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Millions of Americans are in crushing medical, student, or housing debt as the bipartisan elite fight to preserve their anti-democratic fiefdoms. This week on Intercepted: Organizer Astra Taylor, author of “Democracy May Not Exist, but We’ll Miss It When It’s Gone,” analyzes “minoritarian” rule in the U.S. and how capitalism undermines democracy, and lays out concrete ideas for fighting back. Keeanga-Yamahtta Taylor, author of “Race for Profit,” talks about the history of how the U.S. government and predatory lenders conspired against black homeownership in the United States. She also explains why privatizing affordable housing initiatives is a recipe for continued disaster.

Gayle King: Donald Trump Jr. is the oldest son of President Donald Trump and he joins at the table. Good morning to you, Donald Trump.

Donald Trump Jr.: Good morning. How are you doing, Gayle?

Announcer: Dumb, a person lacking mental power.

DT Jr.: I get that I’m the son of a billionaire from New York City — I’ve benefitted from my father’s name. I’m not going to hide from that whether it’s you know, my hobbies, all the outdoor stuff that I do. Every weekend, I get out. I’m fishing. I’m shooting. I’m hunting. This is a guy, I’ve been sleeping on his couch for ten years during deer season. This is the White House operator. The president would like to speak to you. JFK would be an alt-right neo-Nazi terrorist according to them today.

Announcer: Idiot, an adult mentally inferior to a child of three.

DT Jr.: Ohhhh, well, you’re not supposed to — This may be the one place where I’m just going to say, I’m on my own and maybe you don’t have the authority to start talking about this because Don? Getting a little hot.

[Music interlude.]

Jeremy Scahill: This is Intercepted.

[Music interlude.]

JS: I’m Jeremy Scahill, coming to you from the offices of The Intercept in New York City. And this is episode 106 of Intercepted.

Donald J. Trump: The radical Democrats are going totally insane. They want to obliterate the rule of law, drive out faith from the public square, and you know this, silence you online, confiscate your guns.

[Crowd boos.]

JS: I think it’s safe to say that anyone with a basic level of common sense doesn’t think of Donald Trump as a grand symbol of democracy. He lost the popular vote in the U.S. by millions of votes and became president through the arcane right-wing giving tree that is the Electoral College. He is clearly using the office of the presidency to promote his family business and to wage war on his political opponents. He has advocated xenophobia, sexism, racism from the most powerful podium on the planet. His entire career has been based on being born into extreme wealth, screwing over poor people, taking advantage of tax loopholes and engaging in totally crooked scams and schemes. But, as we’ve talked about often on this program, there is a real danger in assessing Donald Trump as an American anomaly — that one really, truly corrupt president that we had after Richard Nixon.

I say it’s dangerous because it somehow presupposes that the U.S. system is actually based on democracy or functions as a democratic state and that Trump is trashing that great tradition. It’s more accurate to say that Trump is a manifestation of the very kind of product that the U.S. system is capable of churning out.

The 2020 presidential campaign is the perfect laboratory to analyze this. On the one hand, you have Bernie Sanders and, to a lesser extent, Elizabeth Warren, offering up some pretty serious challenges to the ultra-corporatized, legalized bribery and corruption systems on which this country runs under both Democrats and Republicans. Their candidacies and ideas and proposals are not just scary to Republicans and Donald Trump. They are terrifying to the Democratic Party establishment and its preferred candidates in this race. On the other hand, you have Joe Biden, the Clinton machine and the ascent of the candidacy of someone like Mayor Pete Buttigieg, all of which feels a lot like a corporatized version of activism on behalf of entrenched power and corporate interests.

Pete Buttigieg: I think that Americans should be free to choose whether they want the private plan or the Medicare plan we’re going to set up. I think if we get it right, pretty much everyone’s going to want in on that Medicare plan. But I’m not going to decide for you. I think we’ve got to get out of this my way or the highway idea.

JS: This really comes into sharp focus when we talk about Medicare for All or wiping out medical and student debt or taking on so-called free trade agreements, not to mention the climate crisis. Last month, ProPublica reported that debt collection is now “an $11 billion industry” and that “medical debt makes up almost half of what’s collected each year.”

Medical debt is also the most common financial burden affecting American families. Up to 79 million people in this country are in a lethal debt trap. When it comes to health care, housing and education debt in particular, the United States is a dystopian nightmare that has no relationship whatsoever to democracy. Donald Trump didn’t create that reality. It was built up by Democrats and Republicans.

Under our current, duopolistic political system, the opposite of Donald Trump’s presidency is not democracy. On a whole range of issues, almost any Democrat may likely be better for many many millions of people than Donald Trump, but it doesn’t mean that establishment Democrats are, on their own merits, good for the masses. Far from it.

On today’s show, we are going to dig into these issues with two really brilliant people who have spent years challenging the U.S. system outside of the traditional partisan framework. Coming up on the show, we are going to be talking to Keeanga-Yamhatta Taylor. She has an important new book out about the history of how the U.S. government and predatory lenders conspired against Black home ownership in the United States.

But first, I am joined by Astra Taylor. She is a political organizer, author, and filmmaker. After organizing with Occupy Wall Street movement, Astra Taylor co-founded the Debt Collective that’s an organization that has developed some very innovative and effective tools to help people dispute and challenge their debt. She is also a documentary filmmaker and her latest film explores the question: what is democracy?

Astra Taylor: Do you live in a democracy?

Interviewee: Democracy, doesn’t that mean that they tell you what to do?

AT: Do you live in a democracy?

Interviewee: Yes.

AT: Do you trust the government?

Interviewee: No.

AT: Do you vote?

Interviewee: No. No, I do not. I’ll never vote. Ever.

JS: Astra Taylor’s new book is “Democracy May Not Exist, but We’ll Miss It When It’s Gone” and she joins me now.

Filmmaker and Organizer Astra Taylor on Democracy, Capitalism, and Debt

JS: Astra, welcome to Intercepted.

Astra Taylor: Hey, thanks for having me.

JS: What does it say about the nature of power in the system in this country, the kinds of attacks that we’re already seeing from the Pelosis, the Bidens, the Clintons of the world on some of the ideas being put forward by Bernie Sanders and Elizabeth Warren?

AT:These numbers are so overwhelming, what they show us is there’s broad majoritarian support for progressive social policy. This is what the people, the Demos want. And we’ve entered a phase where that’s sort of undeniable, if you just look at the numbers. But as you just pointed out, there is a whole establishment, a centrist Democrat, corporate establishment, that absolutely is opposed to the will of the majority. So I think that’s how we have to think about this. Right now, it’s commonly said, we’re in a moment of democratic crisis.

Chris Hayes: The country’s in the midst of a profound democratic crisis.

Bernie Sanders: The great political and democratic crisis we face now in this country.

AT: That conversation has been framed around populism, warnings about unruly people we can’t trust. But I think for me, the problem is actually, that we’re living in the age of minoritarian politics, minoritarian control. You see that very strongly with the GOP and the fact that they want a politics of hierarchy, basically a return to aristocracy, right? They’re willing to gerrymander and disenfranchise voters, they absolutely don’t want people to go out and vote. But we see it with the Democrats as well, right? We see that they want to tell their constituencies, “sorry, you can’t have these things that are not only popular, but actually pretty commonplace in other industrial democracies.”

JS: This pushback, though, from the Democratic establishment a year away from the election, they’re operating from a place of fear against this change. What do Pelosi and Biden and Clinton, what do these people want if they don’t want that kind of change?

AT: I mean, it’s interesting because you can have a conversation that’s like this is going to be difficult given the American political system and the number of veto points and the way that it’s structured and the way that money is a form of political speech, and the fact that we essentially have a system, an electoral system where bribery is legalized in terms of campaign contributions, right? You could say, there are lots of obstacles in the way of this. That’s not how they’re framing this. So I mean, I think there probably is something deeper. There’s a threat to their authority, right, and to the system that helped them rise to power and stay in power.

Thinking about democracy writ large, I mean, there’s a bigger thing they’re afraid of though because what this means, to have universal health care is to decommodify this huge industry, and it’s to connect decommodification with democratization, right? Maybe there are huge areas of social life that should not be not just subjected to the market extremes but actually taken off the market completely, right? And that’s very threatening to the status quo.

Because once you start decommodifying one area, well, why not others? Let’s take education off the market. Let’s take housing off the market. What would it be like to live in a home that you don’t have to pray appreciates in value that’s not actually a speculative asset or someone else’s speculative asset? So, I think that to me is the deeper issue and that is deeply threatening to a ruling class.

JS: I’m wondering if you believe it’s actually possible to fundamentally change anything about this country politically through the ballot box for president?

AT: The problem is that for too long we thought democracy was just the ballot box, was just electoral politics, right? I mean, all sorts of forces have colluded to make that our impression of what democracy is. I mean, the media is obsessed over elections. Political scientists try to measure democracy through these metrics of like, does it have free and fair elections and can people vote?

So, there’s been this reduction of democracy to that — to whether or not you can just get to the voting booth — without even a deeper conversation of well, is your vote counted? How is the election structured? Is it winner-take-all? Is it proportional representation? Are you automatically registered or do you have to struggle to be registered? So there are all these deeper questions you can have around elections, and even those are off the table. I think if democracy — this is what I’m saying in my book “Democracy May Not Exist, But We’ll Miss It When It’s Gone.” I’m saying democracy is paradoxical. Now, first and foremost, I see there’s a class component to democracy. The best definition of democracy in my mind comes from Aristotle and he said, democracy is the rule of the poor because poor people will always outnumber the rich and if democracy is the rule of the many, then it is by definition, the rule of the poor.

So that’s something we’ve definitely forgotten today because we live in something much closer to an oligarchy, rule of the rich. But beyond that, so beyond that class dimension, I look at democracy as this series of tensions. So the tension between freedom and equality, between the present and the future, between the local and the global, between choice, but also coercion. When is coercion legitimate? So democracy has to wrestle with these tensions and one that I think is really important is spontaneity and structure, revolt and then ruling, right? So, we have to do them at the same time, somehow we have to be completely ungovernable while also seeking to govern.

JS: If we were to erase all of the pretenses and propaganda that are woven into the story of what America is, what the U.S. is, and we acted as though we were just aliens that landed here, how would you describe the form of government that we have in this country?

AT: Can I change your question a little bit?

JS: Go ahead.

AT: Let’s imagine that I was someone coming from ancient Greece, ancient Athens. So, a time traveler from 2500 years ago, and of course, the Athenians didn’t give us the practice of self-government or democracy, but they gave us this word that we come back to the demos, the people, hold kratos, or rule. So I think you can safely say that if an Athenian was plopped down in Washington, D.C. in 2019, they’d be like this is not democracy. Like, no way. Because they absolutely again, thought democracy was the rule of the poor. They compensated artisans and farmers to participate in the assembly, right, this idea that, you know, you couldn’t go vote because you have to work your job or you can’t keep a roof over your head would have struck them as crazy.

But more than that, they would have thought that our obsession with elections was just a sign that we were actually living in an aristocracy. Aristotle said very clearly, elections are aristocratic because who wins elections? Rich people, charismatic people, well-born people, right? I mean, look at who is actually in Washington today. The average Congressperson or senator is an aging white male millionaire. That is not who he’s ostensibly serving, right? And the Greeks totally knew. They were like, that’s the problem with elections so what we have to do is create all these strategies to encourage participation from every class, right, within their limited idea of what citizenship was. So, I mean, to me, that’s a helpful mental experiment. It’s like, they would have absolutely thought that we were out of our minds to think we’re living in a democracy. They would have seen that this is an oligarchy.

JS: In the book, you compare Donald Trump and historical figures. One of the most fascinating I thought was George Washington. Explain why you draw an analogy between Trump and George Washington.

AT: Think back to November 8, 2016 and everyone’s saying Donald Trump is not us. This is not who we are.

Hillary Clinton: You and I know Donald Trump is not who we are.

AT: And what was so fascinating for me, I was filming my documentary at that moment, and I spent the morning with North Carolina representative Mickey Michaux, who’s this 86-year-old guy in the state legislature who was recruited by Martin Luther King. I was spending the afternoon with a young Black Lives Matter organizer named Delaney Vandergrift, who’s 19.

Delaney Vandergrift: Democracy, it doesn’t feel like this in my head. It doesn’t feel like being scared for my life.

AT: They were like, this is who we are. And the best example of that to me is George Washington, the first president, who was this vicious real estate speculator who basically, why did he want the American Revolution? So, he could speculate on stolen indigenous land. So, let’s just not deceive ourselves. This is in fact who we are, look at our history, not tell ourselves this false story that the problems began three years ago.

JS: You’ve described the current GOP as being, and this is how you describe it, “tired of democracy and the equality that it demands.” I want you to explain that but at the same time, aren’t they continuing to win?

AT: I mean, this is the thing, this is what the left always says, right? Yes, they have money, but we have the many, right? But what I found when I went out with the film, and I started interviewing people and just talking to people from all walks of life is that young conservatives, people in their early 20s, I just assumed that as Republicans, they would still speak in terms of the link between capitalism and democracy, right? They would still say, “Hey, markets are democratic. We get to choose. Choosing is good. Choosing is what democracy is all about.” That’s not what I found at all. I found young people who are keenly aware of their own status as an economic and social elite, who recognize, they had no delusions, they recognize that the empowerment of the majority of people would mean that they would lose some of their privilege.

JS: I assume you’re not spending too much time watching Fox News, but Donald Trump Jr. was on Fox the other day because he has this book “Triggered” coming out. Donald Trump Jr. with no sense of irony or shame said in an interview about his forthcoming book on Fox News —

DJT Jr.: I wish my name was Hunter Biden. I could go abroad, make millions off of my father’s presidency. I’d be a really rich guy. It would be incredible.

JS: How they actually see the world is that they’re the hard workers. And they’ve had to step on a lot of skulls and do you know how hard it is to keep your balance when you’re stepping on the skulls of the poor? I mean, that’s essentially what Donald Trump Jr. was saying. And he’s using Joe Biden’s son as the example when in fact, the personification of his point is the Trump family.

AT: That’s amazing. I mean, this one woman says, a young woman says in the film, and I quote her in the book, “I don’t care about democracy. I care about the American dream and that ability to climb.” And whenever I hear that phrase, I think of — like your skull climbing — it doesn’t matter who I’m climbing over, doesn’t matter who I’m climbing on. I want to climb and be on top. I want a pyramid shape society where I’m on the top.

The one thing you said that I didn’t really respond to is, yeah, but it’s working, they have power. And this is where we do need to take a cold hard look at what we’re up against. I mean, one is just the intense accumulation of wealth, how much wealth is at their disposal. And I think we’re in an interesting moment where we’re seeing how people’s politics flow from their economic interest. I mean, look at Silicon Valley right now. I mean, in the Obama era, liberals could deceive themselves that these guys were forces for good and forces for change. And now we’re seeing the mask come off and people are going, oh my god, Mark Zuckerberg is not this boy genius. He’s actually ready when the shit hits the fan to align with the Trump administration, basically.

So they have economic power at their disposal, but the way our political system is structured makes it really difficult to enact the kinds of changes we want. We do have a system that is bizarrely minoritarian that does not weigh votes equally. It makes it all the more urgent that we build this mass power.

JS: You’ve also said that you don’t think you can persuade people through argument: “What brings people to Trump rallies in part is a desire for solidarity but they can imagine only an exclusionary solidarity, us against them. There are very few institutions that show them otherwise.” Explain what you’re talking about there.

AT: Yeah, solidarity is this beautiful concept. I mean, I really think solidarity is what will save us. So, what is solidarity? It’s people coming together and exercising power collectively to improve their conditions. I mean, why does the right-wing despise labor unions so much? Because that was not just a place where workers could come together and fight for higher wages or the weekend or benefits but also where they could have a political education and recognize their common interests and then maybe recognize their interest with people in other industries. And that’s really dangerous, which is why secondary strikes and boycotts are illegal in this country. So, solidarity I think is, I do think it’s something that it’s not just an intellectual epiphany. It’s something that you experience and that experience is transformative.

JS: In 2012, coming off the heels of the rise of the Occupy movement, you were working on a project called Rolling Jubilee. And that project raised enough money to eradicate close to $15 million in medical debt.

AT: Yeah, in the end, we raised over $33 million in different kinds of debt. So Rolling Jubilee is a project that came out of Occupy, sort of an Occupy Wall Street off-shoot. And what we wanted to do was to, I mean, challenge the phony morality around debt that had actually been part of the financial crisis because what was the Occupy chant? “Banks got bailed out. We got sold out.”

[Protesters chanting.]

AT: And so we’re like, look, what if scrappy occupiers come together and we bail out the people? So we also call it a People’s Bailout. So essentially, what we did was, we acted like debt collectors. This is something nobody had done before. We acted like debt collectors, but instead of buying debts to try to extract money from people to profit from other people’s pain, we abolish them. And we use the word abolish very specifically because we do not believe that debtors need to be forgiven. We believe the majority of our debts are illegitimate.

Nobody should go into debt because they get cancer or get sick. Nobody should go into debt because they want to get an education. I don’t think people should go into debt because they want to have a roof over their heads. And the majority of what people put on credit cards in this country—contrary to stereotypes—is food, shelter, basic necessities because people aren’t getting paid enough. We ended up buying a portfolio of debt from a predatory for profit college—tuition debt—and we were able to make contact with debtors. And that’s when we started to build something called the Debt Collective which had always been our dream, but we just thought that it was too out there.

The Debt Collective is a union for debtors. Just like we have a labor movement where workers come together to negotiate for better wages, etc, in the workplace. Why don’t we have something like that for debtors? What would have happened before 2008 if mortgage holders had been organized? Because what we know, looking back, the Obama administration sat on debt relief for millions and millions of regular people, right, whose homes went into foreclosure, who were financially devastated. Black families lost half of their wealth in the wake of the financial crisis.

What if debtors had been organized, mortgage holders had been organized? So we try to organize people around what type of debt by their specific creditors and say we need to engage in collective bargaining. We need to not be afraid to have strikes. And this in an age of financialization and an age of financial capitalism, why aren’t we organizing around indebtedness?

JS: Yeah, you’ve used the term economic disobedience.

AT: Yeah, I love that phrase. To me, I’m like, oh, what would it be like if we really were doing economic disobedience at scale? Because we always think about civil disobedience and we need that. We need to block the flows of traffic, and we need to fill up the squares and we need to sit in at Nancy Pelosi’s office. We believe that we should have campaigns of economic refusal. So, we launched the first ever student debt strike in 2015. It began really modestly with 15 people, grew to hundreds. Since 2015, we’ve helped win over a billion and a half dollars of debt relief.

JS: Let’s say I’m in some pretty steep debt from my education. I’m paying 1,300 dollars a month and only 40 of it is going to pay down my principal. What do you say to someone like that? How would you advise them if their fear is that these companies that control their debt or the government that controls your debt could ruin them financially if they don’t pay it or they go on strike?

AT: So, one thing we do is we do not ever advocate for financial suicide, right? There has to be a strategy and that strategy has to be political. It has to be legal. There has to be a public education media component so that we can get mass support. And we want people to take risks as tactically as possible.

So here’s what’s happening: a million student debtors, and I’m just talking about student debt. A million people default every year, but they do it individually and they do it awash in shame. So one thing we’re saying is, “Hey, million people who are defaulting step out of the shadows and become a political force.”

Then there are other ways that you can go on forbearance or income based repayment that can put you in a different point where maybe you can do other kinds of political organizing around the issue. There’s also the possibility of dispute. So, what we’ve done at the Debt Collective is create all of these debt dispute tools that can assist people who are already in default who are seeing their taxes and wages and Social Security being garnished dispute those garnishments. What’s fascinating about this is these are legal rights we have on the books, but the government’s made it so hard to enact them that only a handful — I’m talking eight people a year — dispute these injustices. But our app, which is you know, you can use it on a mobile phone —

JS: Did you say eight people a year?

AT: Yeah, like literally eight. But our app makes it so that it’s easy. It’s effortless, and we do the difficult work for you. So what we can do is flood the government with tens of thousands of disputes and this is the strategy we did with our debt strike where we found this little known aspect of the Higher Education Act called Defense to Repayment. If you are defrauded, you have the right to dispute your debt and get cancellation. But the government never wrote the rules and never made it clear how people could do it. So we built this app, again, a web-based tool and our dream, our aspiration was that 50 people, one person from each state, would submit. And we have since seen, I think, now it’s 200,000 Defense to Repayment submissions. And in fact, our app was so good that basically the Department of Education stole it, like took this thing a bunch of Occupiers had made and just put it on their website.

JS: Now, I know you were inspired in a lot of ways by the anti-corporate globalization movement. We’ve been through periods when there’s been a lot of organizing, a lot of hope, a lot of activism, and certainly Occupy represented that. But talk about this moment that we’re in where the climate strike, uprising in Chile, uprising in Lebanon, uprisings in Iraq. It seems like we’re at another one of those moments in history where there’s a lot of fires, and some of them are good fires.

AT: Yeah, I mean, and so that, I mean, I thought about the WTO protests when I was at those Trump rallies. It’s like, he’s able to step into this vacuum and rail against NAFTA.

DJT: We have begun formal renegotiation with Mexico and Canada on NAFTA.

AT: Because the Clinton administration not only passed NAFTA but then also could not hear the message of the global justice movement. And so, part of me is like, we’re in this amazing moment right now, let’s not be talking about it 20 years hence and going, “Wow, that was a really interesting opening. But those right-wing plutocrats, and their liberal allies squashed the moment.”

I think there are things about this moment that are scarier but also stronger. And I see that as, just like you’re saying that there’s a generation I think that seems to be more comfortable with an inside-outside strategy, right. And is willing to support candidates — I mean, part of it is that there are people running incredible campaigns, but candidates like Bernie Sanders and AOC and Ilhan Omar and all of these people we see at the local level who don’t get the media, right? Socialist judges in Houston, Texas —

JS: District attorneys.

AT:District attorneys, right, and saying, “Hey, actually, you know what, let’s not be afraid of taking power.” But I also think it’s really interesting how when you look at these global protests, how, again, it’s just like 2011, in a way, it’s like, they’re happening in radically different contexts. Some are happening against autocratic regimes, some are happening in electoral democracies, but basically, people’s complaints are pretty universal. It’s like corruption, massive inequality, the lack of workers rights, a lack of concern for the environment, just a lack of basic dignity. To go back to democracy. This is the motor of democracy. This is what, democracy is not just procedures and elections, it is this moment where people come together as a politicized philosophical public and are like what kind of world do we want to live in?

JS: Astra Taylor, thank you very much for joining us.

AT: Hey, thanks for having me.

JS:Astra Taylor is political organizer, author, and filmmaker. Her latest book is “Democracy May Not Exist, but We’ll Miss It When It’s Gone.” For more on the Debt Collective and how you can dispute and fight your debt, check out DebtCollective.org.

[Music interlude.]

Keeanga-Yamahtta Taylor on New Book “Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership”

Interviewee: The cry in the streets was burn baby, burn.

Reporter: Why would you burn out this kind of place?

Interviewee: We decided to burn this store because we felt that this man had been doing nothing, but gaming on us anyway.

JS: From Detroit to Watts, rebellions ignited in cities across the country in the late 1960s. New Deal era programs had provided housing for middle and lower-middle class whites in the suburbs, while pushing African Americans into slums. Decades of poor housing conditions, including rat-infested overcrowded dwellings at high prices became among the primary reasons that African Americans began resisting, what the media often called rioting.

In response, President Lyndon B. Johnson passed the Housing and Urban Development Act of 1968 to expand Black homeownership and end discriminatory real estate practices.

Lyndon B. Johnson: The only genuine long-range solution for what has happened lies in an attack mounted at every level upon the conditions that breed despair and breed violence.

JS: Dr. Keeanga-Yamahtta Taylor writes, “The low-income homeownership programs, the first of their kind, utilized federal subsidies, long amortization periods, and mortgage insurance guarantees to entice the participation of the real estate industry while also making homeownership affordable and accessible to poor and working-class African Americans.”

But, this public-private partnership to produce new low-income housing was set and managed by the very industry that had long profited off of racial segregation.

Keeanga-Yamahtta Taylor examines these practices in a new book out called, “Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership.” Keeanga-Yamahtta Taylor joins me now to discuss how the housing crisis today is rooted in the exploitative policies of yesterday.

Keeanga, welcome back to Intercepted.

Keeanga-Yamahtta Taylor:Glad to be here. Thanks for inviting me, Jeremy.

JS: Let’s just start from the point of homeowner expansion efforts after World War II and the impact that they’ve had. You write in the book “The efforts to push further into the ranks of the working class and to pull greater numbers into the ranks of homeownership drove the FHA [Federal Housing Administration] toward innovations in financing, except of course, for African Americans.” Explain this.

KYT: As a way to try to both deal with a crisis of foreclosure that develops during the depression—by 1936 half of all mortgages are in foreclosure—the federal government sees the promotion of single family homeownership as an economic stimulus. But also there’s an important opportunity to try to change the federal government’s relationship to mortgage financing, and banking that’s necessary in this moment to stop the cascade of foreclosures.

Announcer: This tidal wave of new construction is an important contribution to the economic rebuilding of America. Homeownership is the basis of a happy and contented family life. And now through the use of a National Housing Act insured mortgage is brought within the reach of all citizens on a monthly payment plan no greater than rent.

KYT: The programs that are created in the 1930s are really operational based on two important factors. One is that the properties that the federal government will now insure, those properties need to be new, and they need to be in what the federal insurers described as racially homogenous areas. What it means is that for white suburbanites, housing will be protected by the federal government. So, what the federal government does is say, if you lend to these people, and for whatever reason the mortgages go into foreclosure or default, we will pay them off.

JS: You write in the book about “how the U.S. housing industry sought to exploit and financially benefit from public perceptions of racial difference.” And you also use the term “predatory inclusion” to describe how the real estate industry conducted business in the urban housing market. Walk us through both of those concepts.

KYT: The Fair Housing Act is passed in 1968, which brings an official into the federal government’s involvement in redlining. Part of the way that black people are then accepted or included into these new practices is to do so in a very contingent way which is to say that, yes, we will stop redlining but, we need to be cautious about this new group of consumers. And they use the condition of black housing which black people moving into cities have really been relegated to a housing market that is much older, that is in poorer condition, are the result of decades of disinvestment. They were the result of decades of redlining practices that have deteriorated the housing stock. And so because of this, it allows for black potential buyers to be treated cautiously, to be described as risky.

So big depository banks won’t directly do business in these urban areas. They create subsidiary mortgage bankers, unregulated entities whose business practice is really about volume sales and mortgages. They make their money on each loan that is secured and then they make money on the backend in closing costs. That’s just one aspect of the way that predatory inclusion works. I think we can generally think of it as a way of including African Americans and institutions and practices from which they have formerly been excluded because there are new ways to extract from them. There are new ways to financially exploit them.

JS: You write about the “lack of an actual free market in housing that created a captive market in which African Americans had to pay exorbitant costs for inferior housing.” How did that play out?

KYT: The captured market means that literally African Americans had to buy and rent in specific neighborhoods because of segregation. Segregation is not just about whether white people want black neighbors, segregation in the early 20th century, and certainly throughout the mid-century, is something that is rigorously enforced through a combination of white violence, of public policy, and of the private actions of the real estate and banking industries. And that these all come together to really bind black people into certain spaces in a given locality. When black people are moving during the Great Migration—during the decade of the 1920s—800,000 African Americans relocated to Chicago. One of the things that was done infamously was that landlords in Chicago would take apartments that were intended for one family and re-divide them multiple times, so that now it’s not housing for just one family but four families.

In a city like Baltimore, into the late 1940s and 1950s, landlords would take out the bathroom in single residence occupancies—so, SROs—they would remove the bathroom and create another room to rent. And after they’ve removed all the bathrooms, they went and dug trenches in the backs of these buildings and these latrines became the bathrooms for for those residences. And they can get away with this because black people are a captured market, meaning that they can’t just go to a different neighborhood to move somewhere else. They have to stay in that neighborhood and why do they have to stay in that neighborhood? Well, in Chicago during the 1920s it was not uncommon for white homeowners to bomb the homes of black people who dare to move out of what was called the Black Belt.

Frank Brown When I leave Trumbull Park, only part of me leaves. Actually I’m still out there worrying about my wife worrying about my daughters. I can’t work. I can’t think. I can’t do anything. I don’t even eat wondering if the mob has gotten them, as they promise to do.

Elizabeth Wood: The Negro families in Trumbull Park have lived in a state of fear and isolation, subject to constant harassment.

KYT: And so that’s what I mean, segregation is rigorously enforced. We’re all led to believe that the marketplace is a colorblind neutral space where supply and demand are the only rules that the market adheres to. And so, part of what I’m trying to argue in this book is that no, the market is us. We are the market and so the market in that sense is socially constructed. And it reflects what we as a society deem to be valuable and it also reflects what we as a society, consider to be un-valuable or lacking in value. And that inevitably draws on notions of race in this society. And in many ways, we can see the way that the real estate and banking industries have helped to construct our ideas about race in this country. So much so that the gap between black housing values consistently continue to be valued as less than homes owned by white people, or in white majority neighborhoods, and that’s not a fact of nature. That is a fact that points to the persistence of racism and racial discrimination in our society and the continued devaluation of black life, of black neighborhoods, of black people.

JS: In fact, you write about how this political economy emerged from the captive African American market and you cite the social theorists from Cornell University, Noliwe Rooks. Talking about segrenomics. What is segrenomics?

KYT: Segrenomics is really a way of pointing out the way that segregation generates its own economy. So much so that segregation becomes profitable. This is not just about I don’t want to be around black people. I don’t want black neighbors. There is obviously an element of that, which is important. But the overriding issue, in my opinion, is the way that the real estate industry finds ways to profit from race, finds ways to profit from the practice of segregation, whether it is charging black people more for substandard and in some cases, completely inferior housing. And that certainly carries over into the development of this new urban housing market that is essentially brought to life by the Housing and Urban Development Act.

JS: President Johnson signed that HUD Act in 1968 that you’re talking about, and he said the following: “Today we’re going to put on the books of American law what I genuinely believe is the most farsighted, the most comprehensive, the most massive housing program in all of American history.”

KYT: Right, so at the heart of the HUD Act is a congressional mandate to produce 26 million units of housing within 10 years. Six million of those units are supposed to be rehabilitated housing meaning it’s used, it already exists. And so there’s an immediate tension over where this housing is going to go. For new housing, the point is to be able to maximize federal dollars to get as much bang for your buck as possible. So building new housing in cities doesn’t make any sense. It’s cheaper to build in the suburbs. There’s more land which makes it cheaper. The taxes are lower. So most of the new housing with the program begins to be built in suburbs. And the rehabilitated housing is focused on housing that already exists in cities.

So, the real estate industry is almost single handedly in charge of this program. And so what do they do? They steer white people to new suburban housing in this low-income homeownership program. And they steer black people to the existing market in the city. And so, part of the motivation around this, as it has always been, was to keep property value stable by keeping black people in cities and white people in suburbs. So even in the earlier iterations of this program, it was always contingent on containing African Americans. So yes, you can be homeowners now because this is an interesting new market development. But you can only be homeowners in areas that were formerly redlined. You can only be homeowners in segregated parts of the city. We do not want to introduce black people into white suburbs.

JS: We’ve been talking about 30s, 40s, 50s, 60s. And then you have Richard Nixon comes into power and by 1973, Nixon declares a moratorium on subsidized housing. How did HUD transform under Nixon?

KYT: In ’68, Nixon runs against Johnson’s welfare state. He runs against the Great Society. Nixon’s coalition has been the so-called silent majority. Part of how Nixon holds this political coalition together is to essentially guarantee that their neighborhoods can stay white, except this is in the post civil rights, new colorblind era. And so he does this by saying that, you know, we will ruthlessly punish explicit acts of racial discrimination, but we won’t allow for economic integration.

Of course, at this particular point in time and still today, African Americans are over-represented in the ranks of the poor to say that you will have economic segregation and that that’s OK is to essentially say that you will be keeping black people out. I mean, there’s several kind of factors that create leverage for the Nixon administration to not only get away with issuing a moratorium on the funding for all subsidized housing, but to really reorder the relationship between the federal government and its obligation to provide housing for poor and working class people.

Richard Nixon: In the 1960s, federal programs for the cities grew bigger and bigger, but the problems of the city’s only grew worse. Government spending increased at a record pace, but so did crime and pollution and inflation and unrest. That is why in addressing our urban needs, I have insisted that we concentrate not nearly merely on how much we spend, but on how we spend it.

KYT: And so part of that involves the Nixon administration harnessing the crisis in the scandals in the HUD FHA programs to an argument that this both shows that these program participants, which were a disproportionate number of black women on welfare in the existing urban-based part of this program are undeserving, are ill-equipped, are unsophisticated and can’t handle the rigors of homeownership. These are all of the things that are said about them. So nothing about the corruption, fraudulent practices, and the ways that these women were targeted in hopes that they would go into foreclosure or fail. This also became evidence of why government programs don’t work.

So, the HUD homeownership program was portrayed as a bizarre endeavor in social engineering, in that it was proof of the problems of so-called big government. And it also happened to coincide with the end of the long postwar economic boom. The deepest recession since the depression has began to set in. Nixon very skillfully taps into the racial resentment of white people in the idea that black people are getting something for nothing that Johnson has created this welfare state that is for African Americans, and you’re paying for it. And so they were very adept at actually turning this program into a referendum on whether the federal government should be invested in transforming low income black renters into low income black homeowners.

And of course, the white public was very open and sympathetic to this idea of black domestic dysfunction undermining yet another social program. And this is how their own experiences of having fled the cities was narrated to them. That was an easy story to tell as a justification then for undoing the federal government’s pledge in 1949 to provide decent housing for all Americans.

JS: How would you characterize these issues that you studied academically over these decades right now today under Trump with Ben Carson at the helm at HUD?

KYT: The reason why we continue to see the same kinds of problems whether it’s residential segregation, whether it is the hostility of mortgage lenders, these kinds of predatory preying on black people is not an industry stuck in its ways. It’s not just an inability to move ahead. It’s because these practices have proven themselves to be profitable over and over again, that this is essentially housing under capitalism.

Trump always stands out as the boorish caricature of the worst in politics. And the impulse is to say, “well, we should just get things back to normal.” Whether it’s the Obama administration or even the Bush administration that preceded that, or Clinton, all of them have had their own kinds of housing crises within their own administrations. The reason for this is because of the U.S. government’s continued reliance on the private sector to produce housing for low-income and working class people. And affordable housing for working class people and housing for poor people is not profitable. That’s why it never gets built in sufficient numbers to actually satisfy the need. And so, this is why we continue to see the same iterations of the same problems just in different places in different times. But it’s really the same discussion that we’re continuing to have and that is the destructive role of the private sector when it comes to actually satisfying the housing needs of poor and working class people in this country.

JS: On that note, I want to thank you, Keeanga-Yamahtta Taylor for joining us on Intercepted.

KYT: Thank you so much, Jeremy

JS:Keeanga-Yamahtta Taylor is an assistant professor of African American Studies at Princeton University. Author of the new book “Race for Profit, How Banks and the Real Estate Industry Undermined Black Homeownership.” Find Keeanga on Twitter @KeeangaYamahtta

[Music interlude.]

JS: And that does it for this week’s show. I just wanted to draw your attention, on theintercept.com. My colleague Matthew Cole and I discuss the latest revelations about Erik Prince and his role in the Trump campaign and Trump transition, as well as a wacky plan, where the White House apparently has been encouraging Erik Prince to buy an aerospace company that’s based in Ukraine to try to keep it out of the hands of the Chinese government. You can check that out at theintercept.com.

You can follow us on Twitter. We are @intercepted. We’re also on Instagram now @interceptedpodcast. If you like what we do on this program, you can support the show by going to theintercept.com/join to become a sustaining member. Intercepted is a production of First Look Media and The Intercept. Our lead producer is Jack D’Isidoro. Our producer is Laura Flynn. Elise Swain is our associate producer and graphic designer. Betsy Reed is editor in chief of The Intercept. Rick Kwan mixed the show. Transcription for this program is done by Nuria Marquez Martinez. Our music, as always, was composed by DJ Spooky. Until next week, I’m Jeremy Scahill.