TED Talks Daily - (#6) Elise’s Top Ten: Racism has a cost for everyone | Heather C. McGhee

Episode Date: September 20, 2025

Racism makes our economy worse — and not just in ways that harm people of color, says public policy expert Heather C. McGhee. From her research and travels across the US, McGhee shares startling insights into how racism fuels bad policymaking and drains our economic potential -- and offers a crucial rethink on what we can do to create a more prosperous nation for all. "Our fates are linked," she says. "It costs us so much to remain divided."Interested in learning more about upcoming TED events? Follow these links:TEDNext: ted.com/futureyouTEDSports: ted.com/sportsTEDAI Vienna: ted.com/ai-viennaTEDAI San Francisco: ted.com/ai-sf Hosted on Acast. See acast.com/privacy for more information.

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You're listening to TED Talks Daily, the show where we bring you new ideas to spark your curiosity. every day. I'm your host, Elise Hugh. Welcome back to Elise's top 10 TED Talks, our first ever podcast playlist where we share a curated list of TED Talks from the archive on our feed all at once. This talk I'm sharing in this episode immediately comes to mind after listening to the previous one from George Monbiot on political storytelling. So up next is public policy expert Heather McGee. She spoke in 2019 on the effects that racism has on everyone and how much it costs us. Literally, racism makes our economy worse, and not just in the ways that harm people of color. It's especially timely as debates on race are before the U.S. Supreme Court, and at least in

America, non-white populations have faced stops in detention based on their race or the languages they speak. This talk is a powerful reminder that all of our faiths are linked, and it costs us more than we know to remain divided. I am a public policy walk. I investigate data that points to problems in the American economy, problems like rising household debt, declining wages and benefits, shortfalls in public revenue.

And I try to pinpoint solutions to make our economy more prosperous for more people. I geek out about tax policy and infrastructure investments, and I get really, excited by a gracefully designed regulatory regime. These are the kinds of topics that I was talking about on a public television live call-in show in August of 2016. I was about halfway through the program

when a man called in identified as Gary from North Carolina, and he said, I'm a white male and I'm prejudiced. He then went on to detail his prejudice, talking about black men and gangs and drugs and crime. But then he said something that I'll never forget. He said, but I want to change, and I want to know what I can do to become a better American.

Now, remember, my career is about economic policy, as translated into dollars and cents, I want personal thoughts and feelings, but when I opened my mouth to respond to this man on live television, the most surprising words came out. I said, thank you. I thanked him for admitting his prejudice, for wanting to change,

and for knowing somehow that that would make him a better American. The exchange between Gary and me went viral. It's been viewed over eight million times, and inspired waves of social media commentary and news coverage. And I think people were surprised that a black woman would show such compassion for a prejudiced white man, and they were surprised that a white man would admit his bias on national television. Not long after Gary and my viral moment,

we met in person. He said that he had taken my advice. He said that my words had been like, like someone wiped the dust from a window and let the light in. Over the years, Gary and I have become friends. And Gary would tell you that I've taught him a lot about systemic racism in America and public policy, but I've learned a lot from Gary, too.

And the biggest lesson for me has been that Gary's prejudice has caused him to suffer. Fear, anxiety, isolation. And it's made me rethink many of the economic problems I've been focusing on my entire career. I wondered, is it possible that our society's racism has likewise been backfiring

on the very same people set up to benefit from privilege? Driven by this question, I've spent the past few years traveling the country, researching and writing a book. My conclusion? Racism leads to bad policymaking. It's making our economy worse. And not just in ways that disadvantaged people of color.

It turns out it's not a zero-sum. Racism is bad for white people, too. Take, for example, America's underinvestment in our public goods, the things that we all need that we share in common, our schools and roads and bridges. Our infrastructure gets a D-plus from the American Society of Civil Engineers, and we invest less per capita than almost every other advanced nation.

But it wasn't always this way. I traveled to Montgomery, Alabama, and there I saw how racism can destroy a public good and the public will to support it. In the 1930s and 40s, the United States went on a nationwide building boom of public amenities funded by tax dollars, which in Montgomery, Alabama, included the Oak Park Pool,

which was the grandest one for miles. You know, back then, people didn't have air conditioners, and so they spent their hot summer days in a steady rotation of sunning and splashing, and then cooling off under a ring of nearby trees. It was the meeting place for the town, except the Oak Park pool, though it was funded by all of Montgomery's citizens,

was for whites only. When a federal court finally deemed this unconstitutional, the reaction of the town council was swift. Effective January 1st, 1959, They decided they would drain the public pool rather than let black families swim to. This destruction of public goods was replicated across the country in towns, not just in the south.

Towns close their public parks, pools and schools, all in response to desegregation orders, all throughout the 1960s. In Montgomery, they shut down the entire Parks Department for a decade. They closed the recreation centers. They even sold off the animals in the zoo. Today, you can walk the grounds of Oak Park, as I did, but very few people do.

They never rebuilt the pool. Racism has a cost for everyone. I remember having that same thing. on September 15th, 2008, when I learned the breaking news that Lehman Brothers was collapsing. Now, Lehman was, like the other financial firms that would go under in the coming days, done in by overexposure to a toxic financial instrument,

based on something that used to be simple and safe, a 30-year fixed-rate home loan. But the mortgages at the center and the root of the financial crisis had strange new terms. and they were developed and aggressively marketed for years in black and brown middle-class communities, like the one that I visited when I met a homeowner named Glenn. Glenn had owned a home on a leafy street

in the Mount Pleasant neighborhood of Cleveland for over a decade, but when I met him, he was near foreclosure. Like nearly all of his neighbors, he'd received a knock on the door from a broker promising to refinance his mortgage, but what the broker didn't tell him was that this was a new kind of mortgage, a mortgage with an inflated interest rate,

and a balloon payment, and a prepayment penalty if he tried to get out of it. Now, the common misperception then and still today is that people like Glenn were buying properties they couldn't afford, that they themselves were risky borrowers, risky borrowers. I saw how this stereotype made it harder for policymakers to see

the crisis for what it was back when we still had time to stop it. But that's all it was, a stereotype. The majority of subprime mortgages went to people who had good credit, like Glenn, and African-Americans and Latinos

were three times as likely, even if they had good credit. than white people to get sold these toxic loans. The problem wasn't the borrower. The problem was the loan. After the crash, most of the nation's big lenders from Wells Fargo to countrywide

would go on to be fined for racial discrimination. But that realization came too late. These loans, super profitable for the lenders but designed to fail for the borrowers, for the borrowers spread out past the confines of black and brown neighborhoods like Glens and into the whiter, whiter mortgage market. All of the nation's big Wall Street firms bet on these loans.

At its peak, one out of every five mortgages in the country was in this mold, and the crisis, the crisis that my colleagues and I saw coming, would go on to cost us all. $19 trillion in lost wealth. Pensions, home equity, savings. Eight million jobs vanished. A home ownership rate that has never recovered.

My years of advocating in vain for homeowners like Glenn left me convinced we would not have had a financial crisis if it weren't for racism. In 2017, I traveled to Mississippi, where a group of auto factory workers was trying to organize into a union. Now, the benefits they were fighting for higher pay, better health care coverage, a real pension,

they would have helped everybody at the plant. But in person after person that I talked to, to white, black, for the union, against the union, race kept coming up. A white man named Joey put it this way. He said, white workers think, I ain't voting yes if the blacks are voting yes.

If the blacks are for it, I'm against it. A white man named Chip told me the idea is that if you uplift black people, you're down in white people. It's like the world's got this crap a grab-in-a-barre mentality. Now, the union vote failed. Wages at the plant are still lower than their unionized peers,

and people there still worry about their health care. You know, it's tempting, perhaps, to focus on the prejudiced attitudes of the men and the workers that I heard in Mississippi. But I'm more interested in holding accountable the people who are selling racist ideas for their profit than those who are desperate enough to buy it. My travels also took me to places where I saw, however, that it doesn't have to be this way.

I went to Maine, the white estate in the nation, the oldest, where there are more deaths every year than births, and I went to this dying mill town called Lewiston that is being revitalized by new people, mostly African, mostly Muslim, immigrants and refugees. There I met a woman named Cecile, whose parents had been part of the last wave of new people to come to Lewiston.

These are French-Canadian mill workers at the turn of the century. Cecile was retired, but she had found a new purpose in life by organizing Congolese refugees to join with the white retirees at the Franco Heritage Center. These men and women from the Congo were helping these retirees remember the French that they hadn't spoken

since their childhoods. And together, these two communities helped each other feel at home. You know, for all the political talk about the newcomers being a drain on the town, a bipartisan think tank found that the local refugee community there created $40 million.

and tax revenue and $130 million in income. And I talked to the town administrator who was boasting about the fact that Lewiston was building a new school when all the rest of towns like theirs in Maine was closing them. You know, it costs us so much to remain divided. This zero-sum thinking that what's good for one group has to come at the expense of another,

it's what's gotten us into this mess. I believe it's time to reject that old paradigm and realize that our fates are linked. An injury to one is an injury to all. You know, we have a choice. Our nation was founded on a belief in a hierarchy of human value, but we are about to be a country with no racial majority. So we can keep pretending like we're not all on the same team.

We can keep sabotaging our success and ham-streaming our own players, or we can let the proximity of so much difference reveal our common humanity, and we can finally invest in our greatest asset, our people, all of our people. Thank you. That was Heather McGee at TED Women in 2019. This is the sixth of 10 talks from the TED Archives that we're reposting as part of our first podcast playlist of my top 10 talks.

And coming up, something a little different. We're going to look into the design of cities. If you're curious about Ted's curation, find out more at TED.com slash curation guidelines. Ted Talks Daily is part of the TED Audio Collective. This talk was fact-checked by the TED Research Team. and produced and edited by our team, Martha Estefanos, Oliver Friedman, Brian Green,

Lucy Little, and Tonica Sung Marnivong. This episode was mixed by Lucy Little. Additional support from Emma Tobner and Daniela Ballerazo. I'm Elise Hu. Thanks for listening. Can't take being on hold anymore FIS is 100% online so you can make the switch in minutes

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