Lecture Notes: Understanding the Economic and Social Impact of Racism

Introduction

• Focus on investigating American economic problems:
  • Rising household debt
  • Declining wages and benefits
  • Shortfalls in public revenue
• Solutions aimed at economic prosperity for more people
• Topics of interest:
  • Tax policy
  • Infrastructure investments
  • Regulatory regimes

Gary's Call-In Experience

• Public television call-in show in August 2016
• Gary from North Carolina admitted to being prejudiced
• Expressed a desire to change and asked for advice
• Response: thanked him for his honesty and desire to improve
• Exchange went viral, sparking significant social media and news coverage

Lessons from Gary

• Friendship formed with Gary over time
• Gary learned about systemic racism and public policy
• The realization that prejudice also causes suffering (fear, anxiety, isolation)
• Questioning if racism backfires on those benefitting from privilege

Research and Findings

• Racism impacts economic policymaking negatively
• Not a zero-sum game: Racism is detrimental to white people as well

Underinvestment in Public Goods

• Example: Montgomery, Alabama's Oak Park Pool
• Historically whites-only public amenities
• Reaction to desegregation: Closing down public amenities like pools and parks
• Long-term consequence of racism reducing public goods

Financial Crisis of 2008

• Subprime mortgages targeted at people of color with good credit
• African Americans and Latinos more likely to get toxic loans
• Stereotypes hindered proper policymaking
• Financial crisis cost: $19 trillion in lost wealth
• Conclusion: Racism contributed to the 2008 financial crisis

Labor and Unionization

• 2017 visit to Mississippi auto factory workers
• Racial tensions affected unionization efforts
• Consequences: Lower wages and inadequate healthcare

Examples of Positive Change

• Lewiston, Maine’s transformation with African Muslim immigrants and refugees
• Collaboration between retirees and newcomers
• Economic benefits noted: Tax revenue and income increase

Conclusion

• Cost of Division: Zero-sum thinking is harmful
• Call to Action: Reject old paradigms of division
• Importance of Unity: Recognizing common humanity and investing in all people

Final Thoughts

• Understand that an injury to one is an injury to all
• Emphasize collective success and investing in our diverse population