Reason Podcast

How the Government Created Housing Segregation [Reason Podcast]

Richard Rothstein's The Color of Law documents how federal housing policy forced blacks and whites apart.


"In many cases," says Richard Rothstein, "the federal government did create…segregation in metropolitan areas and in cities that had never known segregation before. In other cases…it did reinforce segregation that was already in existence. But the country was much, much more segregated as a result of these federal policies than it was before, or would be today without them."

Rothstein is a former education reporter at The New York Times, a research associate at the Economic Policy Institute, and a fellow at the NAACP's Legal Defense Fund Thurgood Marshall Institute and University of California at Berkeley's Haas Instititue. He's also the author of The Color of Law, a revisionist history of housing segregation in America that argues that government policy was a major force in creating ghettos and making sure that blacks and whites lived in separate neighborhoods.

On today's episode of the Reason Podcast, Nick Gillespie and Rothstein discuss the role that government intervention played in establishing the patterns of segregated residency that persist to this day and how that squares with the current political climate.

Audio production by Ian Keyser.

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This is a rush transcript—check all quotes against the audio for accuracy.

Nick Gillespie: Hi. I'm Nick Gillespie, and this is the Reason podcast, where we talk about news, politics, culture, and ideas from a cutting-edge libertarian perspective. Please subscribe to us at iTunes, and rate and review us while you're there. Today, I'm talking with Richard Rothstein. He's a research associate at the Economic Policy Institute, and a fellow at the NAACP Legal Defense Funds, Thurgood Marshall Institute, and the University of California Berkeley's Haas Institute. He's also the author of The Color of Law: A revisionist history of housing segregation in America, that argues that government policy was a major force in creating ghettos and making sure that blacks and whites lived in separate neighborhoods. Richard Rothstein, thanks for coming.

Richard Rothstein: Thank you very much.

Nick Gillespie: The first part of your argument is that, and I'm quoting from you, "African-Americans were unconstitutionally denied the means and rights to integration in middle class neighborhoods." That this was in large part due to local, state, and federal policies, that really weren't outlawed or banned in full by the federal government until 1968. Describe some of the early policies coming out of The Depression and World War II that enforced … I mean, they didn't create housing segregation, but they really exacerbated it and made de facto, or I guess de jure segregation, de facto segregation.

Richard Rothstein: Well, yes. In some cases, in many cases actually, the federal government did create it. Created segregation in metropolitan areas and in cities that have never known segregation before. In other cases, as you say, it did reinforce segregation that was already in existence, but the country was much, much more segregated as a result of these federal policies than it was before, or would be today without them. The new deal and as you say was the main force in creating residential segregation across the north, the west, the midwest, and the south as well. There were two chief policies that I think were the most powerful, although there were many others. One was the public housing program. We typically think today of public housing as being a place where low income families, particularly African-Americans, Hispanics as well, unemployed's, single parents, single mothers live. That's not how public housing began, and it's quite the opposite of how public housing began.

Public housing began for civilians during the New Deal, at the very beginning of the New Deal. It was an attempt to house white, lower-middle class families who lost housing during the depression. There were some African-Americans who were accommodated, but mostly it was a program for white middle class families, and it was segregated everywhere. There were separate projects for African-Americans, and separate projects for whites. I'll give you an example of how the government actually created segregation, not merely reinforced it. Langston Hughes, in his autobiography, called The Big Sea talks about how he grew up in Cleveland in an integrated neighborhood. Many neighborhoods in many cities were integrated at that time, much more than they are today, simply because workers didn't have automobiles, and the only way they could get to work was by walking or taking very short rides on buses.

You had neighborhoods that were comprised of Irish immigrants and Italian immigrants and Jewish immigrants and African-Americans and white workers who had come from rural areas, all living in the same general neighborhoods and walking to work. This is not to say that every other house was occupied by an African-American, but broadly these neighborhoods were integrated. Well, in 1933, the Public Works Administration of the New Deal began building public housing, and in Cleveland, it demolished. It razed the neighborhood where Langston Hughes lived, and instead built two separate public housing projects. One for whites, one for blacks, creating segregation where it had never been known before.

This became much more forceful during World War II. When workers, both blacks and whites, flocked to cities to take jobs in the defense industry. In some cases, they took jobs in defense industries in cities where there had been no African-American population previously. One of the examples I focus on in my book is Richmond, California, which later became a black ghetto. One of the poorest and most segregated communities in California. Before World War II, there were virtually no African-Americans living in Richmond. About 250, mostly domestics working for white families, but Richmond became a center of ship-building. It had a deep water port across the bay from San Francisco, and tens of thousands of workers came to work in those shipyards. 100,000 actually. Beginning of World War II, there were, as they say, a handful of African-Americans in Richmond. By the end of World War II, there were 15,000. The population as a whole of Richmond grew from 10 to 15,000 to over 100,000 during the war.

Workers coming to Richmond had to have a place to live. Clearly, the growth of that kind of a city is really unimaginable, and the federal government had to provide housing if they wanted to keep the shipyards working. It built separate projects for African-Americans and for whites. The projects for African-Americans were built along the railroad tracks in the industrial area. The projects for whites were better constructed and built in the residential areas where whites were living, and this is another example of a place where segregation was created where it hadn't previously existed.

Nick Gillespie: Talk about …

Richard Rothstein: This went on … Go ahead.

Nick Gillespie: I was going to say … Yeah. Discuss the impetus for racially segregated housing projects particularly for wartime workers, everything was being commandeered into the war effort at that point. Part of it was the local community, right? People saying, "Hey, suddenly there's an influx of blacks where there hadn't been any and we don't want them living in white areas," but there is also a political deal that went into the whole kind of notion of the federal government sponsoring housing that, if I'm recalling right in your book, you talk a little bit about how there were economic conservatives who tended to be republican, northern republicans, because there were no republicans in the south that didn't like the idea of the government doing a lot of this stuff. Then, there were southern democrats who didn't like the idea of integrated anything, and how did that play into federal policy? I guess during the war too. In World War II, the armed forces were segregated as well.

Richard Rothstein: Well, I've lost track, but I think I've got five separate questions.

Nick Gillespie: Okay. I apologize. It's a personality defect.

Richard Rothstein: Well, that's okay. That's okay. Let me try to separate them. First, let me say that the theme of my book is that, and I think you suggested this earlier, is that we commonly think of racial segregation in metropolitan areas nationwide as being something that the supreme court has called de facto, and it's become sort of a consensus among liberals and conservatives alike, that the reason that we have residential segregation is because of private prejudice or personal choices or perhaps income differences, and all of those are not state action and under our constitutional principles today, if you have racial segregation or any racial pattern that's not attributable to state action, there is no permissible constitutional remedy for it. Only state action is remediable and the court calls that the jury segregation.

I don't deny, I certainly don't deny, it would be absurd to deny that private prejudice played a role in segregating metropolitan areas. Certainly the things you're talking about, whites not wanting African-Americans to live among them, played a role, but under our constitutional theory that we accept today, if the federal government structures that private activity, it becomes unconstitutional. Even if there was private prejudice involved, and there certainly was, the heavy hand of the federal government that reinforced it, structured it, and perpetuated it, turns it into a form of state action, even if there was private prejudice involved as well, but we can also exaggerate the private prejudice. For example, to go back to San Francisco is another example.

One of the other major wartime institutions in San Francisco was the Hunter's Point dry dock, a big Navy facility in San Francisco proper. This also had a vast increase in workers flocking to work in the Hunter's Point docks, and the city of San Francisco proposed to build housing for those workers on an integrated basis. The Navy overruled the city and insisted that the housing be segregated on the theory that there might be a conflict between white and black workers if they live together and that would disrupt war production, but the local authority was perfectly prepared to integrate that housing. It was something that was imposed by the Navy.

As for your next question about private interest not favoring housing, I think you're referring now to something that happened after the war. Certainly the private interests understood the necessity of the government building housing for war workers during the war. In fact, the Lanham Act was passed in congress with overwhelming support. This is the Lanham Act was an act that provided for war housing being built for workers in defense industries, but the condition that congress put on it was that after the war, that support for public housing would be ended, and that's what happened.

In 1949, President Truman proposed a new massive public housing effort. He proposed it, he had to propose it because there was another enormous housing shortage for civilians after World War II, in the years after World War II. During the war, no material was permitted to be used for civilian construction. It all had to be directed to the war effort. In addition, the private real estate interests were not building housing for civilians, either during the depression or afterwards, of modest means. They were only concentrating on building homes for affluent families. President Truman proposed a new massive public housing effort, again primarily for whites. Returning war veterans who were forming families and were living in quonset huts, had no place to live, or doubled up with families.

He proposed a massive public housing effort and conservatives in congress, republicans in particular, opposed it, not for racial reasons, but as you say, because they were oppose to any public involvement in the private housing market, even though the private housing market wasn't meeting the need for housing, and they decided that they would defeat the Truman bill with a technique that we still know today. They had a tactic of a poison pill amendment. A poison pill amendment is typically an amendment that opponents of a bill put on a bill with the expectation that if their amendment passes, then the entire bill would become unpalatable to a different coalition and the bill will be defeated.

Republics in congress put forward an amendment to Truman's 1949 Housing Act, requiring that from now on, public housing had to be integrated. No more segregation in public housing. They assumed that conservative republicans would be able to get north and liberal democrats to support this amendment, and the amendment would pass. Then once the housing bill was saddled with an integration amendment, southern democrats would abandon it, and the entire bill would go down to defeat. Well, the result was that northern liberals campaigned against the integration amendment. They were led by Hubert Humphrey, a civil rights advocate in the senate, the leading civil rights advocate in the senate was Paul Douglas of Illinois, and he also led the campaign against the integration amendment. The integration amendment was defeated. The 1949 Housing Act was adopted, preserving segregation in public housing.

As a result of that act, the massive high-rise towers that we're familiar with today were built across the country. The Robert Taylor Homes in Chicago, Pruitt-Igoe in St. Louis. That actually is a good example of what happened. The Pruitt Towers were for African-Americans. The Igoe towers were for whites. We think of Pruitt-Igoe, at least people who are familiar with these projects, think of Pruitt-Igoe as one project, but it was actually two. One for African-Americans, and one for Whites. Let me just side address one of the other questions …

Nick Gillespie: Sure.

Richard Rothstein: With your multiple questions in format. It is true, and Ira Katznelson has documented this extensively in his books, that the New Deal had to compromise with southern democrats to get much of its economic program passed by adopting it as a segregated program, or a program that excluded African-Americans. For example, the minimum wage laws excluded the occupations in which African-Americans were predominant, like agriculture, or domestic service. Social Security similarly excluded those occupations, and on that basis, the programs were passed with southern democratic support, but the southern democrats never insisted on segregation in the north in any of these programs. Social Security is a national program. You couldn't have two different racial rules in Social Security. It was the same thing with the minimum wage.

In housing, there was no compromise necessary with southern democrats, because southern democrats never insisted on segregation of housing in the north. They only wanted their right to preserve segregation in the south. The federal governments in position of segregation in public housing was not as a result of compromise with southern democrats.

Nick Gillespie: One of the interesting things about your book is that you … You mentioned Hubert Humphrey and Paul Douglas who were champions of civil rights long before it was popular among whites for sure. That history is very complicated and nuanced. You're not making excuses for anybody, but explaining the multiple goals that they were trying to make, it makes for an incredibly rich reading experience.

Richard Rothstein: Yeah. Well, thank you. Let me just add what I was going to say, is that I think this will become plausible to you. The idea that southern democrats did not insist on housing segregation in the north, and that we know that schools are segregated in the south, and there was never an effort by southern democrats to impose school segregation outside the south, so long as they could preserve it in the south, they were quite content. The same thing would have been true of housing, so this cannot be attributable to a deal with southern democrats.

Nick Gillespie: Right. Well, that's part of …

Richard Rothstein: Let me go back …

Nick Gillespie: Okay. Go ahead.

Richard Rothstein: I'm sorry. No, go on.

Nick Gillespie: No, no, no.

Richard Rothstein: Go ahead.

Nick Gillespie: Well, I was going to say that part of what I found powerful about the book is that it really forces those of us who were born above the Mason-Dixon line to come to terms with the history of our regions of the north and of various cities in the north where it's always been easy for people to look down at the south, or even southerners to say, "Well, that was in the past and it was a number of people," but actually it was a national phenomenon, and that goes into understanding history and looking for forms of redress. You were about to say?

Richard Rothstein: Right. Well, I was going to go on. I mentioned the Pruitt-Igoe towers a few minutes ago and let me use that as a way of leading into the second major federal program that was perhaps even more powerful than public housing in creating segregation across the nation. The towers and all of those towers up to the 1949 housing act, were built in the early 1950's and by the mid 1950's, the civilian housing market began to recover. Suddenly, you saw, in Pruitt-Igoe for example, the Igoe Towers, which had been built for Whites only, had large numbers of vacancies. The Pruitt Towers had long waiting lists, and this was true throughout the country.

Suddenly in the early 1950's, even late 1940's when the housing markets began to recover a little bit, you had large vacancies in white projects everywhere. Most projects were for whites, and long waiting lists for African-American projects. The reason for that was that the federal government, and its other major program to segregate the country, was subsidizing whites and creating incentives for them to leave public housing and to leave center cities to relocate to suburbs that were all white, and the suburbs were created by the federal government, subsidized by the federal government on an all white basis.

For example, perhaps the best known example of this is Levittown, just east of New York City. 17,000 homes built in the late 1940's by Levit primarily for returning war veterans. The Levit family could never have assembled the capital they needed to build 17,000 homes, for which they had no buyers on their own. It was an enormous undertaking. They did so only because the Federal Housing Administration guaranteed their bank loans for construction purposes on condition, an explicit condition, that no homes in the development be sold to African-Americans, and that every deed in Levittown has a clause in it that prohibited resale to African-Americans.

Again, this wasn't just Levittown. An equally large development south of Los Angeles, Lakewood built by Mark Taper, was similarly restricted by the federal government and in every metropolitan area in between. The Federal Housing Administration subsidized developers of large subdivisions on condition that they do not sale to African-Americans. You had these two policies …

Nick Gillespie: What was the anxiety about selling to African-Americans that was underscoring both the construction loans, but also mortgages? Who was it in the federal government then that was like, "Okay. We've got to put that in there."?

Richard Rothstein: Well, most people are familiar with the fact that the Federal Housing Administration would not insure mortgages, individual mortgages, to African-Americans in white neighborhoods. That is something that is not a mystery to most people, but what very few people know about today, although it was well known at the time obviously, everybody in Levittown knew that they had those deeds on their homes, is that the more powerful action of the FHA was to create these all white suburbs with the bank loan guarantees that they gave the developers. Their rational was that property values would decline if African-Americans lived in white neighborhoods, but this was a pure figment of the FHA's imagination. In fact, property values increase when African-Americans moved into white neighborhoods at the time, because African-Americans had so few housing options that their supply was constricted, and they were willing to pay more for the same housing than whites were paying. There were studies that were available to the FHA that documented this.

Nick Gillespie: What was the …

Richard Rothstein: The FHA's notion …

Nick Gillespie: Yeah. What was the animus in the FHA? Is it attributable to a few, I don't want to say lone gunman, but why were they so hell-bent on restricting access of African-Americans to these new developments?

Richard Rothstein: Well, I can't tell you that.

Nick Gillespie: No?

Richard Rothstein: I can only tell you what their rational was, and their rational all had to do with property values and it was a false rational.

Nick Gillespie: The other program …

Richard Rothstein: Of course, let me …

Nick Gillespie: Yeah. Go ahead.

Richard Rothstein: I'm sorry. Let me just say that the FHA was populated largely by people recruited from the real estate industry. Just as to date, federal agencies are sometimes dominated by the industries that they regulate. Not that this came from the private real estate industry, but they were working for the government and they were imposing an unconstitutional system in their actions on behalf of the federal government.

Nick Gillespie: A kind of a tendon to that as well as you talk about for VA mortgages or Veterans Administration mortgages under the G.I bill and other things. I don't want to say that one form of racial exclusion is worse than the others, but it's powerful too that you talk about how returning black veterans knew not even to bother to apply for VA mortgages because they wouldn't get them.

Richard Rothstein: Well, they could get them in some cases for African-American neighborhoods, but they could not get them to live in the suburbs that were being created for whites all across the country.

Nick Gillespie: In the chapter about the San Francisco Bay area, I guess it's the first chapter of the book after the preface, but you spend time with a man named Frank Stevenson, who in many ways … Because part of what you are talking about in the book, which I think is immensely powerful is that this isn't simply about racial … It's not simply about residential segregation, because the effects of residential segregation play out in terms of not just lack of housing, but accumulation of capital across generations, access to a good education, and a variety of other things. Tell our listeners a little bit about Frank Stevenson and how he was a wartime worker in Richmond, California. How is his experience kind of exemplary of the problems that you're seeking to address with your book?

Richard Rothstein: Sure. Well, Mr. Stevenson was born in Louisiana, and like many young African-Americans at the time during World War II, he came north looking for work. He eventually found a job in a Ford motor plant in Richmond that had been converted to defense production during the war. It was making, or reconditioning tanks and Jeeps for the war effort. After the war, the plant was returned to Ford to make its cars for civilian purposes, and Frank Stevenson continued to work in that plant until 1955. In 1955, Ford announced, and this was typical of what was happening across the country, Ford announced it was closing its Richmond plant and moving to a rural area far south, about 50 or 60 miles south of Richmond.

That rural area was completely undeveloped. It's now part of what we call Silicon Valley, but at that time, there was no technology there. It was simply farmland. The town was actually called Milpitas, and it's a bustling Silicon Valley town today. Ford moved its plant to Milpitas in the mid 1950's and around the plant and in that area, subdivisions of the kind that I was describing were springing up to house white workers. Ford wasn't the only plant that moved there. Others did as well. The developments that were being built in that area were being subsidized by the Federal Housing Administration as I described for whites only.

The United Auto Workers Union negotiated an agreement with Ford that all workers in the Richmond plant could transfer to the new Milpitas plant. The problem was that white workers could find a place to live near Milpitas, but African-American workers couldn't. Most African-American workers didn't move. They couldn't move. They couldn't continue to have their secure, good, blue collar jobs in the Ford plant when it moved so far away. Frank Stevenson was a little bit of an exception. He got together with eight other black workers from the plant and they bought a van and did the 110-mile round trip commute every day to keep their jobs in the Ford plant, but they weren't able to buy homes in the Milpitas area.

Well, those homes, like the homes in Levittown and like the ones in Lakewood that I described, and everywhere else in the country, at the time were selling to workers for about 10,000, $11,000 a piece. That was the typical price of a home, and today's dollar is about $100,000. That's what the price of the homes were in the early 1950's. Working class families, workers certainly at Ford could afford to buy homes at that price. That was about twice national median income, and workers can afford to buy homes at twice national median income.

Today, those homes … Well, in Milpitas, those homes are now selling for half a million dollars. In Levittown, it's 300, $400,000. Those homes are now selling at six, seven times national median income, and they're unaffordable to working class families. In the two or three generations since those homes were built, the white families who bought those homes gained, like I say 200, 300, $400,000 in equity. That's where most American families get their wealth is from their equity in housing.

The white families, workers at Ford and places like that across the country, retuning war veterans in Levittown, gained that wealth and used it, as you said, to send their children to college. They used it for medical emergencies. They used it to take care of their aged parents. African-American families who continued to rent in urban areas gained none of that wealth, and today overall on a national average, African-American incomes are about 60% of white incomes, but African-American wealth is about 5% of white wealth, and that enormous difference between a 60% income ratio and a 5% wealth ratio, is almost entirely attributable to unconstitutional housing policy that was practiced in the mid-20th century.

In 1968, you referred to this earlier, in 1968, we passed the Fair Housing Act, which said to African-Americans, "Okay. You can now move to Levittown or to Milpitas or to Lakewood," or to any of the other suburbs that I've described, but it wasn't really a meaningful offer, because the homes are now unaffordable to working class families. They're unaffordable to white working class families as well. The unconstitutional segregation of housing that produced this enormous wealth difference has an effect today in the gap between the economic circumstances of white families and black families that otherwise would not exist, and it should have been remedied.

Nick Gillespie: I would add to that too, when you think about any of us who have had long commutes, commuting at 110 miles a day, you don't just loose capital and wealth accumulation and what not. The time. Frank Stevenson and the other seven guys in the van, they were killing probably two, three, four hours a day driving that they could have spent enjoying themselves, or just having a better quality of life. Before we talk about your proposed solutions, you had mentioned … I want to propose a counter factual and get your take on it. You said that there were many places in urban American particularly, and people obviously in the 20's, teens and 20's were starting to move to cities because of industrialization and the opportunities, the economic opportunities, the cultural opportunities of cities.

What if after the tenement reform laws in the early 20th century, which mostly they were focused on things like fire safety, ventilation, waste disposal, sanitation. What do you think would have happened if the government had actually stayed out of housing? No racist FHA mortgage policies, no red lining, no zoning, no urban renewal, which was a direct result of the Truman Housing Act. James Baldwin once referred to that as the negro … Urban removal was the negro removal act, he said. Would the US have been … Would it be less segregated than it is now?

Richard Rothstein: Well, I can't imagine the government having stayed out of housing during the depression. You had millions of families that lost housing, that were without a safe and sanitary place to live. The creation of the FHA, which was established in 1934, pioneered the amortized mortgage that permitted families, working class and middle class families to buy homes for the first time, but before that …

Nick Gillespie: Just to explain that, they were short term, constantly readjusted mortgages, but the 20-year or 30-year mortgage is essentially a product, or there is a strong argument that it's a product of government intervention into the market and structuring.

Richard Rothstein: Well, yes. I think it's more than a strong argument. It didn't exist.

Nick Gillespie: Yeah.

Richard Rothstein: It didn't exist before the FHA. There was a predecessor agency, also a New Deal agency the year before called the Home Owner's Loan Corporation, which actually pioneered this kind of mortgage, but that was only for refinancing homes of more affluent families that were losing them during the depression. The FHA pioneered this for first time home buyers, and I can't imagine how you could have solved the housing shortage. It was an enormous national crisis. The same thing is true of the public housing program that I described is you had a crisis.

World War II, the example I gave you of 100,000 workers coming to Richmond, the town that had a population of 10,000 before the war. The private sector wasn't going to provide housing for them. Many workers were living in open fields. The notion that the federal government should have or could have stayed out of housing at this point, I think I don't find plausible. The question is, when the government did enter housing, what if it had done so in a non-segregated basis? Again I want to say, I'm not suggesting that there wasn't private racial prejudice, and that we wouldn't have had some segregation in the country absent government action, but when the government entered the housing market, as I think it had to do on a segregated basis, it created reinforced and perpetuated segregation that created long term patterns that otherwise would not have been created and that the term and the residential racial landscapes that we experience around the country today.

Nick Gillespie: You argue in the book, and this is one of the really … I think one of the interesting twists is that you're using Chief Justice John Roberts, who is nobodies idea of a liberal, but you essentially agree with his legal theory about whether or not the government should remedy certain forms of discrimination, but you disagree with the facts. To put a little bit of … You had referred to this earlier, but at one point, Robert said, "If segregation is a product, not of state action, but of private choices, it does not have constitutional implications." That's Robert's theory, and you say you're fine with that, but Roberts has his facts wrong, because what your book shows is that the government actually … That state action was a really major factor, if not the major factor, so that the government … It's right and proper that the government should be directly involved in addressing the inequalities that stem from residential segregation enforced by the state.

With that as a backdrop, let's talk about your specific suggestions for policies that you think will ameliorate not just the residential segregation patterns, but disparities in income, education, and mobility. You write that federal subsidies for middle class African-Americans to purchase homes in suburbs that have been racially exclusive are the most obvious incentives that could spur integration. How would that work? How do you find the people who would qualify for that kind of program? Then, how do you make it happen?

Richard Rothstein: Well, let me say first that I also say in the book that I'm very reluctant to discuss remedies because I think that they're inconceivable. They're politically inconceivable today. I am not suggesting that the kind of thing that you just mentioned, the program of liberals or anybody else in the country today, because until we have a new consensus about the extent to which the government is responsible for residential segregation, we can't have the kind of conversation that is necessary to begin to consider remedies together. I do talk, as you mentioned, I don't mind talking about some remedies that we might be able to develop, but I'm not advocating them today. What I'm advocating is a much broader discussion of this history, because we now have a national consensus that we have defacto segregation, and that consensus has to be destroyed before we can have an intelligent conversation about remedies, and if we have that conversation, it may be that other people have much better suggestions for remedies than I do.

Nick Gillespie: Yeah. Because you talk about tax credits as well as changes in zoning laws.

Richard Rothstein: Right. These are some of the things we might consider, but again, I want to emphasize, I'm not suggesting these for current policy.

Nick Gillespie: Right.

Richard Rothstein: Because they're non-starters, and they should be non-starters, because they won't have any sustainability unless there's broad support for them, and there can't be broad support for them unless we understand this history. The subtitle of my book is "A Forgotten History of How Our Government Segregated America." As I said, this was once well known, but unless we relearn it, we can't develop remedies. Yes, we have … I'm sorry, go ahead.

Nick Gillespie: Well, I was going to say with the subtitle and whatnot and the whole subject of the book, you can see libertarians lighting up the capitalists on Wall Street enjoying the book, and lighting up their cigars, and twirling their mustaches and saying, "Look, you see we were right all along. It's the government is the bad actor here, conservatives as well." How has the liberal response to your book been? Has it been accepting or has it been kind of hostile? Because in a lot of ways, the book is a challenge to the perceived history of federal intervention into markets.

Richard Rothstein: Well, this goes directly into what I was saying a minute ago. I don't think there has been a challenge to my book from anybody really, because it's factual. I'm talking about factual history, and I haven't counted but I have dozens of pages of source citations and the history is impregnable. People may disagree with what the consequences of this are, and as I say, that's for later, but first we need to relearn this history, and nobody has challenged any of the historical accounts that I have provided here. We've just forgotten this history.

Now, so far as libertarians go, even if you believe that we should have the smallest government possible, that the government should not be involved in the market place, and that these problems can take care of themselves, if you believe in the American constitution and I preserving a constitutional democracy, that has to be one exception to that, and that is to remedy unconstitutional actions. One of the things I say in the book is letting bygones be bygones is not a constitutional policy. Aside from remedying constitutional violations, you want minimal government. You have to confront the need. If we're going to be serious about preserving our constitution, you have to confront the need to remedy constitutional violations, because that's an obligation that goes beyond a preference for big government or small government.

You can quibble with the kinds of remedies we're going to impose, and how effective they are going to be, but we do have an obligation to remedy unconstitutional actions of the government in the past, and my hope is that consideration and familiarity of this history will lead to that kind of discussion.

Nick Gillespie: I think it does, and it presents a very interesting intellectual challenge to, I think libertarians in a number of ways, one what you just outlined, but also the way in which the housing market, which we take now as kind of a product of nature was actually structured when you were talking about the introduction of a long term fixed rate mortgage, did not arise out of market forces. I think there's a lot of room for interesting conversations about whether or not it's a good thing to incentivize people to buy houses, and you might agree that the mortgage interest deduction, which ultimately is a give away to wealthy Americans, mostly white wealthy Americans, it does very little. It doesn't actually have a clear effect on the number, the rate of people buying houses, but it does increase prices, which is problematic, etc. I guess what I would add to your forgotten history of the way that government created residential segregation, it's clear from the housing crisis that government interventions into housing markets often work out really, really badly for everyone.

I do think your book is a great challenge to libertarian purists who think that whatever they like is a product of natural market forced as opposed to previous iterations of intervention. For me, that's one of the things. I like books that stretch my mind or make me have to scratch in uncomfortable areas. It certainly does that. Just a little bit, could you give a quick summary of how you came to write the book? Why you were interested in this topic, and how you define yourself in ideological terms?

Richard Rothstein: Well, there were many influences on me on this book, but the main one, and I describe this is I used to be a policy analyst in the field of education, not race. I was for a period, the national education columnist at the New York Times. I wrote about education for the Economic Policy Institute for many years about education policy. In 2007, I read the decision that the Supreme Court issued, that you referenced before in a case involving school integration in which the school districts in Louisville and Seattle had school choice programs, and they were very modest. They were for high school students, and they allowed parents to choose the school, which their children would attend within the cities of Louisville or Seattle, but if their choices tended to exacerbate segregation, those choices would be subordinate to the choice of a parent whose choice would increase integration.

If you had a predominantly white school and two children applied, a black child and a white child, the black child would be given slightly greater preference for acceptance into that school than the marginal white child. Very, very modest integration. It wouldn't have accomplished much, but it was a modest integration plan. The Supreme Court, as you indicated before, found that those programs were unconstitutional, that you could not use race to encourage integration in Louisville and Seattle and the reason that the court gave was that the schools in Louisville and Seattle were segregated because the neighborhoods in which they're located was segregated, and the neighborhoods, which they're located was segregated, as you say, de facto by personal choice and private prejudice.

You mentioned John Roberts, and he wrote the plurality opinion in that case with this theory, but what struck me in reading these opinions, the opinions in this case was that the liberal justice, Stephen Breyer agreed with the notion that segregation in Louisville and Seattle was simply de facto, a product of private choices. He agreed that this de facto segregation, the basis of his dissent was that if you have de facto segregation, although you can't be compelled to integrate, you should be permitted to voluntarily. I read that decision and I thought that was wrong, and I was stunned by the fact that there was agreement across the political spectrum that we have de facto segregation in Louisville and Seattle, because I had read in the past a few things that made me aware of some government action that contributed to the segregation of those cities. I had no idea that it was extensive as I uncovered in doing the research for this book. I decided to look into whether the claim that we had de facto segregation in Louisville and Seattle could be sustained, and that's really what got me started on this.

As they say, I was stunned by the extent of government involvements in segregating not only these cities, but every city in the country, and the vast array of different policies. I only mentioned two. The FHA and Public Housing. My book, as you know, goes into many others, that federal, state, and local policies that also contributed in the segregation.

Nick Gillespie: Then, tax policy.

Richard Rothstein: It all started …

Nick Gillespie: Yeah. Yeah. It's an atlas of dispar in may ways, and it's good to know this history, but it's fascinating, but also kind of bleak reading the extent of all of the kind of systems that were arrayed to further it.

Richard Rothstein: Racially explicit systems, not merely the implicit results of benign policies.

Nick Gillespie: Right. Are you optimistic about … There were, broadly speaking, I guess always two schools of thought about race relations, but also economic opportunity and living whatever we wanted to define as the American dream. Do you think are we … On a certain level, it seems racial politics are polarized in a way that they haven't been for a while. Are you optimistic about relations, race relations, and kind of economic relations getting better, or are you generally pessimistic about that?

Richard Rothstein: Well, I'm very pessimistic about the growth in inequality in all areas of American society, having nothing to do with race. There was an article in the Times yesterday about … Well, I don't know when you're going to broadcast this, but on June 4th, about the extent to which affluent families are buying into boutique medical care, which they jumped the line in terms of care for their families. Inequality is pervading all areas of American life and quite aside from race, and that's a very disturbing trend, and I don't know how we're going to reverse it, though I think we have to.

So far as race goes, the book research, I know you found it stunning and made you scratch yourself. Actually, it makes me optimistic because so long as we believed and believe that our racial segregation happened by a million private choices and individual actions, it's very hard to see how it can be undone by a million opposite private choices and individual actions. If we understand that our segregation is heavily determined by government policy, it's much easier to say to ourselves, "Well, if government policy did it, government policy can fix it."

That gives me hope about beginning to address these problems of race that I didn't have before I did this research, and clearly there is more discussion and we are, as you say, more polarized about race than we seemed to be before, although I don't know if that's true, maybe just more open than it was before we started talking about these things, but the police violence against young African-American men that caused so much attention has gotten us talking about these things. Ta-Nehisi Coates, a writer from The Atlantic is getting a lot of attention for this, and there is a lot more to discussion about this now.

Nick Gillespie: There's a transpartisan move for criminal justice reform and reevaluating drug laws, which are either explicitly or implicitly racist in their effect.

Richard Rothstein: That's right. Yeah.

Nick Gillespie: Well, you know what? We're going to leave it there. I want to thank you, Richard Rothstein, the author of The Color of Law, which recovers a forgotten history of how the government worked to segregate residency in American. Richard Rothstein, thanks so much for talking.

Richard Rothstein: Thank you very much.

Nick Gillespie: This has been the Reason podcast. Thank you for listening. I'm Nick Gillespie. Please subscribe to us at iTunes and rate and review us while you're there.