Black America Feeling Heat over Budget

by Christine A. Scheller | Jul 29, 2011 | Feature, Headline News | 2 comments

As the August 2 debt-ceiling deadline looms and our nation’s leaders continue to battle over possible solutions, media outlets are issuing dire warnings about what the impact could be on African Americans. A few are even assigning blame.

The New York Times, for example, hosted a discussion this week about how federal budget cuts will impact the black middle class given that 20 percent of black workers are reportedly employed by the government. Seven writers discussed the issue. Here’s a sampling of what they said:

“This crisis has been at the level of a full economic depression within black communities. …The combination of blocked roads to social mobility, continuing economic crisis, the near unanimous belief among blacks that racism remains a major problem in the United States, and the consequent widespread and growing despair about the prospects for racial equality provide the grounds, if not the inevitability, for an ever more volatile and conflicted racial landscape,” said Michael C. Dawson, director of the Center for Race, Politics, and Culture at the University of Chicago.

“The public sector is the leading employer of black men and the second-largest employer of black women.  … In recent decades, government jobs have been the gateway to the middle class for blacks, the same way that municipal jobs helped the Irish, Italians and other immigrant groups move up to the middle class in the 19th and early 20th centuries. Unfortunately, blacks got on the train as it was coming to the end of the line,” said Walter Russell Mead, Professor of Foreign Affairs and Humanities at Bard College.

“This is only part of the story. Not only are middle-class blacks more likely to be public sector employees, but they are also disproportionate consumers of public sector goods,” said Mary Patillo, Professor of Sociology and African American Studies at Northwestern University. Black children, for example, are more likely than white children to attend public schools. When teachers are laid off, these children are “disproportionately hurt,” she said.

African Americans’ “growing presence in government has actually moderated their policy views, and they are not as liberal as they were during the 1970s and early 1980s,” said Katherine Tate, Professor of Political Science at the University of California, Irvine. “Middle-class blacks, even government workers, are likely to support some downsizing to balance the federal budget. … Having blacks involved, as mayors or state legislative leaders within their parties, makes the politics of these unpleasant decisions more palatable for blacks,” she said.

Meanwhile, The Department of Justice is preparing to file suit against Wells Fargo, the nation’s largest home mortgage lender, for predatory lending that targeted African American borrowers during the housing bubble and steered them into expensive subprime loans, The Huffington Post reports.

This lawsuit follows a similar one filed against the company by the Federal Reserve last week. That suit alleged that “more than 10,000 borrowers were inappropriately steered into subprime mortgage loans or had their loan documents falsified by bank personnel.” Wells Fargo agreed to settle for $85 million, but did not admit wrongdoing, the article said.

The mortgage crisis was really a case of altruism gone awry, according to Scott Walter at Philanthropy Daily. He advanced a book by Pulitzer Prize winning New York Times reporter Gretchen Morgenson and housing finance specialist Joshua Rosner called Reckless Endangerment: How Outsized Ambition, Greed, and Corruption led to Economic Armageddon that blames the housing meltdown and the Great Recession on public-private partnerships. Walter said a “critical turning point” was when, in 1999, Housing and Urban Development (HUD) Secretary Andrew Cuomo “demanded ‘new and aggressive affordable housing goals’ for Fannie Mae and Freddie Mac.” He describes the “structural racism” Cuomo and others were trying to address through this action as a “fairy tale.”

In a review of the book at Forbes, however, John Tamny disputed this notion, saying the “hard right” will love the book because it affirms their belief, “despite basic evidence, ” that Democrats advancement of Fannie Mae and Freddie Mac is to blame and the “hard left” will “be cheered by Reckless” because of their view that “Wall Street, deregulation and greed drove the housing boom.”

“Both sides will finish the book bursting with facts and quotes that will merely confirm views already held deeply. As for those still searching for answers to explain what just happened, they still won’t know,” said Tamny.

In a post about the historic black/white wealth gap at The American Prospect,  Adam Serwer grapples with the denial of structural racism in the budget debate.

“”It takes an incredible psychological commitment to one’s own victimhood for conservative elites to look at numbers like these and then tell people that, while the decline in your economic circumstances is the result of some external, malignant racist force while the much larger destruction of minority middle class wealth over the past few years is due simply to those people being ‘losers,'” said Serwer.

And this morning at The Atlantic, Ta-Nehisi Coates linked to an MSNBC clip in which Melissa Harris-Perry argues that government social engineering did, in fact, lead to the wealth gap between whites and blacks, but in exactly the opposite way that big government critics argue.

Regardless of the cause of the financial crisis, The Grio reports that elderly black woman will likely “bear the brunt of the budget fight.” Citing a study by the National Women’s Law Center, it said “the median annual Social Security benefit for a 65-year-old single African American woman is $10,680” and a proposed bill “would slash Social Security benefits to seniors by 0.3 percent every year they collect a check.” For elderly women who live in expensive urban areas, these cuts could push them into poverty.

Finally, Time reports that “nearly a dozen religious leaders were arrested inside the Capitol on Thursday while praying and protesting a budget that would balance itself on the backs of the poor” and prayer vigils continue outside the United Methodist Building on Capitol Hill.

What do you think? Will Republicans and Democrats resolve their differences by Tuesday? If they don’t, how do you think a default will affect you? What is the role of faith in confronting a crisis like this?