Rico's rants: Reparations, maybe

Hamilton Nolan has a Gawker.com article about What Reparations in America Could Look Like:

Ta-Nehisi Coates made the case that America owes reparations to its black community. But he purposely left out the details of what a reparations program might look like. We will now make a proposal, for your consideration.
Coates' essay in the May issue of The Atlantic, a masterful blend of emotion and fact, focused on the hardest part of the reparations debate: convincing Americans that some sort of reparations are just, plausible, and necessary. That debate clearly is not won. But we want to leave that aside for a moment. Coates made the case better than we would, and besides, that goddamn argument is a never-ending nightmare. What we would like to do is to take a moment to think about the second, and equally important, part of the reparations issue: the substance of the reparations. If the United States did decide to have some sort of program of reparations focused on righting the wrongs of the past, what might that program look like?
First, though, let's briefly examine the evidence of the damage that has been caused by America's legacy of slavery, white supremacy and terrorism, and systematic discrimination against black people. It is not necessary to restate that history. Let's just focus on where it has gotten us today. On wealth, from The Atlantic:
The Pew Research Center estimates that white households are worth roughly twenty times as much as black households, and that, whereas only fifteen percent of whites have zero or negative wealth, more than a third of blacks do.
And on income, as well:
The income gap between black and white households is roughly the same today as it was in 1970. Patrick Sharkey, a sociologist at New York University, studied children born from 1955 through 1970 and found that four percent of whites and sixty-two percent of blacks across America had been raised in poor neighborhoods. A generation later, the same study showed, virtually nothing had changed.
The latest census figures show that, in 2013, the median black household earned just under $35,000, while the median white household earned more than $58,000. The black unemployment rate has been twice as high as the white unemployment rate for the past fifty years. These are not random economic fluctuations. When you enslave people, steal their labor, and then oppress them for countless generations afterwards, the economic effects persist.
When considering what sort of reparations are appropriate, it is important to keep in mind that the institution of slavery did not just set back black people— it also greatly enriched white people. It is not just that, when slavery ended, black people were starting from farther behind— white people were starting from farther ahead, having reaped enormous profits for hundreds of years by stealing the fruits of black people's labor. If the public refuses to calculate the cost of slavery on human lives and souls, at least calculate this: money was stolen. Lots of it! Broadly speaking, white Americans today have benefited from a great infusion of wealth that slavery provided to their ancestors, and black Americans have lost out on that wealth to at least the same degree (if not more, given the opportunity cost of all the wealth-building activities that slaves never got the chance to undertake).
Just how much of white America's historic wealth was derived directly from the exploitation of black people? In the 1820s, a full one-fifth of America's wealth consisted of slaves. In the South, the effect was magnified. "In the seven cotton states, one-third of all white income was derived from slavery," Coates writes. "By 1840, cotton produced by slave labor constituted nearly sixty percent of the country's exports." By 1860, just before the Civil War, "slaves as an asset were worth more than all of America's manufacturing, all of the railroads, all of the productive capacity of the United States put together."
As America was literally being built on the backs of black labor, black America was in effect going backwards, wealth-wise. The wealth that should have been theirs was taken by white people, and invested, and used to build other wealth-accruing assets and businesses. Even if black people had been granted full legal and social equality at the end of the Civil War, they would have been starting out from a distinctly disadvantaged economic position. At that time, reparations probably would have seemed like a pretty common sense measure: "You stole our freedom and our labor from us for hundreds of years. Now we're free. Pay us back." Throw in another hundred years of legal discrimination and plenty of violence and implicit socioeconomic discrimination after that, and you'd think that reparations would seem like an even more common sense measure today.
Time, however, allows white America to elide individual responsibility for slavery's repercussions. "I didn't own slaves", after all. (Repeat as needed, white Americans). Anyone looking at history in good faith, though, will acknowledge that collectively many white Americans have greatly benefited from the fortunes big and small built on slavery; and collectively many black Americans are still lagging behind economically today as a result of past injustices that directly benefited many of their fellow citizens. It is possible to acknowledge this, and to acknowledge that direct "blame" is not a useful concept in this discussion, given the passage of time. Yes! It is possible! This issue is not about "blaming white people for slavery". (Repeat as needed, white Americans). It is about trying to in some way make right a historic wrong that is still causing pain to people today.
So what do we do? Just write a check to every black US citizen? That approach, while direct, has obvious flaws: what about black people who are already economically well off? What about poor white people— what do they get? And does cutting a check to a distant descendent of a slave really do anything meaningful to correct a flawed society? Also, is that even constitutional?
Any system of reparations that might have a glimmer of a chance of one day (a long time from now) becoming reality are going to need to be a lot more nuanced. Here is one reality about them: they cannot only go to black people. It's just a political— and probably legal— impossibility. There are too many white voters. Christ, even something as innocuous as food stamps is still, in 2014, a racist dog whistle mired in controversy; imagine the reaction to cutting strictly race-based checks. It will never happen. The only form that reparations could plausibly ever take is a huge, nationwide program designed to address the modern-day effects of slavery and discrimination— most importantly, poverty— without putting in place strict racial boundaries.
There are some benefits to this approach. Lefties are always wondering how to get poor white people to unite with poor non-white people to fight for common cause. One good way: address their common problem by paying them both. There's no better way to make explicit their common economic plight. The success of the Republican party has long been based on the well-discussed notion of getting non-rich, culturally conservative white people to vote against their own economic interests. By creating a reparations program that puts real money on the table to address persistent and pervasive poverty, the poor of all races and subcultures have a very real rallying point. Any program targeted at the poor will draw in a high percentage of black Americans, who tend to be poor. This is a crude but effective way of approximating racial reparations without using race as the only criteria for eligibility.
One cold truth of any American system of reparations is that it will amount to a great national antipoverty program open to all races. Rich black people will be excluded, and poor white people will be included. Another cold truth is that anything billed as an American system of reparations will probably only get one chance at happening. Once the money has been spent, you can expect a large percentage of people on the right side of the political spectrum to hold it up as evidence that the debt of American racism has been fully paid off, and there should be no more whining. This will be false. But this already happens today, and if we can get an enormous antipoverty program out of it, it would be well worth it. Much of white America will ignore the legacy of slavery whether or not they're forced to pay someone back for it. So, might as well get the money.
Just because reparations may not be specifically race-based does not mean that they shouldn't be pegged to the problems that racism has created. The program should be designed with the aim of trying to ameliorate the huge racial wealth gap that has remained stubbornly persistent throughout modern American history. Poor people of all races will get benefits, and that's fine. But its levels should be set with the idea of at last trying to go at least some of the way towards evening the economic playing field, which has been racially slanted for the entire history of our country. No government program will "solve racism," and no amount of money will change people's hearts. So forget that, as a goal. We are talking about giving everyone in our nation a measure of economic hope. Equality! Fairness! These are the aims of any program of reparations. Not special treatment. There is nothing more American than that, in theory.
Reparations will amount to a transfer of wealth from the more powerful to the more powerless. This is the closest approximation of justice that I would imagine is possible.
We will now engage in some purposely simplified back-of-the-envelope math. Imagine a nationwide, one-time infusion of wealth to those who live at the lower end of America's economic pyramid. Let's take as our starting point that black households have roughly sixty percent of the income and five percent of the wealth that white households do. (Hispanic households have just a tiny bit more wealth than black households. Median household net worth is about $81,000. Average household net worth, which is swelled by the fortunes at the top, is $535,000.) For the sake of argument, let's be exceedingly modest in our goals: let's imagine giving an amount of money that would give the average black household at least more than half of the wealth of the average white household. We can calculate this very neatly: if black households have five percent of white net worth now, let's add fifty percent to that, giving the average black household 55% the net worth of the average white household, which is something north of $110,000. Sticking with our neat, clean, and modest estimate here, let's round half of that down to $50,000.
Fifty thousand dollars per household. This would be enough in theory to raise the average black household to at least half of what the average white household has in wealth. I would call that an exceedingly modest goal, as reparations go. For ease of math, let's call that $25,000 per single adult, or $50,000 for families with children. Give this amount as a one-time payment to, let's say, the entire bottom half of American adults by wealth. That's about 120 million people. For the sake of plausibility, let's limit ourselves to adults under the age of 65— sorry, retirees, we promise to fund your Social Security. That leaves us with about a hundred million Americans. So a reparation payment of $25K per would come in at a total cost of $2,500,000,000,000. Pricey! But let's spread it out over, oh, five years. Now it's only five hundred billion dollars a year. That's only about three quarters of the Defense Department's budget, and for a much more worthy cause.
How do we pay for something like this? (If you doubt America's ability to pay for something like this, witness the magical rescue of the banks in 2008). Since the aim here is to take a step towards righting the economic wrongs of the past, we could aim to levy taxes in two areas that disproportionately favor whites over blacks when it comes to holdings of wealth: financial securities, and real estate. For example, higher capital gains taxes, a financial transaction tax, an estate tax, higher land taxes... these are all things we should be doing anyhow, for the good of society. Some of the reparation money could also come in the form of tax credits, by suspending the regressive payroll tax that disproportionately targets the poor. Some of it can be financed with debt. The makeup of the tax scheme that we would use to pay the bill is a separate discussion, but recent history has amply proven that the money can be found if we have the political will. And keep in mind that this money is not being tossed into a bonfire— it is being given to the people most likely to spend it. This could be the greatest single economic stimulus this nation has ever seen. This is not destruction of wealth; it is a transfer of wealth, on a large scale.
Let's address a few objections that are bound to crop up:
1. Money is not enough to address the evils of slavery and the legacy of racism. I strongly agree. But when we talk about "reparations", money is the form they are likely to take. This is an effort at sketching out a proposal for that. The hard work of healing America's soul and dealing with the social reality of racism will take generations, reparations or not. So, again, might as well try to get some economic equality in the meantime.
2. $25,000 is a pittance compared to the historic damages. I strongly agree. However, this is an effort at a proposal that might be at least somewhat realistic or plausible, if the political will for reparations ever came to exist. $25K per person is not a lot, but it is enough to pay off debts, start a business, start investing, or do other things that open the door to economic advancement. It is a stool to stand on, as you climb out of poverty. It is breathing space. And it is within the realm of reality. If anyone can convince America to give more, I am all for it. The number is just a starting point for the discussion.
3. This monetary payment is not enough to address the myriad ills that are still the legacy of racism. I strongly agree. This payment will not make the public school system function well for rich and poor alike. It will not fund adequate affordable housing in America, it will not give everyone health care, it will not give everyone a job with a living wage. Nor is it supposed to. Any program of reparations must be understood as being separate and distinct from the many other governmental programs that are necessary parts of a well functioning society. Reparations, if they ever come to exists, must explicitly not replace anything. They are meant to address problems with origins in the distant past. They are not meant to be a cash payment in exchange for trading away other necessary programs.
4. This is too expensive. Is it? Again, this sort of money going into the pockets of the poorest Americans would lead to a lot of economic stimulus. This could be considered expensive by those being asked to shoulder higher taxes to pay for it. But those being asked to pay for it should, in aggregate, be a group that has likely benefited economically from the history of slavery. Fair is fair. As a whole, America should be left more equal after this, not poorer.
This is a very rough idea of what reparations might look like. It is not meant to cover every detail. It is merely meant to suggest that, yes, something can be done that accomplishes at least some of the goals that those who argue in favor of reparations seek. This is not all a utopian dream. This is something that our nation owes to its own citizens. We would exit the other side with greater equality, greater opportunity for all, and the knowledge that, while we can never make up for the wrongs of history, at least we did something, not nothing.