William “Sandy” Darity and Kirsten Mullen
June 15, 2020
The origins of this gulf in Black and White wealth stem from the immediate aftermath of slavery when a promise made to provide the formerly enslaved with 40 acres in land grants went unmet—while many White Americans were provided substantial “hand outs” (typically 160 acres) of land in the west. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, calls this “free equity” that could be transmitted into greater economic security and prospects for wealth accumulation to subsequent generations.
During Reconstruction and thereafter, frequently, when Black descendants of the enslaved managed to achieve some degree of prosperity, their communities were destroyed by White massacres. The examples are too numerous to list here, but they include the infamous Tulsa massacre of 1921, when airplanes were used to firebomb “Black Wall Street” and its surrounding neighborhoods.
In the 20th century, Black wealth denial was associated to a large degree with racist policies vis-à-vis home ownership, which led to reduced rates of Black homeownership and lower rates of appreciation for those homes purchased. The situation was exacerbated in the late 1940s when the GI Bill was introduced in a manner that overwhelmingly benefited White veterans. Ira Katznelson reported in his book, When Affirmative Action Was White, in Mississippi, only two returning Black veterans received home buying benefits from the GI Bill.
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