The emotional responses by black Americans to media’s depiction of Donald Trump is getting annoying. Black Americans drank a lot of the symbolism in the Obama Kool-Aid in the last eight years, so much so that using a portrait of the 44th president and the former first family as a social media profile picture is the norm for many on Facebook.
Besides the symbolism of a man of color winning an American presidential election, not much happened in terms of wealth creation and capital acquisition for blacks during his tenure. In a June 2016 report, the Pew Research Council noted the following:
“Analyses of federal government data by the Pew Research Center find that blacks on average are at least twice as likely as whites to be poor or to be unemployed. Households headed by a black person earn on average little more than half of what the average white households earns. And in terms of their median net worth, white households are about 13 times as wealthy as black households – a gap that has grown wider since the Great Recession.”
Pew went on to note that black households are twice as likely to be poor than white households, and even with a shrinking educational gap, whites with college degrees continue to out earn blacks with similar educational credentials. For black households with a bachelor degree, the median income is approximately $83,000 compared with similarly educated white households coming in at approximately $106,000.
Of greater interest to me is the wealth gap, which, again, widened under President Obama’s term. In 2013, according to government data cited by Pew, the median wealth for white households came in at $144,000, thirteen times the amount of median wealth held by blacks. When you control for educational differences, the sheepskin hanging on the wall or sitting on a shelf gathering dust becomes increasingly worthless. Where white households headed by a bachelor’s degree holder have median wealth of $301,000, black households headed by a bachelor’s degree holder have median wealth of $26,000.
CNN, citing the 2016 Assets and Opportunities Scorecard, lists the usual suspects for the wealth gap, including discrimination in the labor markets, lower wages paid to blacks versus those paid to whites, stagnant wages in urban centers where cost of living is increasing, and a lower proportion of blacks owning homes versus whites. The usual solutions are listed as well, including stronger anti-discrimination laws, increased consumer protections from predatory lenders, and tax reform.
Given that these recommendations came near the end of the Obama administration, I have to ask whether these ideas were tried and if so, did they work? Mr Obama’s emphasis on a “middle class and out” economic strategy saw his administration in the early years attack the foreclosure crisis. That was nice, if you owned a home and given that fewer blacks than whites own homes, I don’t see how this policy was a positive for blacks.
Quite frankly, pushing or keeping people in the credit markets so that they can buy money in order to purchase a home that doesn’t pay them anything at the end of the month borders on insidious, but that is another discussion.
When it came to tax reform, Mr Obama emphasized raising taxes on the wealthy with nary a mention of lowering taxes on the poor or lower middle class. And while the Dodd-Frank Act spawned the federal consumer financial services protection bureau, blacks, I don’t see how that agency could positively impact a significant portion of people who were not even in the credit markets to begin with.
In short, the Obama administration failed blacks, but if it consoles all the Donald Trump haters, I don’t expect any different from the current Administration.
The vast majority of black Americans will argue that government must come to their aid; that they are entitled because of the centuries of discrimination and racial violence spawned from slavery. Since government condoned these atrocities, the argument is a strong one.
On the other hand, blacks ignore the historic goal of American government. From the 15th century when European monarchs issued charters to individuals and trading companies to explore and colonize the western hemisphere, government’s primary duty has been to monopolize an area’s resources and ensure those resources could be extracted for the monarchy and the investors who financed exploration.
Blacks, brought here as human capital to be employed at no cost, today hold almost no capital and are denied access to it. Unlike their white counterparts who were granted homesteads in order to populate the west, capital was never directed toward blacks for the purpose of economic empowerment and self-determination. One hundred fifty-two years after their release from physical bondage, blacks are still buffeting in slavery’s wake.
This is part of the reason why a small number of blacks view Barack Obama’s presidency as a failed one. He made no attempt to direct substantial and significant capital toward blacks. Such a redistribution may have jumped started a real initiative to close the wealth gap. If there was an opportunity during the 44th administration, it is now lost with the 45th.
The only option I see for blacks is to abandon the current rules, systems, and institutions that guide wealth accumulation in the United States. I’ll explore that option in another post.