The Federal Government and Racism in Housing.

I think one general pattern in the development of government is evolution from the bottom, consolidation from the top.  British history has the problem of over-mighty subjects I think they're called--nobles who have their own entourages wearing their own livery carrying weapons and posing a threat to the monarchy.  Gradually their power is whittled away and the state assumes a monopoly of violence.  In the South especially there's a pattern of private and quasi-public enforcement of laws and mores, which shows most clearly in lynchings and jury nullifications.  That's been changed.  In the North roads were often developed as private enterprises, eventually to be taken over by the state. 

I could go on, but let me get to the subject: the New Deal and the federal housing agencies are commonly blamed for establishing red lines and refusing to finance housing loans in areas of the city.  IMO it's true that's what they did, but it's not true it was dreamed up in the pointy heads of Washington bureaucrats and New Dealers.  I've held that opinion all along, but it doesn't fit with the  way I see the world operating.

Now my opinion, which was based only on feelings and not on facts, is reinforce by a scholarly article in the Journal of American History.  Unfortunately it's paywalled but it includes a discussion of the development of the real estate industry. I'll quote a paragraph:

" Fisher emphasized the importance of NAREB's Code of Ethics, first created in 1913. He summarized the code and the commonsense nature of advising clients and customers on matters of value. However, he failed to mention its soon-to-be-finalized Article 34, which became one of the organization's most controversial statements: “A Realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individuals whose presence will clearly be detrimental to property values in that neighborhood.” Thus racism was already well established in NAREB by the time that Ely and Fisher reached out."

"Ely" is Richard Ely, the founder of the American Economics Association, and Fisher is one of his students who worked for what became the National Association of Real Estate Boards, now the National Association of Realtors.

The article's theme can be summarized here:

?The Federal Home Loan Bank, the Home Owners' Loan Corporation, the Federal Housing Administration, and their restructuring of the real estate sector were outgrowths of the network of academics, private sector professionals, trade organizations, and lobbyists that Ely assembled in the 1920s. "

To paraphrase the now deceased Rumsfeld, "you write the laws with the society you've got".  The New Deal solidified and rationalized racism in housing, racism that pre-existed the New Deal.

Katznelson Is Successful and Wrong (in Part)

Ira Katznelson has succeeded in convincing the conventional wisdom that FDR worked with Southern racists to limit the scope of New Deal legislation so that blacks were not aided.  While that's a smal part of his most recent book, "Fear Itself" , it seems to be the meme which has most resonated with liberals.

Given the scope of the New Deal, you'd have to examine many legislative histories to confirm or dispute the general thesis.  I don't know the truth of others, but I do not believe it is an accurate description of the reasons for circumscribing the coverage of Social Security in the original act.  Katznelson.  I've noted this before in a Post Wonkblog discussion of the book, by point to:

an interesting counterpoint by Larry DeWitt, a public historian with the Social Security Administration. Here's the abstract:

The author concludes that the racial-bias thesis is both conceptually flawed and unsupported by the existing empirical evidence. The exclusion of agricultural and domestic workers from the early program was due to considerations of administrative feasibility involving tax-collection procedures. The author finds no evidence of any other policy motive involving racial bias.

I'd add to DeWitt's work by pointing to the expansion of SS coverage to farmers. (See this IRS publication.)  It's personal to me, because I remember my parents becoming eligible in 1950 (from an SSA history):

The amendments of 1950 brought 9 million workers into covered employment (Christgau 1960), including regularly employed farm and domestic workers and, with some exceptions, self-employed persons. These new workers would generally not have much in the way of covered earnings from 1937 to 1950. Except for those just beginning their careers, newly covered workers would thus receive low retirement benefits. A "new start" formula was instituted that allowed the computation of benefits on the basis of average monthly wages after 1950 (if that yielded higher benefits). Similar to the 1939 amendments, this policy reflected a choice by policymakers to award adequate retirement benefits to persons who may have worked (and paid taxes) in covered employment for only a short period of time.

 I'm reminded of this point because among the family papers I just inherited was correspondence concerning the difficulty of establishing my father's birth date (in 1889) to become eligible for SS. The bottom line was that SSA had become a functioning bureaucracy which was capable of handling the extra covered workers, and IRS was capable of writing IRS pub 51.  And the resistance of the farm lobbies, like the American Farm Bureau, had been overcome.  (See this NYTimes article on the differing attitudes of Farm Bureau and National Grange.) This expansion was passed enough though Southern Democrats retained their power in Congress.

While the evidence is clear to me, I'm not holding my breath as I wait for academic historians to recognize this error.

Defeat for Research and Promotion Plans

One legacy of the New Deal (perhaps even of Herbert Hoover) was the creation of government-sponsored, farmer approved cartels called research and promotion plans.  Basically a referendum of farmers approves a plan to assess a fee on sales to be used by an organization to promote the commodity.  Some raisin producers have taken USDA to court, made it to the Supreme Court, and won--at least that's how I interpret this post at SCOTUS blog.  (In the case of raisins, there's requirements for the handlers to hold reserves, and the issue is whether the people suing were handlers or producers and whether the reserve requirement was a "takings" under the Constitution.

I wonder if athletes will try again to challenge the cartels run by the NCAA and the pro leagues?

Why We Had the Agricultural Adjustment Administration

Via Matt Yglesias, this map at Slate shows how how population changed at the county level during the Depression.  Counties in the wheat area/Great Plains suffered a loss of more than 10 percent during the 10 years, in some cases more than 25 percent. That's not just the children growing up and moving away, that's families moving (i.e., Steinbeck's Joads and the other Okies.).

The distress behind those population changes is why the New Deal passed a bunch of laws relating to agriculture and rural life.


A note: as I blogged yesterday the 1940 census records included a question on where you lived in 1935, so it should be possible to construct a map showing migration during 1930-35, and 1935-40.