Mark Whitehouse writes editorials on global economics and finance for Bloomberg Opinion. He covered economics for the Wall Street Journal and served as deputy bureau chief in London. He was founding managing editor of Vedomosti, a Russian-language business daily.
One question is -- or should be -- central to any assessment of the state of America: Why, more than a century and a half after slavery ended, does the typical black family remain so much poorer than the typical white family?
A new study on housing in Chicago illustrates a big part of the answer: Generation after generation, the U.S. system of real-estate finance has enriched whites at the expense of blacks.
Housing has long played a crucial role in American wealth accumulation: People buy homes with federally subsidized mortgages, build up equity and pass the assets on to their children. But as recently as the 1960s, government policy excluded blacks. In a practice known as redlining, the Federal Housing Administration designated predominantly black neighborhoods as no-go zones for government-insured mortgage loans. The FHA also wouldn't guarantee loans for new mixed-race developments: The presence of even a single black family was enough to warrant rejection.
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