Think from KERA Why we haven’t fixed the racial wealth gap
Feb 6, 2026
Mehrsa Baradaran, law professor and author who studies banking and racial economic inequality, offers a historical tour of policies that shaped today’s racial wealth gap. She explores redlining, failed Black financial institutions, shifts from anti-poverty to punitive policy, and debates over reparations and credit reforms. The conversation traces how law and politics kept disparities intact.
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White Flight, Violence, And Redlining
- As Northern cities gained Black professionals, violence and white flight often followed and property values fell.
- Federal New Deal lending policies then redlined mixed neighborhoods, freezing those declines into long-term poverty pockets.
Freedmen's Bank Failure And Lost Trust
- Freedmen's Savings was intended as a federal-backed safe place but acted like a piggy bank that didn't lend.
- The white manager speculated and lost deposits, and the government refused to restore savings, shattering trust in banks for generations.
Mutual Aid And The Limits Of Economic Power
- Black mutual aid and black-owned banks arose because mainstream banks excluded Black people from services.
- Baradaran notes economic power without political power proved vulnerable to violence and law that stripped property rights.
