Summary: Chapters 3–4

Chapter 3

Public state universities that were low in cost were considered part of the American Dream in the 19th and 20th centuries, McGhee writes. The state governments paid for most of them, and the modest tuition bill could be subsidized with a Pell Grant for those who still couldn’t afford it. McGhee says this was true as long as most college students were white. However, once more POC started attending college, states started to cut their spending on universities. Now, instead of Pell Grants, which don’t need to be paid back, the government is providing more student loans. This impacts Black students more because their families are less likely to have savings, the author notes, but it impacts everyone. Student loans make it impossible for many to buy a home. “How is it fair . . . [or] smart, to price a degree out of reach of the working class?” More POC support the idea of free college than white people, McGhee says, and older white Republicans support it the least.

In California, college used to be free. However, when government wanted to limit property taxes, it had to charge a lot for colleges. The dog whistle used there was not wanting to pay for college for “other people’s children,” McGhee says, which in California often meant immigrants from Mexico.

While states have been reluctant to spend on education, McGhee notes they’ve raised their spending on prisons and the war on drugs. Black people are more likely to be incarcerated for a drug crime, even though Black and white people use drugs equally. However, recently, more white people are being arrested for possession as white counties have gotten tougher on crime.

Another vexing issue is health care, McGhee writes. Although Medicare is successful, she argues, we can’t seem to fix it for others, even though most people polled say they agree with the provisions of the Affordable Care Act. It is just like the swimming pool, McGhee says: people don’t want it if everyone can be in it.

Florida senator Claude Pepper (1900–1989) was a national champion for health care and hated by the American Medical Association (AMA), who worried that government insurance might threaten its profitability. The medical establishment labeled it “socialist.” People who ran against Pepper used pictures of him with Black people in their campaign ads. He lost, and Harry Truman (1884–1972) found it impossible to get Southerners behind his health care plan, even though national health care would have overwhelmingly benefitted white people. It failed.

Unions campaigned for health care benefits for their members, and President Johnson created Medicare for the elderly (who were whiter than the overall population) and Medicaid for low-income people. But few were covered by Medicaid, McGhee notes. Eventually, Obamacare passed, but it was deeply unpopular with white voters, largely because it was championed by Obama.

Rural hospitals are closing, making it hard for people there to get health care. Medicaid would help, but McGhee writes that even states that are suffering from lack of health care, such as Texas, refuse to expand it. In Texas, if you make 4,000 dollars a year, you are too rich to be on Medicaid. There are no adult men on Medicaid in Texas and no nonpregnant women. Since people can’t pay their hospital bills, hospitals end up not getting paid.

McGhee argues the states could expand Medicaid to cover more people, with the money coming from the federal government, and states like Arkansas have seen amazing improvements. But, she says, most states don’t want to do it because support for expanded Medicaid is higher among POC than white people. Therefore, as Ginny Goldman, a community organizer in Texas, says, “There’s . . . a tiny sliver of a minority of people who will outdo you” and make all the efforts to vote for naught. That tiny sliver is white people because, even though Texas is a majority-POC state, two-thirds of its legislature is white and three-quarters are male. Because of their stubbornness, McGhee says, one out of five non-elderly Texans lacks health insurance, and that includes over a million white, non-Hispanic Texans. There is a stigma attached to needing Medicare, and even Latino communities don’t want it. McGhee notes “That’s a late-stage benefit of a forty-year campaign to . . . degrade public benefits.”

Ginny shared an anecdote of an African American man who died of a treatable disease, lupus: “People are dying because they . . . [chose] a political victory over an actual victory . . . [for] millions of people.”

Another community leader, Ron Pollack (born 1944), shared the anecdote of a white man named John whose wife died of cancer because she didn’t see a doctor until it was too late. When she was dying in the hospital, she encouraged John to advocate for universal health care: “The last favor I have of you is . . . [to] join that bus trip. Tell my story.” Ron has been fighting for Democratic causes since the 1960s, when his City University of New York classmate Andrew Goodman (1943–1964) was killed during Freedom Summer. He has a vision for America where nobody is deprived of the necessities of life. He said, “I wish there was a greater consciousness of how we’re all in this together” without divisions based on race. Talking to Ron, the author saw what she calls “Solidarity Dividends, waiting to be unlocked” if people understood that working together would help.

People have tried to address all these issues without addressing race. However, the author has found that, if you try to convince most liberals about that without addressing race, they may agree at first, but then, they’ll be swayed by racial scapegoating. However, it can be addressed successfully. A grassroots organization in Minnesota did so using a “greater than fear” campaign in the 2018 election. It emphasized solidarity in its ads, including a multiracial cast doing things all Minnesotans related to, such as potluck dinners and digging cars out of the snow. It emphasized things Minnesotans could get if they worked together, such as expanded health care and lower college tuition. The campaign was successful.

Chapter 4

Janice and Isaiah Tomlin, who are Black, made payments on their home for over 20 years and had good credit. When they wanted to use the equity in their home to send their children to parochial school, Chase Mortgage Brokers gave them a subprime mortgage at a high interest rate, for people with bad credit. Predatory mortgage brokers got bonuses for getting people to take these subprime loans. These loans stripped homeowners like the Tomlins of their equity by charging many fees that came from the equity.

Later, when the Tomlins became suspicious of the mortgage company, they showed the paperwork to a lawyer friend, Mal Maynard. He was outraged by the equity stripping. He found that many Black homeowners had a similarly bad deal, so he filed a class action lawsuit, naming Janice and Isaiah as the plaintiffs. Janice said she knew the defense lawyers would mock her ignorance, “But I knew that, in the end, there would be others who would benefit from it.” She helped save 1,300 people’s homes.

The author recalled when she spoke to Congress, while still at Demos. They had a report about bad mortgages that stripped equity from Black homeowners, but a Democratic senate staffer told them that the banks “owned the place.” The Republicans didn’t want to regulate the banks. She had seen many people who lost homes to these subprime mortgages, which is why she found their stories inspiring. The Black people who got these subprime mortgages were “canaries in the coal mine,” a warning to other people of what was happening. But they were ignored.

Many homeowners of all races lost their homes in the financial crisis of 2008 and the Great Recession that followed it. Homeownership rates went down, and millennials still have 34 percent less wealth than their parents. There were many other financial ramifications of the crisis, and it has affected health, education, and fertility.

Amy Rogers, a white woman, also lost her home due to predatory second mortgage practices. She says, “Do not say, ‘I lost my house.’ You didn’t lose [it]. It was taken away from you.” Lenders were able to do this because they’d been preying on Black homeowners for years prior.

Black people didn’t benefit from many of the programs that helped others, such as the New Deal of the 1930s, McGhee writes. During that time, the government bought mortgages that were in foreclosure and helped people refinance. But they wouldn’t buy mortgages in Black areas, which were considered a riskier investment. The Federal Housing Administration (FHA) redlined these neighborhoods on maps. It would only give mortgages to developers if they restricted ownership to white people. Almost a century later, the typical white family has more wealth because they were able to buy a home and pass that wealth to their children.

Fringe mortgage companies flourished. But they gave bad mortgages that made it easy to lose one’s house simply for missing a single payment. Laws have changed gradually, and some states are laxer than others. That’s why many credit card companies are in Delaware and South Dakota. In the 1990s, Congress repealed Glass-Steagall, a law that protected consumers from risky investments. This let the financial sector run wild. It especially preyed on African Americans, who were given new subprime loans. Several Wells Fargo employees testified in fair lending lawsuits, stating that they were encouraged to give bad loans to African Americans, even if they could have qualified for better loans.

“A common misconception . . . is that subprime loans were [given to] . . . borrowers with bad credit . . . to offset . . . risk,” McGhee writes. This wasn’t always true, she says. While it may be tempting to blame greed, rather than racism, “history might counter: What is racism without greed?” People feel better taking advantage of people with whom they don’t empathize. Lisa Donner, executive director of Americans for Financial Reform, says that regulators didn’t see the problem because it wasn’t their neighborhoods or people they knew. She says that “Race was a part of weaponizing the ‘It’s the borrower’s fault’ language” where people assumed that the borrowers were a poor risk or took on loans they couldn’t afford. Republicans were so successful at blaming the borrowers, McGhee says, that the Obama administration was unable to do much to save Black wealth.

In the early 2000s, predatory mortgage companies sold mortgages they knew would fail, as an investment. Again, they tested these mortgages out on borrowers of color, giving them adjustable-rate mortgages where they didn’t build much, if any, equity. Black people served as the canary in the coal mine, and when everyone ignored what happened to them, the predatory loans got more widespread.

The author tells the story of Susan Parrish, another white woman who lost her home. The author says, “all of [the financial abuses that caused downward mobility] was preventable, if only we had paid attention . . . to [the problems in] Black and brown communities.” The financial crisis hurt POC first and worst, but the majority of people it hurt were white.

Back with the Tomlins, Janice said that the judge asked her why she was willing to be the named plaintiff in her class action. She said she told the judge that she taught her students to say the Pledge of Allegiance, so she felt like she needed to have faith in her country to do what was right. Janice echoes her father, saying, “Put a little good in the hole.” The suit got North Carolina borrowers a settlement for 10 million dollars.

Analysis: Chapters 3–4

In these chapters, the author introduces the phrase “solidarity dividend,” which will become a main idea of the book. What she means is that we lose by seeing the government as a zero-sum game, where someone has to lose in order for someone else to win.

Since many people don’t realize that, by standing together, we can reap benefits, we all lose. She speaks of the “Greater Than Fear” campaign run in Minnesota, which emphasized how all Minnesotans could win if they worked together in solidarity.

The Tomlins show another example of a solidarity dividend. Janice is seemingly not a public person and wouldn’t normally be the named plaintiff in a class action lawsuit, one in which she is going to be required to testify on behalf of many other unnamed members of her class. However, she states that she believes in the United States, as evidenced by the Pledge of Allegiance, and she thinks that means she should have faith in her country to do the right thing—and that she should do the right thing for others.

The phrase “canary in the coal mine,” the title of Chapter 4, comes from the old days of mining. The miners took a canary into the mine to test for the presence of toxic gases that might kill the miners. If the canary died, the men knew that they shouldn’t go inside. Here, a canary serves as a metaphor for Black people. The canary was viewed as expendable, at least more expendable than the miners. That’s why it was used as an early warning sign. However, if the miners ignored the canary, they would enter the mine at their peril and all die. Similarly, many cases of financial abuse, such as predatory mortgages, are first given only to Black people. When they get upset about it, white people and white politicians ignore them, assuming it’s only a problem for Black people or that Black people are somehow undeserving. However, once politicians ignore this “canary,” it emboldens the abusive companies to believe they can continue their unfair practices on others.