Logically, it was an odd thing to say. After all, lots of things worth doing, even political things, won’t “end racism.”
But from a practical point of view, Clinton’s gambit was brilliant politics. It effectively caricaturized Sanders as a one-note candidate too steeped in attacking billionaires to see the problems of people down on Main Street. And the line fit in a tweet, making it perfect for rocketing around the Internet.
Clinton probably also understood that most people don’t draw a connection between Wall Street corruption and race. Although the first victims of the financial crisis tended to be poor, nonwhite and elderly, tales of iniquity in the billionaire class tend instead to resonate with a different audience — specifically, the white liberals and college students who flocked to the Sanders campaign.
There was a political cliché behind this disconnect. When most people hear the words “Wall Street,” they think of the stock market. And since African-American voters have traditionally distrusted and avoided the stock market, at least in comparison to white investors, there is a perception that “Wall Street” is an issue that doesn’t really concern black people.
In the subprime era, though, banks actually used this cliché to their advantage. They profited immensely from a real-estate operation that specifically targeted people who stayed away from the financial markets, and carefully guarded their money by putting it in their homes.
According to one study, about two-thirds of all subprime loans between 2000 and 2007 were made to people who already owned their homes. The targets were often elderly, in particular men and women of color. Visiting loan officers convinced these borrowers to use the homes they’d poured their savings into their whole lives as ATM machines.
The pitch was: refinance your home, and get a little extra spending money each month! Lots of people went for it. But there was mischief hidden in the fine print of many of these “refi” deals, which often quickly exploded. Before long, the now-departed agent’s promises would evaporate into a toxic quicksand of debt, unforeseen penalties and foreclosure.
Like a lot of reporters who covered the crash era, I initially misunderstood the profound racial element in the subprime drama. This wasn’t the S&L crisis or the Enron-era accounting scandals or even the Internet bubble, a speculative craze that devoured the savings of white Middle America.
Subprime was different. It was fueled by a particular kind of predatory lending that targeted a very specific group of people.
In the 2000s, armies of smooth-talking real-estate hustlers from companies like Countrywide and New Century poured into residential areas across the country, but particularly into black neighborhoods. They made wild promises, in many cases offering huge loans in exchange for little or no money down.
Once the agents got signatures on these loans, they quickly sold them up the financial river to Wall Street, where the great banks repackaged them for resale at huge profit to pension funds and other investors. The scheme depended on getting huge numbers of names on new loans.