We speak with Dedrick Muhammad of the Institute for Policy Studies about his latest article with Barbara Ehrenreich called "The Destruction of the Black Middle Class." They write, "For African Americans — and to a large extent, Latinos — the recession is over. It occurred between 2000 and 2007...What’s happening now is a depression." [includes rush transcript]
JUAN GONZALEZ: We expand the discussion to look at how the financial crisis, as a whole, has affected African American communities around this country. We’re joined by Dedrick Muhammad from Washington, DC. He’s the senior organizer and research associate for the Inequality and Common Good Project of the Institute for Policy Studies. His latest article, with Barbara Ehrenreich, published earlier this month in CounterPunch, is called "The Destruction of the Black Middle Class." They write, quote, “For African Americans — and to a large extent, Latinos — the recession is over. It occurred between 2000 and 2007...What’s happening now is a depression.”
Dedrick Muhammad, welcome to Democracy Now!
DEDRICK MUHAMMAD: Thanks for having me.
JUAN GONZALEZ: Talk about the destruction of the black middle class.
DEDRICK MUHAMMAD: Well, as you highlighted, that during — between 2002, 2007, during this time of supposed economic recovery, economic growth, African Americans were losing ground in employment, about a two percent loss in employment, also loss in income.
And I think a great concern is now — and now that we’ve entered into this great recession, what’s going to happen with the supposed recovery that people are looking forward to happen in 2010, 2011? Will it be a recovery for just the financial institutions, which you’ve been talking about, that have profited over the last twenty, thirty years, while the middle class and working class have been struggling? Or will it be — you know, not “or” — and will it be a time where the working and middle classes continue to be left out of accumulating wealth in this country?
So the decline of the middle class is not something, particularly for African Americans, that has just been happening since this recession, but it’s been an ongoing problem which politically there does not seem to be the will to address.
AMY GOODMAN: Dedrick Muhammad, as you listened to Elizabeth Jacobson talking about the targeting of African Americans, your response?
DEDRICK MUHAMMAD: Well, I mean, I think, you know, it’s interesting hearing about this Well Fargo, how all this is coming to light, because I remember in 2004, 2005, I was in San Francisco with ACORN organizers and with people who were protesting the predatory lending that was happening, and it was amazing to hear, you know, even at that time, that Wells Fargo was saying, you know, “We’re not even engaged in predatory lending.” And so, I’m glad this is finally coming out to light.
But the sad part, as your reports have been highlighting, is it seems that the bailouts are going disproportionately to those that are at the root of this economic bubble bursting, and there still does not seem to be a will to address those who have been — those who have been exploited by these companies. And again, the American middle class as a whole has been struggling for the last twenty, thirty years, and, you know, I’m waiting for when we will finally address this issue.
JUAN GONZALEZ: In your report, were you able to quantify the loss of wealth that has occurred among African Americans as a result of the — especially of the housing crisis?
DEDRICK MUHAMMAD: In 2008, I co-wrote a report with United for a Fair Economy called “State of the Dream 2008: Foreclosed.” And at that time, we had estimated that we were looking, for African Americans and Latinos, a loss of $70 to $90 billion. And we were estimating at that time that that could be the greatest loss of wealth for African Americans and Latinos in generations. And so, we haven’t had an update of this, but as the recession has proved even worse than we thought in 2008, I think we’re going to see even higher numbers.
AMY GOODMAN: Dedrick Muhammad, the unemployment figures in Black America?
DEDRICK MUHAMMAD: Yeah, the unemployment, right now, officially is about 15 percent for African Americans. Now, there’s been some interesting work by the Economic Policy Institute that have estimated that by 2010, if you look at African Americans who are unemployed and underemployed — that means those who might also have had to go from a full-time job to a part-time job — that up to 40 percent of African Americans will have experienced underemployment or unemployment by the end of 2010.
And when you have a community such as the African American community, where up to 80 percent of African Americans don’t even have a savings that would last them three months, you can see how devastating this recession and, as we’re calling it, a depression of African Americans and how long-term these effects could be on this community.
JUAN GONZALEZ: And in terms of the government’s attempts to assist average homeowners and working people, what do you think is needed?
DEDRICK MUHAMMAD: Well, what I think is needed is — I mean, you know, we had —- there was about $800 million American Recovery and Reinvestment Act, which has done some good things for middle— and working-class people. But the problem is that the federal government also saw it fit to put $8 trillion behind the financial institutions which were irresponsibly lending out money and then leveraging out those loans. And so, we need a commitment at least as equal to the financial industry that’s been profiting for so many decades as we do to those who have been suffering under, again, much of that exploitation and a trickle-down economics that has really put middle- and working-class people behind the eightball for, again, decades.
AMY GOODMAN: Dedrick Muhammad, we have to leave it there, and we thank you so much for being with us, with the Institute for Policy Studies. We’ll link to you report.