By any fair assessment, the United States has come a long way in the past 150 years in overcoming its original sins of slavery and institutionalized racism.
A century and a half ago – the span of just two lifetimes – millions of Black Americans were held in bondage by force of law and treated as chattel property because of their skin color. At the time, many of the most ardent of abolitionists held and espoused blatantly racist beliefs and publicly embraced white supremacy.
Today, a not insignificant subset of Black Americans enjoys what can be characterized as a middle-class life. Meanwhile, even the most reactionary of political leaders regularly feel obliged to assure all in earshot that they are opposed to racism.
So good for us.
Were it not for the vision and courageous acts of millions of people – abolitionists, civil and human rights activists, politicians, religious, business, and military leaders, and average citizens – one can easily imagine massive amounts of important progress in this realm that might never have occurred.
But we still have a very, very long way to go.
Indeed, the claim advanced in many corners of the modern political right that institutionalized racism – in government, business, education, criminal justice, and other realms – has been effectively conquered is obviously incorrect. (It makes about as much sense as arguing that the decline in human hunger over the last several centuries alleviates the need for further action).
Unfortunately, such claims persist with maddening frequency – often in the guise of extolling the supposed “color-blindness” of modern capitalism and decrying efforts to enact and enforce anti-discrimination rules. You’ve heard this familiar spiel: “corporate America doesn’t care about the color of its customers – just so long as their money in green.”
A Raleigh-based conservative columnist – John Hood of the John William Pope Foundation – advanced precisely such an argument recently in a column in which he rather breezily dismissed an in-depth national investigation into the practices of American mortgage lenders.
The investigation (“The Secret Bias Hidden in Mortgage-Approval Algorithms”), which was conducted by a team of quantitative journalists at the nonprofit news organization, The Markup, and published and distributed widely by the Associated Press, found that race-based discrimination in U.S. mortgage lending remains a huge problem.
The authors found that when they held “17 different factors steady in a complex statistical analysis of more than 2 million conventional mortgage applications for home purchases reported to the government…in comparison to similar white applicants, lenders were:
- 80% more likely to reject Black applicants
- 70% more likely to deny Native American applicants
- 50% more likely to turn down Asian/Pacific Islander applicants
- 40% more likely to reject Latino applicants”
Citing a response to the Markup report generated by the American Enterprise Institute – a corporate-funded group that has at various times cast doubt on the reality of climate change and done the bidding of the tobacco industry – Hood contends that the mortgage industry doesn’t really discriminate in lending because default rates for borrowers of color are higher.
This, Hood claims, shows that the lower loan approval rates for minority borrowers are simply a matter of cold, hard, capitalist calculus. What’s more he says, “the authors of the report are very much aware of this flaw in their argument” but dishonestly “continue to peddle it.”
A review of the Markup report, however, shows Hood to be the one peddling flawed information.
The authors anticipated the critique that they had not accounted for the lending profiles of individual borrowers, and preemptively examined and addressed it at great length.
Notably, they report that one reason they couldn’t gain access to some of the data is because of aggressive industry lobbying to keep such information from being made public. They also explain, however, that “government regulators do have access to credit scores” and that “the [Consumer Financial Protection Bureau] analyzed 2019 [Home Mortgage Disclosure Act] data and found that accounting for credit scores does not eliminate lending disparities for people of color.”
They report further that most lending decisions are driven by a process that involves the use of dated credit scoring algorithms “widely considered detrimental to people of color because it rewards traditional credit, to which White Americans have more access.”
To its credit, the Biden administration recently announced it is taking action in response to the report findings.
As with so many other ways in which America business relates to consumers of color, none of the findings and conclusions of the Markup report are surprising to anyone paying attention or applying common sense.
We’ve long known that capitalism isn’t inherently color-blind. It was profit-seeking American capitalists who, for decades, red-lined aspiring Black homeowners, renters and insurance purchasers and denied them access to hospitals, hotels, restaurants, taxicabs and all manner of public accommodations.
Even today, many such capitalists are quite open about their desire not to make money by selling goods and services to LGBTQ people.
The bottom line: American market capitalism has many strengths, but as the Markup report reminds us, like other components of our society, it is, in the end, a human institution that’s sure to reflect all the foibles, prejudices, hypocrisies and imperfect progress of the mostly white human beings who still dominate it.