Way to Go, Ohio

I spent Saturday canvassing in a rural part of Ohio near my hometown of Oregon. It was a great day full of unexpected delights.

The whole structure was not what I expected. I figured that I'd be meeting up with a few people in their early 20s decked out in Obama gear and full of a take-on-the-world attitude. I thought we'd be walking up and down the small town home to the staging area. And, I thought it would last about two or three hours.

Instead, I found myself among a bunch of ladies in their 60s and older. I was paired with a woman named Fay. Fay is 80 years old, spry, and witty. As she told me, she's spent her whole life within a mile and a half of the railroad tracks that run through the township. She'd also been a school teacher in the area. With that kind of experience, she knew just about everything about everyone in the township. It was amazing as she would correctly guess the last names at various addresses we stopped at.

These addresses were along township roads. Some of them the homes of farmers. Most of them not. But, all of them spaced far from one another in that rural pattern so common in Ohio. To get to each of them we didn't walk. Instead, we hopped into Fay's big white pickup truck and drove from house to house. I'd hop out at each place and strike up some conversation and pass out some literature for folks as we met them. Occasionally, Fay would jump out too to catch up with some of the folks she knew well.

The people we met, we're kind and considerate. If they felt it, they never let on hat they found our visit to be annoying or intrusive. Some folks even invited me in to keep warm while we talked. It was really no surprise to me. This is the way people always were when I was living back in Ohio, especially those farther out. There's a sense of knowing that if someone is actually taking the time to come over, they probably have something important to say. After all, it's not like you can just walk next door or across the street.

At the end of the day ,those who would tell us favored Obama over McCain by a margin of about 3 to 1. And, I really think that I answered a few questions in a way that turned people from leaning McCain to leaning Obama. I tried to urge those folks to vote early.

Not one person brought up Bill Ayers or Islam. On person asked me if Barack Obama changed his name. I told them no, but he did go by Barry in high school. I forgot to say, "Do you really think he'd change his name to Barack Obama?"

Most people were worried about health care, energy, and the economy. People are very afraid of slipping out of the middle class. They feel unsure about the future of the economy, wonder how they'll afford to pay for prescriptions and medical care, and think we need to end our dependence on middle eastern oil. I had a long conversation with a guy about energy and drilling. And, I talked about how a company near by called First Solar would benefit and likely expand from a policy change that focused more on domestic more green energy. He seemed to go from undecided to Obama in that conversation.

People were also freaked out about McCain's plan to tax health care benefits. They do NOT like that idea one bit. I never got this far with any of them, but I think the tax on benefits would also be a bigger hit for small businesses (that would also have to pay taxes on that portion of payroll) than any Joe the Plumber scenario. It would be very harmful to small businesses and large businesses too.

Anyone that brought up the war brought it up to say we need to get out of Iraq immediately. In fact, I was stunned at how many people stated that unprompted. I didn't really want to talk about the war much. My plan was to focus on taxes. But, people kept adding on that we're wasting money we need and losing soldiers we love in Iraq just to keep the oil flowing. It's clear that many people feel we're only there to protect the oil.

All in all, it was a good day. The people I met were all white and almost all in their 50s. The fact that they were 3 to 1 for Obama made me feel a little more confident. There were also a lot of undecided voters yet and in many cases, they seemed like folks who would have voted for a more moderate Republican ticket. A lot of those undecided folks thought the Palin selection was a poor choice made purely for political reasons.

I think this part of Ohio is ready for Obama and the change he promises.

Geography and the Invisibility of Poverty

Folks, today is blog action day and I'm joining in on the fight to eliminate extreme poverty in Illinois. You can do your part as well by going to the From Poverty to Opportunity web site.

Poverty is everywhere. But, it is most concentrated and noticeable in urban and suburban communities of color and rural towns and villages across the country.

I've written previously about the geography of inequality. It is clear that America is geographically divided into places of opportunity and places of struggle. This geography is a powerful force that often has an ability to squelch individual efforts toward self-improvement and actions to ameliorate despair. Documented in so many places (like this, this, and this) poverty isolation is certainly a broad structural barrier to opportunity and equality.

This isolation further frustrates efforts to eliminate poverty by rendering it invisible. By spacializing poverty and opportunity, those of us not in poverty benefit from the privilege to ignore our struggling brothers and sisters. Even during an age where the middle class is shrinking and the economy is failing, the geographic structure of our lives allows us to complete our day-to-day tasks without significantly interacting with those living in poverty. It encourages us to abandon those less fortunate than ourselves. And, it leads us to believe that we're insulated from the possibility of scarcity in our lives.

Perhaps most importantly, this isolation means that when we try to construct structures of opportunity we too often ignore the input of those in need of these structures. It is imperative that those living in extreme poverty must be engaged in the development, implementation and enforcement of the policies that grant freedom from poverty. Our separation discourages cooperative involvement and diminishes our capacity to value all voices and perspectives.

Hopefully, today will be the beginning of greater solidarity between those living in poverty and those living more comfortable lives. Hopefully, we can all reflect today on how the way we value the least fortunate among us is a reflection of how we value basic human dignity and our own integrity. Today is a chance to reflect. But, more importantly, it is a chance to get involved in the cause of eliminating extreme poverty and getting engaged with those we frequently fail to acknowledge.

Not so Calculated Risk

Calculated Risk is fond of going on about how many homes are "underwater" -- where homeowners owe more on their mortgages than their home is worth. It seems like something we should keep an eye on but I disagree with the conclusions they consistently make stating that these homeowners are likely to default and/or "mail in the keys".

People buy a home for a lot of reasons. One is an attempt to make a smart investment. But, in most cases, that investment is a 20 to 30-year investment, not a 3 to 5-year investment. More importantly, people buy a home to have a place to live! They are not going to simply mail in the keys because their house lost value.

For starters, they often don't even know if the home is worth more than they owe because they don't know how much they owe at any one time. They might know the house has decreased in value but that doesn't mean it's worth less than they owe. And, it also means people have to give up on their dream of home ownership, something many are unwilling to do.

Calculated Risk is a great site, but I think they're taking too many liberties extrapolating on a short-lived, geographically-focused phenomenon. i wonder if there's any historical evidence of folks doing this in past housing busts. If not, then Calculated Risk should consider much more likely factors in defaults such as job losses and catastrophic payments.

How We Got to the Bailout

Here’s my slightly-less-brief-than-my-comments-at-The Weblog synopsis about what happened in this crisis.

In the mid-1990s sub-prime mortgages begin their steady climb in market share.

Around the same time payday and title loan lending begin to take over America’s corners not already claimed by Walgreens, CVS, and Starbucks, especially in poor neighborhoods where there were no Starbuckses.

In 1998, there are a number of us (me as just a beginner in the movement) that are very loudly (or as loudly as we can) warning that this is problematic and needs to be re-evaluated. At this time, the real problem is that loans are being made with terms that are impossible or nearly impossible to repay. The borrowers are folks that should be able to get better terms. About 90% of the people affected negatively are not white so the problem is ignored.

In the early 2000s, a number of states pass anti-predatory lending laws or regulations. Around the same time, banks that are regulated by CRA are beginning to get in to the game more often. Chase and Citi and WaMu among others buy dedicated sub-prime lenders and designate them “another channel for mortgages” — the wholesale channel (because brokers, not loan officers, are the point of contact for the borrowers). That channel is the channel where people of color get worse terms than they could have gotten through the banks regular retail lending. In Georgia, possibly the state with the best protections passed, the banking industry (with the help of Wall Street and Fannie and Freddie) get the law repealed. Ohio passes a law that essentially is pro-predatory lending in classic Republican-controlled ironic-naming-of-bills fashion. The problem is still largely ignored and still predominantly harms poor people, seniors, and people of color (and most often people who fit all three categories).

Wall Street begins its fury to buy these loans because they offer a higher return than traditional mortgages. Sub-prime loans often have egregious fees, penalties, interest rates, and adjustments that make them look on paper like a better ROI. Even with state regulations, some of which are challenged by federal regulators, there's still room to soak "unsophisticated" borrowers.

(I should add here that some banks and brokers are doing their level best to stay out of this mess. But, it is becoming increasingly difficult to only lend based on sound practices and still get any significant market share.)

In the mid 2000s, competition takes hold in a top-down manner rather than a bottom up manner. This is where things really fall apart. Previously, the problem is more contained with a few banks and investment companies. Now, everyone wants some of that high return. To increase market share, the different investors start offering money with fewer strings attached (see This American Life’s “The Giant Pool of Money” for more detail). Now ridiculously poor judgments are being made and really poor loans are being made and sold into the secondary market.

Fannie and Freddie have lost much of their market share, dramatically, and feel the need to keep up with Wall Street. They have to compete in order to remain relevant and stable. This leads to the eventual conservatorship.

At a point near the beginning of 2006, the investors start to realize their mistakes. So, they accelerate and sophisticate the ways they hide their mistakes through multiple slicing and dicing of good and bad loans in their portfolios. The Urban Institute has a good description of just how incredible this all gets.

The hope is that the increase in home values will continue without pause and save everyone from their poor mistakes simply through inflation. It does not change lending behavior. The brokers have nothing to lose since they’re in and out of the process in a matter of days. Banks think they have nothing to lose because they sell their loans to Fannie, Freddie, and Wall Street. Apparently, Wall Street feels invincible. It just continues to buy these bad loans despite the fact that anyone paying attention, with an iota of financial knowledge, can see this is about to crash hard.

Around the same time, the problem is beginning to get attention because middle class white folks are now beginning to feel the effects as they begin to fail to pay their adjustable rate mortgages.

House prices fail to increase at high rates, then begin to decline or stabilize. Fannie and Freddie can’t capitalize enough. The feds take them over. The reality is now unavoidable.

The secondary market collapses/implodes, especially Wall Street (Fannie and Freddie are essentially still in business). The banks can't sell their bad loans and haven't held on to enough good loans in their own portfolios because those were needed to hide the risks when selling to the secondary market.

We’re $700b short, or maybe its less than that. No one knows for sure because of the shell game upon shell game upon shell game that kept this all going for far too long.

Real School Choice

If John McCain is serious about school choice being a civil rights issue, perhaps he'd do well to revisit his party's longstanding efforts to ensure that public school districts remain segregated.

It was under the Nixon administration that the federal government fought busing programs and programs that made it possible for poor, minority, inner-city school kids to go to richer, whiter, suburban schools. The Nixon administration could have used its power to withhold Community Development Block Grant funds from municipalities, counties, and states that would not embrace affirmative measures. Instead they fought these measures and Republicans have made their resistance to regional, racial equality a hallmark of their policies ever since.

The Nixon administration even assisted with the fight against school integration in the (unfortunately) landmark case of Milliken v Bradley -- a direct attack on Brown v Board of Education.

Of course, this mentality has continued to today's Supreme Court in the recent school integration cases that included Justices Roberts and Alito -- the type of judges McCain says he wants on SCOTUS -- arguing against voluntary integration.

Here in the Chicago area, State Senator James Meeks used just this idea in his protest against unequal educational opportunities in the region.

The solution isn't to require poor people pay for private education while richer people get public education. It's to equalize the quality of education for everyone by removing the arbitrary barriers of school districts that perpetuate racial, ethnic, and income inequality.

Fannie Mae Ends Declining Markets Policy

In just a few months, Fannie Mae has ended their declining markets policy in favor of a nationwide policy that requires reasonable down payments on loans regardless of geography. The policy is a win-win for Fannie and the fair housing community as it addresses both sound underwriting practices and fair lending concerns.

You can read Fannie Mae's press release here or this from Reuters.

update: Freddie Mac follows suit.

The State of Fair Housing 2008

This week, The Chicago Area Fair Housing Alliance released its 2008 State of Fair Housing Report for the 6-County region. The report provides statistics on the frequency of discrimination complaints in the Chicago region and a narrative on the structure of segregation and inequality throughout the region.

It also includes a Blueprint for Change that recommends ways to foster integration, improve access to housing options, and promote sustainable development throughout the region.

You can view it here.

Lebetter v. Goodyear and the Future of Civil Rights

In case you don't pay attention to civil rights, I'll give you the quick summary of Ledbetter v. Goodyear. Ms. Ledbetter worked for Goodyear a long time, decades actually. And, when she retired she became aware that she made about $6,000 less annually than her male cohorts. As this was the first she became aware of the disparity, she filed a complaint against Goodyear for the pay she didn't receive on the basis of pay equity.

No one disputes Ms. Ledbetter's qualities as an employee of Goodyear. She was a fine employee. But, the Supreme Court ruled against her claim because she filed it too long after the company violated her rights.

This ruling is due to what employment discrimination folks call "temporal proximity" -- in other words, was the complaint filed shortly after the alleged act of discrimination. Shortly is often considered within 90 days but can be even shorter in some cases. The problem with the Supreme Court's ruling is that temporal proximity is really aimed more at retaliatory actions and not, as in Ms. Ledbetter's case, systemic acts of discrimination. The Court is simply wrong in its ruling.

What's even worse is that with this ruling, the Court essentially said to employers, "You can discriminate against your employees as long as they don't find out in time."

Congress is attempting to amend the laws so that the EEOC and the courts will have to allow for longer periods for filing cases. The House passed an amendment to make the language fairer. Republicans are holding it back in the Senate. The President is promising to veto the bill.

Integration Makes the Tribune

The Chicago Tribune has written an article about integration and the Oak Park Regional Housing Center's new program opening a Berwyn Housing Center. The article features some quotes from me as the Executive Director.

As with all news articles, there is never enough space to thoroughly address everything. Because of this, there are two things I'd like to clarify:

1. The Housing Center has outstanding support from the community and few detractors. Yet, quotes from detractors are included while quotes from supporters are not.

2. The additional service area was never intended to have a detrimental effect on black families hoping to move to Oak Park. We provide, and always have provided, listings in Oak Park to all clients regardless of race.

In addition, we are aware of the barriers, including perceptual barriers, African Americans face when considering affirmative moves in other communities in the western suburbs. The second service area was established to assist black clients interested in those other suburbs.

Realizing Integration

I posted a very similar entry at From Poverty to Opportunity.

In July 6th's New York Times, David Brooks wrote a column that lamented the failures to integrate our society. In it, he suggests that we should give up on integration and accept that people want to live in a segregated society. It's a depressing read both for its suggestion and for the inaccuracies that Brooks uses to support it.

Brooks isn't alone in his thoughts. Many wonder why it is that we haven't integrated. They usually begin with the same premise. Since the civil rights movement guaranteed people the right to live wherever they want, they must be living apart because that is what they prefer.

This is counter to what most research shows. In actuality, people of all races express interests in living in diverse communities. People of color often express an interest to live in communities that have similar demographics to the regions they live in. Even whites, who express an interest in living in communities where they make up the majority, still indicate preferences to live in diverse neighborhoods. A recent example is the Chicago Area Study performed by professors Maria Krysan and Tyrone Foreman at the University of Illinois at Chicago that found this exact result.

Unfortunately, providing rights is not enough. In order to undo generations of segregation, we need programs that actively -- or as we say in the business, affirmatively -- further fair housing rights. In fact, the Fair Housing Act and many state human and civil rights acts have language explicitly stating that government has a duty to affirmatively further fair housing. Alas, HUD and its state equivalents frequently ignore this duty.

Meanwhile, real estate steering, linguistic profiling, and hate crimes are among many problems that continue to reinforce segregation.

The evidence shows that segregation itself perpetuates racial and ethnic inequality. This is something else Brooks fails to consider as he suggests that maybe segregation is just fine. The Chicago region is an excellent example of how patterns of racial segregation correlate almost exactly with patterns of opportunity*. In the 6-county area, 94% of African Americans and 83% of Latinos live in low-opportunity communities. This is roughly equivalent to the 86% of families in poverty that live in low-opportunity communities.

In these low-opportunity communities residents suffered from:

• fewer jobs and transportation options
• poorer schools
• higher crime
• less green space
• more pollution and health problems
• slower appreciation in housing values and older housing stock
• fewer day care slots
• reduced civic participation

As a result, the communities have stretched their fiscal capacities to the limit, making it difficult or impossible to provide additional services or incentives to equalize opportunity in the region.

Simultaneously, high-opportunity communities continue to add jobs, improve schools, expand infrastructure, and offer lower taxes. Yet, while high-opportunity communities make up 40% of the region, they have very little affordable housing -- only 4% of the housing affordable to households making 30% of the area median income. Consequently, only 9% of those in poverty live in high-opportunity communities despite the fact that they make up 29% of the total population of the region.

The geography of segregation makes it easy to provide for some while denying others. As a result, it exacerbates every problem we face in America. Giving up on the dream of integration is essentially to give up on the dream of equality and the guarantee of basic human rights we all deserve.

see Lukehart, John et al., The Segregation of Opportunites

Affirmative Action part 1.5

Eric Alterman was kind enough to print a comment I made regarding Affirmative Action on his blog.

I'll try and get back to the Affirmative Action argument in a week or two.

MLK Day 2007

This day is a good day to remind ourselves that The Dream has yet to be achieved. That discrimination still occurs. That segregation still determines the fate of so many. That the civil rights movement is still moving.