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Decades of housing discrimination have
helped create an enormous wealth gap
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between white and Black families.
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- The enduring legacy of redlining,
the legal government sponsored effort to
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deny mortgages and home ownership
opportunities to African-Americans and
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other minorities continues to undermine
their quality of life. This violation of
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basic civil rights continues to
negatively impact education attainment,
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health outcomes, wealth accumulation,
self-esteem, mortality rates, and
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civic engagement.
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Home ownership has proved to both the
doorway and gatekeeper to success and
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well-being in America. It is at the
core of today's racial wealth gap.
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- There's a very powerful myth in this
country, and that is that residential
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segregation in this country is something
we call de-facto segregation.
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Something that happened by accident.
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Every textbook that's used in American
high schools and middle schools today
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lies about this history.
It talks about how
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northern cities were de facto segregated,
without government involvement.
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They talk about how the Federal Housing
Administration did a wonderful job of
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creating single family homes in the
suburbs for working class families
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without mentioning that the working
class families they had created these
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homes for could only be white.
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- This began a history of excluding people
of color from government housing programs.
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Intended to lower the cost of mortgages
and increase home ownership.
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Segregated neighborhoods
by race using a code system.
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Outlined minority neighborhoods
using the color red.
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Intended to expand the secondary
mortgage market by securitizing
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mortgage loans.
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Community boards often denied
minority veterans mortgages.
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Many minority vets could not be
buried in the same cemetery as whites.
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It wasn't until 1970 that lending to
communities of color began to increase.
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- The way this manifested itself was
through the drawing of maps.
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Different neighborhoods were underwritten
as being riskier or safer and the
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principle component that determined
riskiness or safety from a lending
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standpoint was ethnic
and racial composition.
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- It was at that point that the
real estate developers began to
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drop strings around areas.
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The local banker could choose
who would get mortgages, where.
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So that we could not have gotten
a loan out in the suburbs because
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those were whites only.
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The concept of a middle class Black
only exists in the mind of a middle
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class Black.
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Everywhere else in the suburbs
you are that nigger family on the
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corner of Warren Road
and Boulevard Way.
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- Well the truth is that we've had in this
country generations of affirmative action
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for whites.
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And the sad truth of it is that
whites don't know that that's
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happened or they refuse to
accept it or don't understand the history.
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And what that leads to is this false
kind-of narrative that "I did it myself."
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You know, this Horatio Alger,
individual responsibility narrative.
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- There were many federal, state,
and local policies explicitly racial
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designed to create segregation in
every Metropolitan area in the country.
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And policies that were so
powerful that they still determine
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the racial boundaries of
Metropolitan areas today.
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The Federal Housing Administration began
a program to suburbanize the entire white
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working class population
into single family homes.
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- This is Levittown, Pennsylvania.
A new suburban community of
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60,000 people with it's
giant shopping center,
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winding lanes named for
flowers and trees.
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It is fairly typical of communities
all over America.
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Where families are pursuing the American
dream to give their children a better
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chance in life.
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Nearly all are young people.
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A large proportion are veterans.
For many it is the first house of
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their own and it represents a
major financial investment.
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In August 1957, Levittown,
Pennsylvania attracted
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international attention as
William Myers Jr. and his family moved
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into the three bedroom house.
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They are very close
to the Levittown norm.
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Except in one respect.
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William Myers Jr. and his family are
negroes in an all-white community.
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- If more colored are allowed to move in,
Levittown is going to go downhill.
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- The only way that those developers
could get the capital to do that was
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by going to the
Federal Housing Administration.
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In order to get that approval,
they had to commit
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never to sell a home
to an African-American.
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- Access to leverage allowed
middle-class whites to build wealth.
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- The white families who bought those
homes were able to use their wealth
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to send children to college. And they use
it to bequeath wealth to their children,
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who could use it as down payments
for their own homes.
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- Restrictive covenants ensured that
minorities could not
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buy into white neighborhoods.
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Properties shall continue to be
occupied by the same social
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and racial classes.
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- When Karen and I purchased this home
that was built in 1948,
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we found some documents
in a closet.
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Neither the whole or any part of
said tract shall be sold, rented,
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or leased to any persons or persons
not of white or Caucasian race.
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- Created greatest growth of the middle
class in the history of the world.
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In 1940, 42 percent of white
families owned their own home.
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In 2000, 71 percent of white
families owned their own home.
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- So consequently those 71 percent,
72 percent of white home owners
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who own their own home
should be thankful to the
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federal government for providing
them this opportunity.
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What did not happen or what
happened at the same time
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was that we people of color were
discriminated against and were
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prevented from taking advantage
of those opportunities.
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- The recent housing and foreclosure
crisis were a continuation of a form
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of redlining.
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- Financial institutions practiced
unrealistic credit scoring and
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predatory lending.
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Subprime mortgages grew nearly 250
percent. In 1998, subprime mortgages
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made up 9.8 percent of the mortgage
market. By 2006, they made up 23.5
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percent of the market.
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- And the gap between white home ownership
rates and black home ownership rates is
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30 percentage points larger than it was
back in 1968. In 1968 the typical Black
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family had one-sixth as much
wealth as the typical white family.
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Now it is one-tenth.
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We have gone backwards
since the civil rights era.
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- Latinos lost close to a 170 billion
dollars worth of equity that they
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had accumulated in the home
that they purchased many
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many years before then.
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- When they come to access products,
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the choices that they are given
are limited.
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So you're given, instead of a
conventional loan, you're given
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a special loans that have higher
interest rates or higher fees
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that again set you up for
foreclosure or failure as well.
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- The scandal of your tenure is your
unwillingness to do your job and
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enforce the laws that reduce
housing discrimination.
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- The housing crisis affected all
communities but disproportionally
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devastated minority families.
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Black and Hispanic families lost
nearly 20 years of wealth between
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2007 and 2013.
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Minority home ownership is the
lowest it's been since 1996.
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- Redlining discrimination in the
Asian-American communities,
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alive and kicking.
And in California,
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you'll see that Asians have the
second highest probability
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of going to foreclosure.
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Very comparable to Latinos.
Latinos were 1.4,
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for Asians it was 1.3.
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And so whether it is in home
ownership, rental, small business,
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foreclosure, across the
board there is redlining.
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- Between 1934 and 1962, 120 billion
in FHA and VA loans were issued.
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Over that period of time,
98 percent of the loans
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went to white families
and less than two
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percent went to African-Americans
and other minorities.
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Using the average Home Price Index
between 1934 through 2018,
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those FHA, VA loans equate to at least
three trillion dollars
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in current real estate value.
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Assuming that as loans were paid off
and excess funds were invested in
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stocks and other investments
conservatively, another two
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trillion were created.
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This "White Subsidy" is the major
contributor to the current
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racial wealth gap.
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- So many white Americans experience
this sense of self esteem, a sense of
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you know superiority, if you will.
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This sense of mastery, that they
have created their own destiny
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in their lives. And they have no
acknowledgment of this invisible
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hand that supported them throughout
their lives and not just them, but there's
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a legacy of that invisible hand across
generations that has translated itself
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from the original affirmative action
to trillions of dollars of head start
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ahead of other communities, like
African-Americans, Latinos,
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Native Americans, others who don't
have the same benefit.
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- Children of homeowners are more likely
to graduate from high school, have less
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childhood behavioral problems
and achieve higher college
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graduation rates.
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- In segregated housing, and in
neighborhoods that everybody is
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segregated that tend to be low
income neighborhoods.
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There is the greater likelihood that
the youngsters will be involved in
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gangs, or will be recruited
to be in gangs.
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- I noticed an absence of hope,
an absence of light. These kids
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were barraged with a message
every single day of their lives,
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that they weren't valued,
that they didn't matter.
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And they internalized that.
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And that caused frustration
and anger, and eventually despair
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and a loss of hope.
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There is now a very good science
that shows the sense of not
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belonging, the sense of lacking
self-esteem raises cortisol levels
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in your blood. And cortisol is good for
you when you're in an extremely
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stressful situation, but when you're
constantly bathed in cortisol,
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because you're constantly feeling these
stressors of being marginalized and
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being told that you're less worthy,
less valuable and being in constant
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state of really fear and anxiety,
it changes your physiology completely.
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It makes you more prone
to cardiovascular disease,
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it makes you more prone
to diabetes, it makes
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changes in your brain,
which actually makes it
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more difficult to engage
in what we call executive function.
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This kind of chronic stress which is
driven by the policies that we've
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created is as lethal as any
knife or any gun.
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- Suppose discrimination did end today.
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How many generations would it take
to get to rough equality and wealth
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across races.
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France was seven generations,
more than 200 years.
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- And so when white Americans
hear about affirmative action
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for Blacks, or for Latinos,
they're outraged.
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They think "I've done this
by myself, why can't these people."
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"There's something
wrong with these people."
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- The same programs that were provided
to white Americans, that enabled them
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to accumulate this wealth
through home ownership,
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those same opportunities
have to be provided to us.
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- Imagine where minority families would
be today if their grandparents had the
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same access to wealth through
home ownership that white families had.
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What would the wealth gap be
between white and minority
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families if minorities had the same
access to wealth through home ownership?
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Would there be a gap?