What the Legacy of Slavery Teaches Us About the Importance of Homeownership

The literary historian Henry Louis Gates, Jr. recently wrote an Op-Ed in the New York Times in which he reported on some startling findings he believes could explain the current wealth gap among African Americans. In studying the ancestral backgrounds of 20 of the most successful African Americans in America, he found that the majority—15 out of 20—come from lineages of former slaves who were able to secure property by 1920. Gates goes on to argue:

“The historical basis for the gap between the black middle class and underclass shows that ending discrimination, by itself, would not eradicate black poverty and dysfunction. We also need intervention to promulgate a middle-class ethic of success among the poor, while expanding opportunities for economic betterment…for the black poor, real progress may come only once they have an ownership stake in American society.”

That owning a house (or property) creates economic stability and promotes social cohesion should not come as a surprise.  As Gates points out, wealth is more important than income in determining prosperity.  As an extension, it should not be shocking that the subprime crisis, which is disproportionately affecting African American and Latino homeowners, is threatening the social fabric of entire communities by stripping families of their equity. As Gates succinctly puts it, “People who own property feel a sense of ownership in their future and their society. They study, save, work, strive and vote. And people trapped in a culture of tenancy do not.” This alone should be the greatest argument for our policymakers to move aggressively in remedying the fallout from the crisis.

-Amanda Levinson | Director of Policy Programs

Healthcare’s Glass Ceiling

Talk about a human interest angle!  In “It’s Not Just the Uninsured,” (NY Times, 11/17/07), Bob Herbert cuts to the quick in the health insurance debate by focusing on the really important question: what about annual benefit limits?

In his article, he discusses the story of the Hightowers, who discover when trying to save their daughter from a particularly pernicious cancer bout, that their annual maximum benefit on a $3 million policy was only $75,000 per year.  So, in trying to treat the cancer, the family reached their annual max and were forced to take on incredible debt.

With every Democratic candidate pointing to their health care plan as the very best the nation has seen, it is surprising that none have really addressed this issue.  This past week, in Austin, the Travis County Health Care District was discussing an effort to provide a Small Business Owner Health Insurance Risk Pool, with a $200,000 annual maximum per employee.  Everyone sitting round the (very large) table seemed to think this was a reasonable cap, but now that I give it some real thought I must admit that I have no idea what is a reasonable annual max.  I suppose that answer would be different for a single male in his 20s, a 35 year old woman considering in vitro fertilization, or a retiree with diabetes and a weak hip bone.  It seems that any one of these health care consumers could face serious debt with one serious hospitalization because of too low an annual maximum.  At what point does health insurance debt reach the same level of national crisis in the public mind that subprime mortgage bankruptcies now commands?

-Lonny Stern | Communications Director

Time to Focus on Health Care Costs

Access to health care is one of this nation’s greatest and most urgent public policy concerns, and unfortunately skyrocketing costs of care per patient are contributing to the political barriers that could expand coverage.  The growing divide between Democrats and Republicans in promoting access to health care is for the time being focused on the level of government intervention, the role of private providers and the rate of expansion of health insurance.  However, the question of access cannot be seriously addressed without a thorough evaluation of the ballooning cost of health care, which is reducing predictability for businesses who offer coverage to their employees.

It is not surprising that presidential candidates are shying away from directly addressing health care costs, especially given the political repercussions they risk facing by scrutinizing a highly profitable industry that includes pharmaceutical companies among others.  However, this supply-side can still be streamlined by simplifying and increasing transparency of the benefits, formats, standards and screening processes, which should eventually generate large financial savings.  In the meantime though, we cannot continue to spend a disproportionate amount of energy on analyzing who should be providing health care and how without critically evaluating the cost of what is being provided.

-Arian Hassani | Program Associate