Fed Leader Says ‘Pernicious’ Effects of Redlining Against Blacks Still Persist

By | September 21, 2020

The “pernicious and persistent” impact of long-outlawed policies like “redlining” Blacks out of white neighborhoods continues to influence the ability of minority families to amass wealth, and requires a deeper look at how those longstanding problems might be addressed, Atlanta Fed president Raphael Bostic said on Friday.

Even as laws have moved forward to forbid discriminatory practices, “progress has been incremental” with the median white household today holding 10 times the assets of a similar Black household, Bostic said in webcast remarks to a conference on Racial Justice and Finance hosted by the Atlanta Fed and Princeton University. “This ratio is not much changed from what it was more than 100 years ago.”

Using Finance to Create Racial Equity: A Call for Change

In this speech, Raphael Bostic, president and CEO, Federal Reserve Bank of Atlanta, focused on housing policy in particular. He also had a broader message:

“I would offer that it is critical to not only recognize the role of individual practices and policies in creating racial inequity but also confront the ways in which institutions and systems perpetuate and entrench racial inequalities in the economy and in our broader society. In our country, we too often assume institutions are benign. But people shape institutions, which can, unintentionally and otherwise, contribute to outcomes that are far from harmless.”

“Something more fundamental must happen,” Bostic said, encouraging researchers and policymakers to “look ‘under the hood’ at our institutions to see and truly understand their design and its implications…We can then find more creative and accurate ways to incorporate race into our models” and “truly create meaningful and lasting change.”

He did not offer specific policy suggestions, but noted how the exclusion of farm and domestic workers from Depression-era social insurance programs excluded a disproportionate number of Blacks from benefits, while both redlining and other housing policies undermined the accumulation of wealth.

That, and other policies, have compounded over time into a persistent wealth gap.

Bostic, the first Black named president of one of the Fed’s 12 regional banks, has been among the most outspoken Fed officials in an evolving conversation at the central bank about economic inequality.

(Reporting by Howard Schneider Editing by Chizu Nomiyama)

Was this article valuable?

Here are more articles you may enjoy.

Latest Comments

  • September 21, 2020 at 5:52 pm
    Jon says:
    The point of the analogy is there is nothing that will say to you that systemic racism exists. The data is there, but you want what, proof of insidious systems in place? a doc... read more
  • September 21, 2020 at 5:50 pm
    Jon says:
    "The analysis does not include federal dollars, much of which is targeted to the poorest communities." Prove it. You just showed that white students are getting more funding t... read more
  • September 21, 2020 at 5:44 pm
    Craig Winston Cornell says:
    Insults from a feeble mind. I gave you 10 chances to establish cause and effect. You didn't. Not once. And if racists hide the fact that they are racists, you have no hope of ... read more
More News
More News Features