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The Color of Money: Black Banks and the Racial Wealth Gap
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The Color of Money: Black Banks and the Racial Wealth Gap

4.64  ·  Rating details ·  203 ratings  ·  45 reviews
When the Emancipation Proclamation was signed in 1863, the black community owned less than one percent of the United States' total wealth. More than 150 years later, that number has barely budged. The Color of Money pursues the persistence of this racial wealth gap by focusing on the generators of wealth in the black community: black banks. Studying these institutions over ...more
Hardcover, 371 pages
Published September 14th 2017 by Belknap Press: An Imprint of Harvard University Press
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4.64  · 
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 ·  203 ratings  ·  45 reviews

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Aug 28, 2017 rated it it was amazing
"to be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships."
- W.E.B. DuBois


Every few years there is a book that is so powerful it turns me into a book nerd, policy evangelical. I go out and buy several copies and press them into friends hands with the fervor of a recent convert and tell them they "NEED" to read it. I think the last nonfiction book to do this for me was Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Rig
Feb 19, 2019 rated it it was amazing
I mean, don't act surprised cause I wrote it!
Lisa Butterworth
Mar 02, 2018 rated it it was amazing
It's all unfair, I know that, you know that, but this book lays out all the hidden and complicated ways that money flows to white folks and away from black folks. They can work harder and smarter and never have a chance because the system disadvantages them at every turn, this book spells out those disadvantages in agonizing and depressing detail. Everyone needs to read this book. Especially free market libertarians ugh.

Favorite quote:
In speaking about the collapse of subprime loans, "This Mar
This is an excellent history of Black banking and economics in the USA. Showing that whilst African Americans have constantly sought control of their own economic independence since emancipation, the establishment has purposely kept Black communities and entrepreneurs out of the wider economy.

Whilst the author does not provide a specific solution, she highlights a pattern that despite everything, Black banking has over the past decades always managed to re-establish itself. And this might sugge
Alicia (PrettyBrownEyeReader)
Nov 03, 2017 rated it it was amazing
Shelves: 2017
The author explains the American banking system while walking the reader through Black American history in relation to wealth building. Since Emancipation, Black banking has been the hope of Black America for wealth creation but the banking system of yesteryear and currently will not produce the wealth it does for non Blacks. The author explains in terms everyone can understand why this will not happen and American Black wealth is essentially the same as it was at the time of Emancipation.
Jan 14, 2018 rated it it was amazing
A fascinating and fast-paced history of banking, with a focus on more than 150 years of targeted *economic* discrimination against black Americans. I was shocked to learn some of the on-the-record statements made by blatantly racist politicians – including many who have occupied the Oval Office.

The author explains the incredible power of banking’s money multiplier effect, and how this power could not be realized in ghetto “savings & thrift” banks that were not also lending to their local cu
Eric Bybee
Mar 26, 2018 rated it it was amazing
This book is a stunning achievement and sets a new bar for historical narratives of racial inequality in the United States. Perhaps no other metric captures the collective impact of centuries of anti-Black prejudice and discrimination across various domains of social life (including housing, education, and voting--to name a few) like the racial wealth gap. Accordingly, it should not be surprising that this metric frequently emerges in the everywhere from the writings of Ta Nehisi Coates to the p ...more
Jan 20, 2018 rated it really liked it
Very good. If you're like me, you’ve probably read a number of books on the African-American experience spanning the gamut, from historical to present day perspectives. Here's another for your bookshelf from a economic standpoint, covering: black banking, corporate & government malfeasance, and their persistent adherence to a financial policy intended to keep black communities in a state of financial disrepair.

Professor Baradaran ranges from the beginning when “...the currency of the South w
Audacia Ray
Jan 05, 2018 rated it it was amazing
This book is a serious achievement - a history of black banking and the role of racism in banking institutions in the US, with lots of examples of policies and businesses initiatives and the harm they’ve wrought on black communities. In particular, the author documents the wily ways of racism and capitalism, and how they adapt to appropriate movements. I was especially interested in the sections about Nixon and how he appropriated the messaging of black power and packaged it into black capitalis ...more
Oct 01, 2018 rated it it was amazing
Excellent read. This book was not so much about the black banking industry itself as it was about the history of racial and economic discrimination against blacks in the U.S. through government policies that benefited whites at the expense of blacks and created the deep racial wealth gap of the present day. Still, all information was relevant and necessary to the discussion, and the research was very thoroughly cited. Dr. Martin Luther King, Jr., as quoted in the book, said it best, "the insepar ...more
Mar 08, 2018 rated it really liked it
If you’re a history, banking or economist nerd then this book is for you. I tend to fall into the first category, as my how banking works and economy knowledge is pretty much zilch. That being said I found the history angle tough because the subject is so frustrating, but informative and well researched. The author knows her stuff.
Nov 06, 2017 rated it it was amazing
Dr. Baradaran's work and voice is at once eye-opening, sobering, and infuriating. Her voice is as one with an insider's perspective to the history and nuanced relationship of the Black community to this Nation's consistent and deliberate abuse.
Fraser Kinnear
A lot of this book is 20th century civil rights history. Very valuable context if you haven't read it anywhere else, but ends up being a mile wide and an inch deep if you haven't. The more one reads about the history of blacks in America, the more examples one finds of how thoroughly the odds have been stacked against him.

Where Baradaran does go deep is the particulars of how the structure of our economy disadvantaged poor black communities. Part of this Baradaran diagnoses as being by design, w
Andrew Fairweather
“the Emancipation Proclamation freed the slave, a legal entity, but it failed to free the Negro, a person.” —MLK

A fantastic book!

Come for the analysis of black disparity in America, stay for the striking analysis of how the doctrine of bootstraps laissez faire has been used to deny people in need (blacks, primarily) access to capital—during reconstruction this was denied while simultaneously distributing land and capital for railroad construction. During the depression this was denied while simu
“The Color of Money” is a crucial read for every American. Firstly, it explains the massive inequalities among the races and gives an answer to “why?” rather than simply stating the data. Banking, like in the broader world of capitalism, has a lot to account for in these inequalities, but Baradaran does not stick to that history. She also discusses housing—redlining, segregation, and the like—at length, and the reason that housing is tremendously important to the black inequalities of today.

Dec 18, 2017 rated it it was amazing
Shelves: own
This book is particularly relevant right now on the eve of the potentially disastrous Tax Reform Bill as it dismantles not only the myths used to explain the racial wealth gap but also the fallacy of trickle down economics. Tax cuts of the past have consistently undermined black economic autonomy and this current crop of cuts will potentially undermine the entire middle class. It seems inevitable that having pillaged the black community for centuries and bled it dry, the wealthy elite who have t ...more
David Dayen
Oct 02, 2017 rated it really liked it
Excellent history of an unheralded subject - the history of black banking, and the use of black capitalism as a tool for political leaders to deflect the crisis in the black community and appeal to entrepreneurship as salvation. This has failed to reverse centuries of inequality and oppression because it cannot compete with laws and structures that subjugate. Also a nice introduction into the facts and hazards of commercial banking itself, and how money has been traditionally made in America.
Nov 12, 2017 rated it liked it
The story of how Blank banks fail as a catalyst for wealth generation is powerful. However, it gets lost in the middle of too much historical context. Contextualizing the banking in the ideologies of prominent Black leaders like DuBois and Washington makes sense. But, I think it was over done. I read more about the context, that could be found in other lit, than I did about the author’s actual findings, theory and analysis. It’s still worth a read. But, I was disappointed.
Dec 31, 2017 rated it really liked it
Very good book that tackles a very serious economic problem in America. It provides historical perspective as well as a description of how banking 'works' in America.
Brian Tabatabai
Feb 12, 2019 rated it it was amazing  ·  review of another edition

One cannot read Mehrsa Baradaran’s examination of Black Banks and the Racial Wealth Gap without feeling rage or guilt. As an American Citizen, whose American Citizen grandmother was depatriated during the Depression (1.2 Mexican and Mexican American Citizens were deported), and whose family felt the devastating reality of redlining in Los Angeles during the 50’s, this book unearthed a deep pain in me.

The devastation of segregation, the internalization of failure and poverty without
Jan 27, 2019 rated it it was amazing  ·  review of another edition
If you really want to understand the financial state of black America, and the degree to which it is the result of deliberate policy choices rather than “culture”, this book is a must-read.

The book doesn’t just give the reader a history of key financial engineering innovations (mortgage-backed securities and collateralized debt obligations), but the role of government in enabling the damage they did to black wealth in 2008. Also woven into this well-researched, well-footnoted book are examples
Rob Anderson
Apr 16, 2018 rated it it was amazing
I am tempted to call this a “must read,” because I’d guess 90 percent of Americans know next to nothing about the history it describes in painstakingly researched detail. It’s amazing just how many of the problems and challenges the book describes are still relevant (and ongoing) today and, in some cases, may be as bad as they’ve ever been.

It’s sad to see how racism’s influence has so powerfully corrupted free market ideals and cheated so many generations out of a chance to truly achieve the “A
Tereia Joe
Dec 10, 2018 rated it really liked it
This book though eye opening was a bit to much to take all in and handle. Although I learned many things, the structure of the way the information was presented was a challenge to follow. We first was in this era and then we were in another by a quote from someone late. I got the meaning of it all but this could drive a reader mad. Nevertheless I don't regret reading this book. I like to listen to words like exclusionary and inferiority. Also there were so many acronyms it was interesting to say ...more
Jun 18, 2018 rated it it was amazing
This powerful book begins and ends well. The middle sections, while perhaps necessary for historical weight, became a bit tedious with their details. The stories about the Freedman's Bank and the treatment of other Black Banks pre-FDIC are powerful, as are the stories of the Great Recession financial troubles. Baradaran is at her best toward the end of the book when she tackles the persistent myths about the racial wealth gap and how structural racism is key to understanding and fighting it. She ...more
Dec 08, 2017 rated it it was amazing
This is one of those Required Readings for All Americans. "When the Emancipation Proclamation was signed in 1863, the black community owned less than one percent of the United States' total wealth. More than 150 years later, that number has barely budged." Don't believe it? In meticulously researched and elegantly crafted chapters such as Forty Acres or a Savings Bank and The Decoy of Black Capitalism, UGA Law Professor Mehrsa Baradaran lays out the excruciating truths of systematic government a ...more
Aaron Urbanski
Apr 18, 2018 rated it it was amazing
The promise of American citizenship is the opportunity to participate in capitalism. Mehrsa Baradaran, in this carefully-constructed scholarship, demonstrates that the wealth of black American citizens cannot be obtained through natural economic forces when the policies and traditions driving those forces are fueled by hate and fear. Or, as Baradaran puts it, abolishing racist laws is not the same as achieving equality. This book, then, is a fiery thesis opposing the lie that, after emancipation ...more
Jan 27, 2018 rated it it was amazing
Shelves: bookshelf
This book spoke to me and informed me. I love that the book has a wealth of well researched information that is not dense. The history spans from the late 1800s to the present. I learned about Maggie Walker, who was the first black bank president and is someone I will learn more about. There is a empathy the author employs to further tell the strife. She also highlights the triumphs in Black banking and how black people can move forward.
Brian Elswick
Aug 26, 2018 rated it it was amazing
One of the better books I have read, I will be purchasing this one for my bookshelf. This book puts our present inequalities within the context of their historical underpinnings. Lots of information that was new to me while also linking to some of the other more well known historical facts (ie: The New Deal as white welfare). Would pair well with The Color of Law and When Affirmative Action was White.
Sanjiv Sarwate
Jan 13, 2019 rated it it was amazing
A well-researched examination of the history and limitations of black banking. Some of the history of housing segregation and the impact this had on African-American wealth was familiar (recommend Beryl Satter’s “Family Properties” on this), but this was an interesting look at the lender side of the home purchase transaction.
Erica McGillivray
Highly recommended read for a full complex picture of the racial wealth gap of black Americans. Racism is certainly the culprit. But it's important to know what works and what doesn't to shape our future. I agree with the author's conclusion that destroying wealth gaps will lead to a better country.
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Mehrsa Baradaran is a law professor specializing in banking law at the University of Georgia. Her book How the Other Half Banks has received national and international media coverage.
“Even with the bundling and splitting of tranches, Wall Street needed more mortgage borrowers, so it created the subprime market. These were loans to borrowers who did not meet the underwriting standards set forth by the GSEs, or “prime” loans. Subprime borrowers were riskier borrowers, either because they had fewer assets, lower credit score, or lower incomes. But in finance, higher risk is rewarded with higher yield, so mortgage brokers made even higher premiums from subprime loans.” 0 likes
“We might want to apply the following short litmus tests to any policy proposal: does the program require some collective sacrifice or does it place the burden of closing the wealth gap entirely on the black community? If the latter, this is a cop-out that refuses to acknowledge that the black community did not create the problem in the first place.” 0 likes
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