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  • [narrator] Just over 150 years ago, this was money

  • for almost half of America.

  • On multiple bills were people picking cotton.

  • Enslaved people.

  • These slaves didn't just represent wealth in America.

  • They were wealth.

  • By 1863, they were worth over $3 billion.

  • Since then, America has slowly, painfully, transformed as a country,

  • breaking down racial barrier...

  • after racial barrier.

  • [Martin Luther King Jr.] I am very optimistic about the future.

  • Frankly, I have seen certain changes in the United States that surprise me.

  • So on the basis of this,

  • I think we may be able to get a Negro president in less than 40 years.

  • I would think in 25 years or less.

  • [narrator] Wealth is different.

  • Wealth is where past injustices breed present suffering.

  • I think the racial wealth gap speaks to the fact

  • that we still have a long way to go

  • to achieve ideals of equality in this country.

  • The racial wealth gap is a measure

  • of the white family and the African-American family

  • that's right smack-dab in the middle, the median.

  • [narrator] The median white household's wealth:

  • their savings, assets, minus their debts,

  • is $171,000.

  • The median black household's is $17,600.

  • And that gap is still growing...

  • and growing.

  • Why?

  • [Martin Luther King Jr.] We hold these truths to be self-evident...

  • We have the right to go to any school in America, but we can't pay the tuition.

  • I wake up every morning in a house that was built by slaves.

  • The American dream need not forever be deferred.

  • [Martin Luther King Jr.] ...that all men are created equal.

  • [Malcom X] If they can't have their equal share in the house,

  • they'll burn it down.

  • I picked the cotton... and I built the railroads

  • under someone else's whip...

  • for nothing.

  • For nothing.

  • [narrator] In January, 1865,

  • the Civil War was ending.

  • Union general William Sherman and Secretary of War Edwin Stanton

  • gathered a group of 20 black leaders

  • and asked them what the black community needed

  • to build lives in freedom.

  • Reverend Garrison Frazier, the leader of the group,

  • answered simply.

  • "The way we can best take care of ourselves

  • is to have land."

  • Four days after the meeting,

  • Sherman issued Special Field Order No. 15.

  • It set aside hundreds of thousands of acres of land,

  • saying, "Each family shall have a plot

  • of not more than 40 acres of tillable ground."

  • The day before his second inauguration,

  • Lincoln signed a bill that made the plan official.

  • America was almost a very different country.

  • [upbeat music playing]

  • But it didn't turn out that way.

  • Weeks later, Lincoln was dead.

  • His successor, Andrew Johnson, quickly reversed course.

  • Immediately once we say, "Okay, equal rights"

  • then you have a white backlash that says, "What about our rights?"

  • [narrator] By the end of that year,

  • thousands of freed slaves who had received land were evicted.

  • In just a year after slavery,

  • President Johnson complained about discrimination...

  • against whites.

  • Quote: "In favor of the negro."

  • But slaves had been creating wealth for their owners for 246 years.

  • That wealth, whites got to keep.

  • And there's an amazing thing about wealth that people who have it know well:

  • it grows,

  • across generations. Just ask Jay-Z.

  • [Jay-Z] ♪ I bought some artwork for one million

  • Two years later that shit worth two million

  • Few years later, that shit worth eight million ♪

  • "I can't wait to give this shit to my children."

  • One thing it says is that wealth begets wealth.

  • Turn one million into eight,

  • raise your hand if you wanna take that deal.

  • [narrator] It doesn't take a risky, Picasso-sized bet

  • to see wealth grow dramatically.

  • It just takes time.

  • If you live in a stable country and can invest long-term,

  • values generally go up.

  • That's why you need to know about compounding interest.

  • Imagine you took $100 and invested it in 1863.

  • The average annual inflation-adjusted return

  • in the US stock market has been around 7%.

  • The next year, it's worth a bit more...

  • and a bit more, and a bit more.

  • Today, that $100 would be worth more than $3.5 million.

  • To this day, African-Americans make a lot less money than whites.

  • They're far more likely to be unemployed,

  • and studies show employers still discriminate.

  • But even if we managed to close those gaps right now,

  • centuries of inequality have already compounded,

  • most powerfully through land and housing.

  • Usually, in this century, any wealth that's captured is through property.

  • [narrator] For the American middle class,

  • home equity accounts for around two-thirds of wealth.

  • So if you're a white American,

  • you're likely to have parents or grandparents with a story like this.

  • [woman] My parents bought a house

  • probably now 50 years ago, paid $14,000 for it then,

  • and it is worth now probably about $600,000 to $700,000.

  • [Cory Booker] Most people don't understand the power of housing,

  • of where you live,

  • of what opportunities exist in that community.

  • [narrator] The government played a huge role in making that happen.

  • During the Great Depression,

  • almost half of all city homeowners were in default.

  • [male announcer] The men are sitting in the parks all day long,

  • out of work, muttering to themselves.

  • [narrator] Franklin Delano Roosevelt took action with the New Deal.

  • ...by providing for the easing of the burden of debt.

  • So the New Deal unleashes mortgage credit to the population.

  • [narrator] The American dream and owning a home became synonymous.

  • But the new Federal Housing Administration

  • wouldn't insure mortgages in areas it decided were too risky.

  • And the way that risk is calculated is by race.

  • A black family moving in was seen as a threat to housing prices.

  • [interviewer] Do you think a Negro family moving here

  • will affect the community as a whole?

  • I think that the property values will immediately go down

  • if they're allowed to move in here in any number.

  • [narrator] So when the FHA drew maps of where they wouldn't insure loans,

  • the neighborhoods with more black families were colored in red.

  • [Cory Booker] Redlining is not a figurative metaphor.

  • You would literally see maps drawn

  • where entire neighborhoods were redlined off.

  • [narrator] The effects of racism became a justification for more racism.

  • [man] If two-thirds of America's middle-class wealth

  • is in the form of home ownership,

  • that opportunity to own a home has now just been excluded.

  • [narrator] Federally enforced segregation affected every part of life:

  • the jobs you could access, where your children went to school,

  • how safe they were,

  • and whether your home increased in value.

  • [all] ♪ Keep your eyes on the prize... ♪

  • [narrator] It wasn't until 1968 that housing discrimination was outlawed.

  • [Lyndon B. Johnson] Fair housing for all human beings

  • is now a part of the American way of life.

  • [narrator] But that didn't mean housing discrimination ended.

  • Consider what it took

  • for Cory Booker's family to get their house in 1969.

  • My parents began looking for homes, but finding just odd things happening,

  • where real estate agents, if they saw them beforehand,

  • they would only show them homes in African-American communities.

  • If it was a house in a white neighborhood,

  • my parents would be told, "This house is already sold."

  • [narrator] Booker's parents set up a sting operation

  • with a civil rights group.

  • The next time they were turned away,

  • a white couple arrived and made an offer on their behalf.

  • [Cory Booker] The bid was accepted, and on the day of the closing,

  • the white couple did not show up. My father did, and the lawyer,

  • and the real estate agent was so angry,

  • stands up, and punches my dad's lawyer.

  • Literally they're fighting, scrambling,

  • and there was a dog in the corner, and he sicced the dog on my father.

  • So my father's now trying to fight off a big dog, a window was smashed,

  • but eventually things settled, and the real estate agent was desperate,

  • and started begging my father: "You don't wanna move here,

  • your people are not here."

  • He was so afraid that one black family would move in,

  • and somehow it would destroy his business and drive down real estate rates.

  • [narrator] Cory Booker and his parents ended up getting that house

  • and that house helped build his future.