Socked by the economy, it's time for blacks to wise up
Wednesday, February 9, 2011; 11:11 AM
Where do we go from here, black America?
An economic levee breaks, sweeping away millions of our homes, jobs, cars and savings accounts. It's a Wall Street hurricane, and black communities throughout the country are being submerged in a torrent of red ink.
"Our estimates indicate that [the economic crisis] will cause the greatest loss of wealth for African Americans in modern U.S. history," says a report by United for a Fair Economy, a Boston-based nonprofit organization that analyzes economic disparities.
By 2012, UFE predicts, African American neighborhoods could be drained of nearly $200 billion in housing losses alone. That's close to the gross national product of some small nations.
Not all of the news is bleak. The Census Bureau reported Tuesday that the number of black-owned businesses skyrocketed in America between 2002 and 2007. Prince George's County led the nation, with 55 percent of its businesses owned by African Americans. But the census data stop before the recession hit in late 2008. And numerous other reports show that black homeowners didn't fare nearly as well once the housing bubble burst. As this Great Debacle continues, we need to pick up the pieces and start anew - carefully.
One of the more provocative new studies, by Princeton researchers Jacob Rugh and Douglas S. Massey, suggests that a big reason black communities are being hit disproportionately hard is because they are . . . well, black communities.
That makes them easy targets for predatory lenders, the authors say. Blacks who have been underserved are going to be more desperate for a home - even ones they can't afford.
"Simply put, the greater the degree of Hispanic and especially black segregation a metropolitan area exhibits, the higher the number and rate of foreclosures," the authors say.
The solution? Spread out, black people; scatter, if you can. Maybe it's better to rent in an integrated neighborhood, with good schools and more job opportunities, than to own in a black one where property values aren't going to rise that much and may vanish altogether if your neighbor goes into foreclosure.
If you can't move, at least get a new pair of glasses - and wise up.
Obviously, many of us couldn't see well enough to carefully read those fliers posted on utility poles advertising no-interest subprime mortgage loans. Black neighborhoods throughout the country were targeted like crazy, as Massey and Rugh note, with billboards, robocalls, door-to-door cold calls, handbills under the windshield wipers and more.
But somehow we missed the "fine print" on those balloon-loan papers-the itty-bitty type that said: gotcha, sucker. If you already have spectacles, invest in a magnifying glass.