The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together (One World Essentials)

by Heather McGhee

The inadequacy of the tool I was bringing to this question, economic policy research, felt painfully obvious. Contrary to how I was taught to think about economics, everybody wasn’t operating in their own rational economic self-interest. The majority of white Americans had voted for a worldview supported not by a different set of numbers than I had, but by a fundamentally different story about how the economy works; about race and government; about who belongs and who deserves; about how we got here and what the future holds. That story was more powerful than cold economic calculations. And it was exactly what was keeping us from having nice things—to the contrary, it had brought us Donald Trump.

In 1976, state governments provided six out of every ten dollars of the cost of students attending public colleges. The remainder translated into modest tuition bills—just $617 at a four-year college in 1976, and a student could receive a federal Pell Grant for as much as $1,400 against that and living expenses.

The new “debt-for-diploma system,” as my former Demos colleague Tamara Draut called it, has impacted black students most acutely, as generations of racist policies have left our families with less wealth to draw on to pay for college. Eight out of ten black graduates have to borrow, and at higher levels than any other group.

Josh Frost is thirty-nine and works full time at a news station and part time at a gas station. He pays three-quarters of his salary toward his student debt while living with his parents. Though he did everything society told him to do, he’s nearing forty but feels like adulthood is passing him by: “I’m watching everyone I know start families and buy homes,” he said. Emilie Scott from St. Paul, Minnesota, needed to go to college to fulfill her goal of becoming a teacher. She worked four jobs while studying, to keep her borrowing low, but still graduated with $70,000 in private and public student loans. Four years after graduation, making payments of $600 a month, she has paid off $28,000, but because of interest rates close to 10 percent, her remaining balance is $65,000.

“This is madness,” she says. “How can I keep up with this? And for how long?” Unfortunately for Emilie, more than three million senior citizens who still owe $86 billion in student loans can attest that the “madness” doesn’t really end. Seniors with student loans are more likely to report rationing medical care, and the government garnishes Social Security payments for seniors in default.

The saddest, most common refrain in dozens of interviews and testimonials from borrowers is “I wish I had never gone to college.” If growing cynicism about higher education is the result of this sudden and total shift from public to private, then our entire society will bear the cost.

The first mortgages and collateralized debt instruments in the United States weren’t on houses, but on enslaved people, including the debt instruments that led to the speculative bubble in the slave trade of the 1820s. And the biggest bankruptcy in American history, in 2008, was the final chapter of a story that began in 1845 with the brothers Lehman, slave owners who opened a store to supply slave plantations near Montgomery, Alabama. The brothers were Confederate Army volunteers who grew their wealth profiteering during the Civil War, subverting the cotton blockade, buying cotton at a depressed price in the Confederacy and selling it overseas at a premium. They first appeared on what would become Wall Street by commodifying the slave crop, cofounding the New York Cotton Exchange.

In a free fall that began on a weekend in mid-September, Lehman Brothers would go on to lose 93 percent of its stock value. A company born out of a system that treated black people as property died from self-inflicted wounds in the course of destroying the property of black people. Lehman’s fate provides no justice for the enslaved people whose misery the company enabled in the nineteenth century, nor for the dispossessed homeowners ruined by Lehman-owned mortgages in the twenty-first century, but it is a reminder that a society can be run as a zero-sum game for only so long.