Borne amidst the massive expansion of population, home ownership and wealth in the United States post-World War II, the modern conception of the American Dream is a fundamental and powerful aspect of the American ethos. A narrative which consists of anyone achieving success through hard work with few barriers, the American Dream is peddled endlessly by politicians and embedded in American history courses. If you type “American Dream” into Google, you find 46.7 million results with thousands of scholarly and newspaper articles featuring the phrase prominently in the titles of their work. Indeed, it is the ideal for most Americans struggling to achieve better lives, and represents hope for those immigrating to the United States escaping persecution, violence or poverty. However, despite our national affinity with the American Dream, our definition is woefully inadequate. In some ways, it’s false. Its foundation—rooted in New Deal policy and post-World War II America suburbia—is built on exclusion.
After World War II, America’s global preeminence sparked a boom in population and wealth. The American government sponsored a program of single family home ownership in suburban areas, which became synonymous with the American Dream. Intense demand for a white picket fence and green, manicured lawns outside of urban areas fundamentally altered all aspects of American society, such as transportation and utilities infrastructure. Such transformations had their most prominent effects on the politics of race in the United States. In other words, the price of buying a home, raising kids and growing wealth in 1950s America was the systematic exclusion of people of color from the American Dream. Ironically, the policies that supported such systematic racial exclusion are found in the “Golden Age” of “progressive” legislation and the creation of the welfare state—the New Deal.
*According to David Freund, the Great Depression essentially prompted a crisis in the housing market, not dissimilar to the housing market crash of 2008. Thus, the early 1930s was characterized by increasing rates of homelessness, job loss, and bank failures because of defaults on mortgages (loans used to buy houses). Before the 1930s, homes were only an option for the rich, as they required more money to be paid up front, and for mortgages to be paid back in a short amount of time. Both President Hoover and President Roosevelt made rescuing the housing market a top priority, resulting in the creation of the Home Owners Loan Corporation, the Federal Housing Administration, and the Federal National Mortgage Association, among other institutions and policy. To rescue smaller, private banks, the HOLC bought all the default mortgages that banks were holding, causing an influx of cash that private banks could now lend out to prospective home buyers. To make buying homes easier, it made mortgages low-interest, long term (one can pay them back over 30 years instead of 5), and fully amortized (which gradually reduces the debt). Both policies resulted in a massive expansion of credit accessible to American families, which was used to fuel the housing market and economic boom of the 1950s. A modern day, smaller-scale example of credit expansion created in order to drive consumption would be the advent of the credit card, which allows people to buy more goods now and pay for them later.
Built into the procedures of the FHA and HOLC, however, were policies that made mortgages and credit inaccessible to people of color. Through a process called “redlining”, the federal government explicitly refused to give loans to people of color by designating population areas with a large proportion of minorities to be unsafe for lending. White areas typically received the highest marks, and thus the most confidence for lending. This policy destroyed opportunities for investment in black and brown areas of America. While white families after World War II could buy homes, build wealth and pass it on to their children, people of color were forced into public housing and rented-housing, preventing the accumulation of wealth and the basis for upward social mobility. Even today, public housing projects that disadvantage the poor exist. So pervasive was this process of devaluing the property of people of color that whenever a black or brown person moved into a white neighborhood, the fear of their presence actively created a financial risk to white families. This caused white families to migrate even further away from people of color, creating our modern suburbia surrounding urban centers. Clusters of wealthy white families created a strong property tax base which resulted in better public services, such as schools, for white communities—the opposite was true for black and brown communities. Although explicit racial discrimination was removed from federal housing policy in 1968, these malevolent patterns of demographic transition, clustering, and financial organization, are still represented in maps of modern American cities and in the drastic wealth disparities between whites, African-Americans, and Latinos. The negative stereotype of black and brown communities as crime-filled and perpetually impoverished is a result of structures built in the 1930s-1950s. Perhaps most damaging was the federal government’s insistence that these processes of segregation and discrimination were the result of natural free market tendencies, naturalizing oppression and removing any culpability of American institutions for perpetuating racism. We continue to live with the legacy of exclusion.
The American Dream can still be our ideal, but it must be fundamentally reimagined. The history of the New Deal is evidence of the American Dream’s privileging of white populations at the expense of people of color regarding housing, betraying its creed that no barriers exist in the road to prosperity. It has created a society today that still struggles with inequality of opportunity and racial tension. Those responsible for these policies are gone, but Americans today must transcend suspicion and fear of the other to take collective responsibility for the building of a just society. In other words, this means we must open dialogue that deconstructs harmful stereotypes, which only happens when diverse groups of people purposefully connect with one another. Investment in black and brown communities, as well as increased funding to support public education, are also essential. Durham, NC, for example, experiences the debilitating pressures of affordable housing and gentrification, and is actively addressing the racial impacts of both issues to create more equitable housing options for low-income communities of color. Nevertheless, only by fully confronting the role and power of race in America’s history can we solve any of these problems and take meaningful steps to translate the American Dream into an American Reality.
*Arguments paraphrased from David Freund’s book Colored Property, cited here:
Freund, D. M. (2007). Colored property: state policy and white racial politics in suburban America. Chicago: University of Chicago Press.