The Method of Reparations

Ta-Nehesi Coates makes a powerful case for reparations that’s been going around the net. Leaving the moral necessity of a large-scale program of the sort behind, I want to think about the method through which an “intent to repair” would be delivered. The base case would of course be a tax on white America financing a subsidy to black America. I don’t think anyone in this conversation – at least anyone serious about achieving more racial equality – thinks this is a good idea. The problems are infinite: did the many immigrants into the United States after the end of slavery contribute to the “ten stabs” of which Coates speaks? Am I culpable if my grandfather voted and fought against Jim Crow?

Matt Yglesias finds a way to use the words “slavery reparations” and “excess bank reserves” – and not facetiously either – in the same post, arguing that monetary policy should finance a large-scale reparations program. This would allow America as a whole to share the burden for its collective sin (and, in a liquidity trap like this, more money is hardly even a burden with inflationary pressures all but absent).

And while this answers an important question – where do we get the money? – it leaves even more challenging ones unanswered. For example, if the forward discounted cost of slavery really stretches into the quadrillions of dollars, should we give hundreds of thousands of dollars to this generation of blacks? Should we bequeath it in a special government trust that pays handsome returns in perpetuity?

This is an unreasonable question, because whatever the true cost of slavery is, were we to repay blacks today with that extraordinary amount it would either be straight unaffordable (even with an accommodating Fed in a weak economy) or critically unfair to other poor whites today, given the rapidly diminishing returns of that money (it’s not as if methland America is nice, either). And, on the other hand, if we give a substantially more affordable amount – even something like $100,000 per black, over a few years – it would unlikely move the needle much (I’ll get to why), and after the “stimulus” runs out, it will yet again give the privileged in this country to act as if they’ve paid their debt, and pave the road for grammatically-challenged Ivy League whiners to support the end of affirmative action for good.

And why wouldn’t money by itself help? Well, Coates (implicitly) has the answer in his essay:

Black families making $100,000 typically live in the kinds of neighborhoods inhabited by white families making $30,000.

The problem in America today is deep institutional racism, specifically in the criminal justice and law enforcement system, that has perpetuated decades of familial decay, absentee fatherhood, and disadvantaged youth. And the sudden ability to buy a nice Honda isn’t going to change the fact that the mandated minimums on crack are manyfold that on cocaine; that urban police officers are systematically racist, and that we have criminalized not the economics, but the culture of poverty itself.

So within generations of the reparations, the crushing reality of American justice will keep blacks stuck where they are today. Let me be clear – underlying my message here is actually a less politically-correct, more traditionally conservative view that those in question will not be able to capitalize on their new wealth correctly: not that they would spend it on booze and drugs, but that current institutions are warped in a way preventing the necessary formation of family (not beyond what is natural, in the socially conservative sense of subsidizing marriage, but what would be present without the meaningless imprisonment of young black men and boys) and inculcation of strong habits (via a father/mother figure) necessary to make best of the compounding effect Ezra Klein notes.

As sexy as a reparations package may sound, the best thing we can do today, both cheaper and more effective, is bringing accountability to the vigilante law enforcement system that is local and state police and ending the war on drugs. Liberals – and I’m looking at Barack Obama – should be ashamed of how little they have done to end the legal subjugation of black America. Most people are horrified by the stories they read but, unfortunately, as much of this country – including the liberal, Beltway elite (because fuck SE, right?) – does not face (or see anyone face) the trouble of institutional racism, and those that do are in no position to fight back, the national conversation gets shifted towards other important, but hardly urgent, issues like long-term trends in inequality, deficits, entitlements, and “middle class tax cuts”.

What we need is affirmative action. But on an incredible scale.

Part of reconstructing a culture patterned by recidivism is creating a tight labor market. It’s no surprise that African American labor force participation has been on a decline for over three decades, even when the rest of the country was becoming more active.

(Edit: As Kevin Erdmann points out in the comments, I made an incorrect comparison as the African American time series is limited to men, a naturally skewed point. I’m not at my desktop right now so I can’t add the image, but the spread between black men and all men has increased over this time period. Right after 1970 there was no spread, which is now trending upwards of 4% and moving).

Image

 

And even with a much less proportionally active labor force, unemployment remains twice as high. Probably because employers don’t hire ex-cons, even if they were innocent (or in jail for trivialities). This is central to decades of wage stagnation, but also negative perceptions of this community among the rest of the country.

And there’s an easy fix, that doesn’t require us to spend all that much more money. Congress allocates a lot of spending for district projects in the form of earmarked “pork”, and legislation is often fraught with gimmicky requirements that create jobs in various districts. This, by the way, is why you keep hearing that Congress gives the military weapon systems it didn’t even ask for. Of course, the government spends on necessities, primarily defense spending, but much more than that – may of which need to be manufactured or serviced in the United States.

What if we ensured that all of these projects would be allocated to tough, black neighborhoods with impossibly high unemployment and low marginal product workers? More importantly, the job training that would be useful would create another thriving industry of its own. And let the affirmative action percolate to smaller things – even jobs cleaning trash on the roads and serving on the police force. Anything and everything that doesn’t require specific, technical skills.

This would naturally lead to disemployment of whites relative to blacks, but there’s no reason it has to be absolute. We can create more demand – remember our roads and bridges are falling apart, and our airports suck. There’s so much this country needs to invest in and, luckily, a lot of it will require lots of labor over a period of many years. Creating a tight labor market will be so much more eventual stimulus than handing out checks, especially when it will help combat the institutional racism that really shackles African Americans today.

Affirmative action in educational institutions does way too little, way too late. But it gets at the right idea. What we need is a large-scale, money-financed, investment program that affirmatively employs thsoe wronged by our collective, past sins.

And everyone benefits since this is something we need anyway.

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8 comments
  1. You should probably look at lfp again. You are comparing black men to the total lfp. If you compare black men to total male lfp, you’ll find that the trend is very similar. Race is not a factor there.

    • Thanks for the catch, you’re absolutely right. I’ve noted this incorrect point, though (I think) more salient point about unemployment remains.

  2. enrique said:

    Reblogged this on prior probability and commented:
    We are reblogging Ashok Rao’s recent post on the issue of slavery reparations. Ashok’s critique of “the vigilante law enforcement system that is local and state police” is especially on point. What is equally disgraceful is how little law professors (myself included) have collectively done and said to shed some light on this gross injustice that is the “war on drugs.” Instead, we perpetuate this gross injustice through our silence. Why are we part of the problem instead of the solution?

  3. First I support legalization of all recreational drugs along with allowing people to get most prescription drugs without an MD’s permission (IMHO antibiotics should still be controlled in some way i.e. someone needs to take a test to get them or get a prescription).
    On the other issues that you cannot unscramble eggs. Considering the past perhaps the black subculture seems to have developed different values that white culture. Who are you that you should try to change that?

    BTW perhaps the most valued jobs in the USA are college and professional basketball and football player and they are are dominated by blacks. The pay may be very low for college basketball and football player but people who achieve that spend the rest of their lives talking about it.

    • Starting with your last comment, the most powerful and prestigious man in the world is black. But that doesn’t say much. We can talk more about blacks dominating the best jobs when they constitute more than an infinitesimal portion of the country.

      I’m not sure where you get that I’m trying to change black culture. I’m arguing that it’s completely laughable that anyone would claim the current state of affairs is a result of culture when there is systematic, institutional discrimination at every level in the legal system.

      And yes, let’s legalize everything except for antibiotics.

      • The 2 sections below :

        “What we need is affirmative action. But on an incredible scale.”

        “but that current institutions are warped in a way preventing the necessary formation of family (not beyond what is natural, in the socially conservative sense of subsidizing marriage”

        And your rejection of a lump sum payment are what led me to believe that you want to change black culture. I think that other than the problems due to drugs being illegal, blacks do well in the USA though they may not live as whites would like them to.

        BTW inexplicably blacks seem to do better in conservative south (excluding Louisiana) than they do in the north (excluding New York). For example young black men are far more likely to be victims of homicide in Boston MA than In Atlanta GA.

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