Politics

How The New Deal Created The Ghetto

Matt K. Lewis Senior Contributor

A recurring theme on this blog has been that big government creates problems that often necessitate even bigger government to solve.

(A quick example: Wage and price controls — coupled with favorable tax treatment for businesses to provide health insurance — linked health care with employment, a distortion that resulted in the skyrocketing the cost of health care. Eventually, this government-created problem had to be fixed, by — you guessed it! — more government.)

In the wake of the Baltimore riots, it is appropriate to consider government’s role in creating a tinderbox that perpetuates poverty and a cycle of abuse. Not only was Jim Crow state-sponsored segregation, but — 50 years after the repeal of those horrific laws — ghettos that were specifically and intentionally created by government are still trapping Americans and destroying lives.

A few weeks ago, I wrote about how “progressive reformers” were to blame for Baltimore. And, more recently, Richard Rothstein, a research associate at the Economic Policy Institute, was on NPR’s Fresh Air to further explain how “explicit, racially purposeful” policies contributed.

Here’s an excerpt:

[T]he Federal Government, under the Public Works Administration of the New Deal, had an explicit segregation policy. Its policy was that public housing could be used only to house people of the same race as the neighborhood in which it was located, but, in fact, most of the public housing that was built in the early years was built in integrated neighborhoods, which they razed and then built segregated public housing in those neighborhoods. So public housing created racial segregation where none existed before. That was one of the chief policies.

Listen to the whole thing here.