Up until 1973, the precise year the Rockefeller drug laws were passed, the difference between black and white median income had been closing. But then that year it changed course, and in “an ominous bellwether… the gap between black and white incomes started to grow wider again, in both absolute and relative terms.” Direct empirical research into incarceration’s economic effects weren’t done until recently, when a Pew Charitable Trusts research paper showed that prior to imprisonment two-thirds of male inmates were employed and half were their family’s primary source of income. Additionally, upon release an ex-con’s annual earnings were reduced by 40%

In the nearly forty years since America’s modern drug laws were passed, there has been a massive increase in economic inequality by any measure. In the early 1970’s not only did the income gap between black and white begin to widen again, it also becomes much more top-heavily favored to the very rich – who happen to be almost exclusively white as well.

With home equity making up 44% of an average American’s family’s net worth and fully 60% among our middle class,³¹ the statistics around homeownernship further delineate the racial schisms of American wealth. Not only do blacks pay higher interest rates, have higher downpayments, have less access to credit, get turned down more frequently for loans no matter what’s controlled for, and pay what amounts to an 18% “segregation tax” because homes in black neighborhoods have much less equity than homes in white neighborhoods³² – but since 1970 black homes have appreciated in value roughly half as much as white homes.

Even Eminem seemed to have little sense of the irony that was invoked as his self-consciously white autobiographical film, 8 Mile, highlighted the hopeless plight of Detroit’s urban black community that’s existed for generations. The 8 Mile district was created in 1941, when a six-foot wall was built around a black enclave that was deemed unfit to accept loans from the Federal Housing Administration. This was “part of a system that divided the whole city, in theory by credit-rating, in practice by colour.” And so the segregation that emerged in Detroit “was not accidental, but a direct consequence of government policy.”

This policy of segregated mortgages became known as “red-lining,” and by the 1950s one in five black borrowers was paying interest at over 8%, while it was about impossible to find a white family paying more than 7%.

And yet this economic line extends far past that generation. The fact that blacks are foreclosing at a much higher rate than whites in the current crisis was predestined by the conditions of the loans they received, as banks turn down equally-qualified blacks much more often than whites, and forced blacks to pay higher interest on their loans. Housing values are indelibly color-coded, as the average value of a white house appreciates much quicker than a black house. All of this is snowballing into a collective institutional bias that cost black families at least $82 billion even before this current crisis began.

Hotlanta served as a case study for mortgage-based racism, as the Pulitzer-winning series in the Atlanta Journal and Constitution “The Color of Money” so aptly captured.

It showed how blacks were routinely rejected for loans which whites in a comparable economic situation were accepted for. And this phenomenon wasn’t isolated to one city, as a 1991 study showed that out of 6.4 million mortgage applications nationwide, even after income was controlled for – blacks were rejected twice as often as their white counterparts. However that wasn’t the worst of it, in urban centers such as Boston, Philly, Chicago, Minneapolis, blacks were rejected three-times more often than whites.

Even well-to-do blacks have been unable to escape from this institutional prejudice.

Wealthy black neighborhoods in the DC suburbs have a much tougher time getting loans than low-income white areas, and in Boston blacks living on the exact same street as their white neighbors and earning similar incomes found it much tougher to get a mortgage than their white neighbors. Joe Kennedy summed up the cumulative effect of this racial injustice well, describing “an America where credit is a privilege of race and wealth, not a function of ability to pay back a loan.”

The city of Baltimore partly captures how higher-rate loans to blacks have affected foreclosure rates, with several Wells Fargo loan officers testifying that they targeted “mud people” for “ghetto loans,” resulting in 71% of foreclosures in that city being made on black homes in recent years. And so, even when income and credit score are controlled for, across the nation blacks are more than three-times more likely than whites to have their home foreclosed and be thrown out into the streets.