The History of Racial Economic Inequality: Part 2, The New Deal & The American Dream

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Along with the FHA, the GI Bill invested $95 billion into expanding opportunity for soldiers returning from World War II. Veterans were provided college or vocational education, unemployment compensation and loans to buy homes and start businesses.  While thousands of black veterans valiantly fought and died for this country, the GI Bill was applied discriminately denying them access to these housing and business loans. In New York and northern New Jersey, for example, fewer than 100 of the 67,000 mortgages insured by the G.I. Bill supported home purchases by nonwhites.

By the 1960’s, the Civil Rights movement challenged the discriminatory application of many of these policies and made advances towards achieving the American Dream a reality for more people of color.  But, for many blacks the change came too late. The racial economic inequities became generational to the extent that black middle class families struggled (and continue to struggle) to keep pace with white families.

While the civil rights era pushed blacks closer to the American Dream, a new era – the Regan Era – was on the horizon, and with it came  massive cuts to social programs that would defer the American Dream for many blacks yet again.

The American Dream is based on the ideals that by exercising hard work and personal responsibility, anyone can achieve economic prosperity. However, there is little acknowledgement that this term was coined during the 1930’s when (predominately white) Americans were benefiting tremendously from governments investments.  Too often, African Americans economic conditions are blamed on personal and moral failures and their inability to pull themselves up by their own bootstraps. But, as history shows, African Americans (then and now) do not lack the work ethic. Instead, opportunities to achieve the American Dream were not (and still are not) equally accessible. As we embark down the road to economic recovery from this most recent crisis, let us not repeat history, and leave African Americans and underserved groups behind.

(Photo: Library of Congress 1938)

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