Oct 21, 2019

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CCLP’s 2024 legislative wrap-up, part 2

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CCLP’s 2024 legislative wrap-up, part 1

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs.

Baradaran Offers A Brief History of the Racial Wealth Gap in America

by | Oct 21, 2019

The gap between the racial haves and have-nots in America has remained stubbornly consistent for the past two centuries. Indeed, the black community owned less than 1 percent of the nation’s total wealth when the Emancipation Proclamation was signed in 1863. Unfortunately — at least in terms of assets –not much has changed ever since.

“To understand why we still sit in a wealth divide, we must understand the history and systems that were created because of racism,” said CCLP Executive Director Tiffani Lennon, in remarks introducing Merhsa Baradaran, Esq., the keynote speaker of the Colorado Center on Law and Policy’s Sixth Annual Pathways from Poverty Breakfast, Oct. 17 at History Colorado Center. Founded in 1998, CCLP is a nonprofit advocacy organization that fights for economic and racial equity by focusing on food, housing and income for all Coloradans.

Baradaran opened her presentation with some daunting recent statistics. She cited 2015 data from the St. Louis Federal Reserve that showed the average net worth for white families with a college degree was $360,000. By contrast, the same metric for black families with a college degree was only $32,000. The data also show that white families without a college degree had an average net worth of $80,000 while black families without a college degree claimed just $9,000.

Historical and structural reasons – including white supremacy – have prevented communities of color from breaking through these systemic barriers. Baradaran’s book, The Color of Money: Black Banks and the Racial Wealth Gap, examines the persistence of the racial wealth gap by focusing on black banks — while challenging the assertion that black communities could ever accumulate wealth without powerful interventions in government policies promoting jobs, homeownership, education, access to capital and other reparations.

A legacy of financial ruin
The sorry saga of black banks in America begins with the Freedman’s Bureau, created by President Abraham Lincoln after the Civil War as a way to help freed slaves transition to capitalism. Unfortunately, all of the components that were supposed to make the transition easier for freed slaves were vetoed by President Andrew Johnson after Lincoln was assassinated, making the Freedman’s Bureau a “glorified piggybank” (in Baradaran’s words) because it lacked the ability to give customers loans to acquire land and make other investments.

The Freedman’s Bank opened 35 branches and accumulated $75 million from 80,000 depositors (about $1.5 billion today). But the bank’s president, a white businessman and politician Henry D. Cooke, invested the money into the railroad speculative market. The market imploded, leaving the freed slaves with only half of their deposits. Though unknown to many white Americans, the bank’s failure continued to have reverberations on the families of the freed slaves for generations to come.

W.E.B. Dubois, an African American sociologist, historian and civil rights activist opined: “Not even 10 additional years of slavery could have done so much to the throttle the thrift of the freedmen as the mismanagement and bankruptcy of the [Freedman’s bank].” Baradaran said the collapse created long-term distrust in banking institutions among African Americans, noting that 60 percent of blacks in the south don’t have a bank account to this day.

New Deal was a bad deal for blacks
During the Great Migration of blacks from the south to the north between 1916 and 1970, African Americans experienced discrimination, poor working conditions and limited access to capital. But the worst was still to come, Baradaran said. Though often held up as a model of “progressive” values, she pointed out that President Franklin D. Roosevelt’s New Deal “made segregation explicit.” The package guaranteed home mortgage loans by the government, removing the banks’ risks in the event that their customers were unable to meet their loan obligations.

“Billions of dollars of private capital come in, banks form across the country to peddle these mortgages and the American suburb is created,” Baradaran said.

The banks made maps tracking where they’d give loans and where they wouldn’t. Baradaran pointed out that the banks singled out low-income and minority neighborhoods.

“Any neighborhood that was deemed ‘racially inharmonious’ – meaning not 100 percent white – was designated a red zone or a yellow zone if it was racially mixed. Any neighborhood that was ‘harmonious” – or white – was designated green. That’s how the lily-white suburb was created,” she said. She pointed out that the GI bill which gave veterans student loans and consumer credit markets operated with similar racially motivated constraints.

Later, Baradaran said these New Deal policies was responsible for the ‘red-lining’ that created communities with significant concentrations of poverty.

“It wasn’t capitalism that created the ghetto, it was New Deal-era subsidies that created those red-line spaces,” she said.

The Civil Rights era and aftermath
With the system so obviously rigged against African Americans, Martin Luther King Jr. instructed the civil rights movement to build their own credit unions and form community banks to boycott financial institutions. “It was really a movement centered on financial exploitation,” Baradaran explained. “If you read or listen to the ‘I Have a Dream’ speech from the lens of economics or banking, you really see a demand for economic justice.

Unfortunately, after making some gains in the early 60s, the civil rights movement suffered a huge backlash by 1966. Indeed, by 1969, MLK, Malcolm X and Robert Kennedy had all been assassinated and LBJ was out of office.

“There was consensus among the black community the civil rights movement either failed or was halted in its tracks,” she said. “All that the civil rights and the voting rights laws did – and I don’t want to undercut them because they were hard to get passed – was just guarantee the rights that were already ensured in the 13th, 14th and 15th amendments [of the constitution]. These were not new rights; these were just the federal government saying, ‘OK, we’re serious this time.’”

Though the concept of reparations for African Americans is considered a “radical” policy proposal by today’s standards, Baradaran points out that President Richard M. Nixon considered such a proposal including one that resembled a “world bank” to build capital in areas with high concentrations of poverty. Ultimately, none of the proposals flew. “[Nixon] was sort of explicitly driven to office by the white backlash… He sort of co-opts the language of the Black Panther movement and says, ‘yes, we want black power.’ What that means is black ownership, black pride, black jobs, black opportunity.” He encouraged constituents to “move past the old civil rights… and to move toward freedom and dignity.”

Though Nixon opposed reparations and did not do much to advance integration, he promoted an “affirmative-action” infrastructure and encouraged corporations to hire more black workers. Though Baradaran said affirmative action was “a good thing,” that led to some black workers gaining financial advancement, she said it was the very least that the administration could have done at the time and characterizes Nixon’s civil rights record as weak.

Fast-forwarding to the 1980s, Baradaran said that President Ronald Reagan’s civil rights agenda essentially amounted to tax cuts.

“His message is that in order to advance civil rights, we need free markets,” she said.

President Bill Clinton essentially doubled down on those policies by recharacterizing “black capitalism” as “community empowerment” and called to reinvent ghettos as “investment zones.” This effort fueled the subprime market and the black community lost 53 percent of its wealth during the Great Recession of 2009. The government’s stimulus package to relieve the recession essentially created more tax cuts for large investment banks to build profitable ventures in the inner cities.

How that’s playing out is painfully evident now in neighborhoods like RiNo (formerly Five Points) in Denver. Once a cultural epicenter of the black community residents are being displaced from the neighborhood because of higher rents associated with economic development.

Wrapping up the presentation, Baradaran encouraged participants to quit repeating the past mistakes that have only widened the wealth equity gaps.

“We have to shed these destructive myths that capitalism will fix what public policy created,” she in closing. “We cannot deflect responsibility of economic inequality onto these communities alone.”

Ending the presentation on a hopeful note, she again quoted Dubois: “The problem with American Democracy is that had not yet been tried.”

“Perhaps it’s time we try,” she said, in summary.

-By Bob Mook

Recent articles

CCLP’s 2024 legislative wrap-up, part 2

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs. Part 2/2.

CCLP’s 2024 legislative wrap-up, part 1

CCLP's 2024 legislative wrap-up focused on expanding access to justice, removing administrative burden, supporting progressive tax and wage policies, preserving affordable communities, and reducing health care costs.


To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.


Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.


Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.


Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.