How ‘government created ghettos’

1940s government poster

Government poster, early 1940s (via Wikimedia Commons)

The existence of poor, largely African American communities in urban areas across the nation — as in Baltimore, Maryland, and Ferguson, Missouri — is “not the unintended effect of benign policies” but of “explicit, racially purposeful policy that was pursued at all levels of government,” Richard Rothstein, a senior fellow at Berkeley Law and a researcher at the Economic Policy Institute, tells Fresh Air’s Terry Gross in a radio interview this week. “We are reaping the fruits of those policies.”

Revisiting themes he’s explored in recent written pieces, Rothstein describes the nuts and bolts of how government — from the Federal Housing Administration to Veterans Affairs and state and local entities — along with real estate agents and banks, fostered housing segregation and helped create a large wealth gap between white and black America.

He talks, for instance, about a practice used to panic white homeowners into selling, after blacks moved into a largely white neighborhood: Speculators would recruit black people “to walk around the neighborhood pushing baby carriages. They would phone families in the white area and ask for names that were stereotypically African American. … to give the impression that this was rapidly turning into another black slum.

“The white families who panicked would then sell their homes to the real estate agents or the speculators at prices far below what they were worth. The speculators would then turn around and resell the homes to African Americans at far more than they were worth because of the restricted supply. This policy was called ‘blockbusting’ and it was a policy that was condoned by state licensing boards throughout the country.”

Listen to Rothenstein’s conversation with Terry Gross.