re: Thoughts on redline neighborhoods?

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John McKnight coined the term "redlining" to describe the discriminatory practice of fencing off areas where banks would avoid investments based on community demographics

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well how has all that investment turned out this week?

No need for a conversation because everyone already knows what redlining is.

Redlining

There might be evidence that individual banks "redlined" based on race but it really has nothing to do with racism. It has to do with money and people that don't understand that also don't understand banking.

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It has to do with money and people that don't understand that also don't understand banking.

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See that is why I brought up the question. I was wondering if it was more people in the neighborhood had poor credit and couldn't get a loan or if it was race based.

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A few years ago it was a thing

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By a few years ago, you mean the 40s and 50s? And in big cities like chicago (not predominant business practice across the country)

It hasn't been a thing for a long long time

What were the default rates for those redlined neighborhoods?

Banks aren’t in the business of losing money, the only color they care about is green. You think they would intentionally avoid making money on a mass scale because of race?

Redlining is a cause and effect relationship. Redlining is a lack of some of many types of services, like mortgages, grocery stores, or health care, in the area. But why are those not in the area?

Let’s see: banks see those low income, poverty stricken, high crime areas as a poor investment with a low capability to return their investment and profits. A bank is a private business, and they should be able to choose not to make a poor investment choice.

Grocery stores don’t do well in those areas bc people of low income generally do not buy fresh foods and cook, so a large amount of inventory becomes a cost, not a profit tool. There’s also higher rates of petty theft, so stores lose even more money than normal. Not a good investment, so private business can choose not to be there.

And finally healthcare. Seems less obvious, but consider poor people are less likely to have health insurance, and more likely to have poor credit. These people are less likely to use healthcare, and if they do they are less likely to pay for the services provided to them. They are also less educated, so they are more likely to use healthcare services incorrectly, like going to the emergency room for non-emergencies, or calling an ambulance bc they don’t have transportation to a doctor. Low income people are also more likely to be drug abusers and to try to solicit drugs from doctors and hospitals, which puts doctors in an ethical dilemma that they will want to avoid. Most healthcare is also private, so they should be able to choose not to make a poor investment

Edit: redlining still exists in effect today. NBR is without a lot of banking services, grocery stores, and healthcare. And I can guarantee the reasons above and why that’s the case. It’s not a race thing. It’s a profit thing. Private businesses need to succeed first, then they can help the community if they so choose. Minorities and liberals want private businesses to help the community at their own expense