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The cauldron always boils over, burning other people, too. The subprime mortgage mess is a perfect example.
A disproportionately high number of African-Americans have been victimized. Many have lost their homes.
The subprime tentacles are far-reaching, pulling down executives, slowing the housing market and other linked industries.
That’s why during this Black History Month, it is important to see how broadcaster Tavis Smiley defined housing issues and other problems of the African-American community and offered solutions in his 2006 book, The Covenant with Black America.
Besides housing, the book examines health care, wealth creation, criminal justice and education issues. Each is important.
Wealth creation and education are the greatest needs for black America. Homeownership is a foundation of wealth creation.
The subprime problem, however, has taken a lot of the wealth and homes from black families. “African Americans stand on shaky ground,” said Marc H. Morial, president and CEO of the National Urban League, in his essay for The Covenant.
The Covenant provided some stark data. African-Americans’ median net worth is $5,998 compared with $88,651 for whites. Black people are more than 13 percent of the U.S. population but have only 1.2 percent of the total net worth of the nation.
“This number has not changed since the end of the Civil War in 1865,” The Covenant notes.
The book says fewer than 50 percent of black families own homes compared with more than 75 percent of whites.
It also notes that blacks are 3.6 times as likely as whites are to get a home loan from a subprime lender and 4.1 times as likely as whites are to receive a refinanced loan from a subprime lender.
Such loans are one to six points over the prime rate. Short-term gains lenders made fleecing blacks and other low-income people are hurting lenders now.
“The growing wealth gap is not just leaving behind black America; it is leaving behind middle-class America and urban America, rural America and Hispanic America, too,” Morial wrote. “When one community in America suffers, our entire economy suffers.”
Solutions offered in the book include people investing in black communities, monitoring and preventing predatory lending, establishing tax-free homeownership savings accounts and raising the minimum wage to a living wage.
In his essay on public education, Edmund W. Gordon, a professor emeritus with Teachers College at Columbia University, said the nation’s schools are becoming increasingly diverse.
From 1972 to 1998 students of color went from being 22 percent to 38 percent of children in public schools.
It is expected to approach 50 percent in the next few years.
That makes closing the achievement gap an urgent concern.
Gordon notes that “the prosperity of our nation will be increasingly dependent on the knowledge and contributions of students of color.”
To close the achievement gap, The Covenant’s suggestions include reading to children daily, creating clean and quiet spaces for homework, encouraging frequent library use, getting involved in the PTA and similar programs and taking children to museums, science centers and other educational places.
Elected officials also must provide better financing for education and good schools.
If these things happened, African-Americans would benefit. So would everyone else.
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