenneth T. Jackson wrote in his 1985 book, Crabgrass Frontier, a history of suburbanization. “Previously, prejudices were personalized and individualized; FHA exhorted segregation and enshrined it as public policy. Whole areas of cities were declared ineligible for loan guarantees.” Redlining was not officially outlawed until 1968, by the Fair Housing Act. By then the damage was done—and reports of redlining by banks have continued.

The federal government is premised on equal fealty from all its citizens, who in return are to receive equal treatment. But as late as the mid-20th century, this bargain was not granted to black people, who repeatedly paid a higher price for citizenship and received less in return. Plunder had been the essential feature of slavery, of the society described by Calhoun. But practically a full century after the end of the Civil War and the abolition of slavery, the plunder—quiet, systemic, submerged—continued even amidst the aims and achievements of New Deal liberals.

[1] http://www.theatlantic.com/features/archive/2014/05/the-case...

[hoopd]

> Millions of dollars flowed from tax coffers into segregated white neighborhoods.

Wait, wouldn't it be the other way around? Inflating property values would increase tax revenue. Even if they were subsidizing white home ownership they may have come out ahead.

It's one of the driving forces of gentrification: if investing X gets the city X + Y in tax revenues then it's an economically sound decision.

[marcusgarvey]

I think the point is that there was a de facto subsidy of segregated white neighborhoods in the first instance.

[hoopd]

Perhaps a de facto or indirect subsidy, but the cost of moving into those neighborhoods went up while the cost of housing for those being excluded went down. It's also arguable that cities made money with these practices (it would take some work to figure out.)

So the subsidy argument falls apart. If it doesn't cost the city money overall and white people end up paying more both for housing and in taxes then the problem with redlining lies elsewhere. (I am not trying to defend redlining, by the way.)

[marcusgarvey]

Even if the cost of moving into the neighborhood went up, the white homeowners surely also benefited from higher home equity values which they can borrow against; realized gains from selling the homes -- for them and for their heirs; better public school systems; better public facilities.

So, no I don't think the subsidy argument falls apart.

[hoopd]

Only if the market goes up enough vs the other neighborhoods and what would have happened. Which maybe you can argue it does. I'm not racist enough to believe that the presence of people with black skin is that detrimental to property values. It seems clear that redlining is about class more than race.

You still have the problem that subsidies are generally thought to cost money. If redlining makes the city money it goes from "this is evil and doesn't work economically" to "this is evil but it makes money."

[hoopd]

Lost another 10 karma overnight for trying to join this discussion without going "hoo, haaa, obviously the whole world is racist and sexist and that disgusts me..." before voicing contrary opinions.