Nowtopian

Easterly view over Parcel E of the former Hunters Point shipyards, probably the most radioactive and toxic site in any city in the U.S.

I’ve been following the State of California’s slow-moving effort to determine whether or not it should take responsibility for providing reparations for African Americans for historic crimes and systematic racism. The official body in charge of this process is already furiously pedaling backwards as the right-wing echo chamber amplifies false exaggerations that every black Californian is going to be eligible for a $1.2 million payout from the state. If only!

I support paying reparations to folks whose ancestors were held in slavery. I also support paying reparations to people whose families have persisted through a further century of Jim Crow racism, redlining and restrictive covenants, systematic disinvestment, and myriad forms of exploitation both obvious and subtle. California has a deeply racist history that is sometimes overlooked in the present era of self-congratulatory “Blue State” liberal hegemony. If not overlooked, the deep structural and social racism that shapes life in California to this day is downplayed in favor of the Obama-ish invocation of progress and earnest intentions to do better. But any unblinkered examination of California’s history, including the Bay Area and certainly including San Francisco itself, quickly comes face to face with legacies of blatant racism that clearly still influence much of our daily lives.

A while ago I read Eugenic Nation: Faults & Frontiers of Better Breeding in Modern America, by Alexandra Minna Stern (University of California, 2nd edition, 2016), which is an excellent survey of how deeply eugenicist politics influenced assumptions underlying public health, national borders and immigration, education, and more. How many people know that at the 1915 Panama-Pacific International Exposition in San Francisco an organization called the “Race Betterment Association” had a prominent booth, and held a convention that brought to San Francisco prominent racist and eugenicist figures from around the state? Or that the ideas of “race betterment” that were honed by this association and a couple of others were embraced by the Nazi government in Germany by 1934, where they were partly inspired by official California sterilization policies to begin their own racial purity campaigns?

Protesters in 2013 in Richmond march on Chevron, pointing out the obvious: you can’t eat money!

The progressive Bay Area is very proud of its incredible history of environmental resistance to the depredations of untrammeled modernism and the imperatives of speculative capital. But few realize that the men who launched the Save the Redwoods League at the beginning of the 20th century were prominent eugenicists. As Stern argues, “Saving the redwoods meant more than just protecting a tree; it was a metaphor for defending race purity and ensuring the survival of white America … Nonetheless, the alliance between eugenic racism and environmentalism, which seemed quite natural to the founders of both movements, continues to flicker on and off in the twenty-first century in the xenophobic platforms endorsed by the population section of the Sierra Club, and sometimes in the rhetoric employed to campaign for greenbelts, no- or slow-growth polices, and strict zoning codes.” (p. 148, 151)

Eugenics was widely discredited by the holocaust and Nazi concentration camps, but its ideas had by then been “naturalized into federal, state, and even municipal institutions and were underpinning postwar norms of conformity.” (p. 177) It wasn’t until the 1940s that anti-miscegenation laws were repealed in California, but by then an entire generation of Filipino men, to cite one example, had lived without the ability to bring over spouses or families from the Philippines, nor were they officially allowed to marry women of other races. Sundown towns were known throughout California—San Leandro for example enforced its border with Oakland quite vigorously well into the late 20th century.

In another book I read a couple of weeks ago, The Bonds of Inequality: Debt and the Making of the American City, Destin Jenkins brilliantly dissects the profoundly racist operation of the municipal bond market in San Francisco dating back to the immediate post-WWII period. Bond merchants and banks, where their obscure offices were tucked, had been thoroughly exposed as incompetent and (often) corrupt by the Great Depression. New Deal banking reforms, ironically, gave those very same bond sellers and banks a new lease on life by giving them control of a strategically vital lever of power in any urban area: the spigot of capital for infrastructure investment. Determined to resuscitate and “save” capitalism, New Deal banking reforms didn’t just overcome the Depression (albeit with a big boost from military spending during WWII that continued ever since). As Jenkins convincingly argues, “For near thirty years, federal guarantees for bondholders did more than provide commercial banks with liquidity, profits, and dividends for shareholders: the federal government helped unlock banker prosperity.” (p. 191)

By the 1970s, rising inflation and unemployment as deindustrialization swept away large parts of U.S. manufacturing led to the fiscal crisis of the state. Municipal bond markets by then had sustained decades of tax-dodging profitability. The bond market is a system where the wealthy could purchase federally tax-exempt bonds (and avoid paying the prevailing high tax rates), while enjoying rigid guarantees that their investments and the interest they charged municipalities (as the price for providing funds for schools, parks, sewage and water systems, roads and freeways, etc.), would be paid back ahead of all other priorities in city finances. Our contemporary crisis of crumbling infrastructure can be traced directly to this self-defeating arrangement of depending on the rich for debt financing, rather than a robust system of taxation that would actually be subject to some version of democratic controls. As Jenkins says, “It was in the crucible of high interest rates and dependence on lenders that the deterioration of urban infrastructure accelerated.”

More importantly, Jenkins has framed his exposé in terms of the underlying racism that shaped San Francisco and U.S. cities more broadly.

During a moment of historically low interest rates [in the 1940s and 50s], black neighborhoods were continuously deemed unworthy of debt. The twenty-year moment when money was cheap is marked by what I call the infrastructural investment in whiteness. (p. 15) … Infrastructure was … not only a means of achieving economic growth by accommodating the white consumer, tourist, and executive; it also symbolized an investment in middle-class whiteness per se. From public parks and museums to roads and parking garages, infrastructure was an expression of white rights, of the expectation of an expansive public. Offering a San Francisco twist to the Keynesian city, streets, parks, and museums were repurposed in service of “state-backed, debt-financed consumption.” Just as federally guaranteed mortgages propelled white middle-class suburbanization, municipal debt made possible the well-paved streets, downtown parking garages, new sports arenas, and rehabilitated art spaces for the white middle- and upper-class urbanite. White construction workers in segregated building trades enjoyed the spoils by literally building the consumer playground and upgrading crumbling cultural landmarks. (p. 69-70) … San Francisco’s infrastructural investment in middle-class whiteness was grounded in its working-class companion, the segregated building trades… In San Francisco during the 1950s and early 1960s, skilled construction jobs were for white men, and the city’s building trade unions worked to keep it that way. (p. 79)

When the U.S. Supreme Court outlawed racially restrictive covenants on neighborhood residency in 1948, for the first time middle-class residents of Chinese and Japanese descent began moving into the Sunset and the Richmond districts. Black families who could afford to were able to buy properties in the Outer Mission/Ingleside area in the southwest. And public housing projects under the management of the San Francisco Housing Authority (SFHA) was required to desegregate too; finally the previously all-white Valencia Gardens at Valencia and 15th opened up to Latinos, Asians and African Americans. This story is somewhat well known, at least to those who have looked into it. Less well understood is that the SF Housing Authority depended on its own version of municipal bonds to operate public housing projects. By 1958 the SFHA had become the City’s largest landlord with 4250 units in fourteen permanent projects. Jenkins is at his best in explaining what this relationship meant for the evolution of public housing here:

Through debt, the San Francisco Housing Authority came to house poor residents while providing safe investment outlets for bondholders. (p. 109) By locating public housing in redlined areas and issuing tax-exempt, federally guaranteed debt, the SFHA inadvertently monetized the city’s most devalued lands in new ways. Suddenly, redlined neighborhoods, once defined by racial threats, slum dwellings, and “unpleasant odors” from nearby stockyards and packing plants, were outlets for institutional capital. (p. 95) … Rather than fund the construction, upkeep, maintenance, and beautification of crumbling housing projects, bankers used the absence of interest rate restrictions on short-term public-housing debt to capture income. While public housing authorities were bled dry, Bank of America increased its holdings of Public Housing Authority notes from $165 to $270 million between December 31, 1964 and September 15, 1965. (p. 99) [emphasis added] … The debtor-creditor arrangement did more for the institutional capital than for the tenants who lived in the housing it funded… What made the public-housing arrangement unique was that the layers of guarantees, protections, and hierarchy of claims betrayed in a most glaring way the divergent interests of borrowers and bondmen, tenants and creditors. In a sense, the program became a laboratory for the profitability of poverty and how short-term debt could mollify the cost-profit squeeze of bondmen. (p. 100) … The deterioration of public-housing projects was taken as proof of the failures of socially oriented public policies rather than as a consequence of a structural arrangement that, from the beginning, privileged the claims of bondholders. (p. 109) While maintenance costs [at SFHA projects] rose around 13 percent between 1963 and 1966, rental income rose just 3 percent. The “wanton destruction of buildings” necessitated hiring glaziers to recut and replace broken windows. The SFHA blamed window breakers without entertaining how inflation, dependence on an extractive market, and the prioritization of lenders over tenants also contributed to escalating maintenance costs. (p. 122)

There is a great deal more in Jenkins’ excellent book. He shows how the infamous “structural adjustment” that was imposed on Third World countries like Mexico and Nigeria in the wake of the debt crisis created by profligate lending of recycled petro-dollars (after the 1973-74 “oil crisis”) got its first use on municipalities in the U.S.

Put simply, structural adjustment emerged out of the contingencies of municipal debt and entailed cuts for ordinary people and guaranteed rents and protections for bondholders. In addition, municipal borrowers truncated long-term political horizons. Paying the next bill took precedence over addressing the social crisis of austerity. (p. 218)

Civil rights protesters at Turk and Fillmore Streets, 1963.

Police officers threaten protesters during Hunters Point Uprising, September 1966.

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