Mr. President, Your ‘Trickle-Down’ Economics Is A Mistake
Barack Obama sent a disturbing message to Black America last week: If you’re looking for the president to address the special needs of African Americans, you should start looking elsewhere.
Taking a page from Ronald Reagan’s failed trickle-down economic theory, President Obama made it clear that he has a double standard – one for African Americans and one for other powerful interest groups.
He said in a joint interview with USA Today and the Detroit Free Press, “The most important thing I can do for the African-American community is the same thing I can do for the American community, period, and that is to get the economy going again and get people hiring again.”
And in case you missed the point, he put it this way: “It’s a mistake to start thinking in terms of particular ethnic segments of the United States rather than to think that we are all in this together and we are all going to get out of this together.”
No, the mistake is to act as though all segments in America are equally positioned and therefore will benefit equally if and when there is overall improvement in the economy. In the 1980s, they called it Reaganomics. That economic theory is also known as supply-side or Keynesian economics. The elder George Bush had another name for it: voodoo economics.
By whatever name, the idea is the same: if we provide generous tax cuts and other special benefits to businesses, that will in turn create more jobs and thus benefit the larger population. Another slice of that same pie is that when the wealthy (aided by a reduction of capital gains taxes) invest more in business, that will lead to more goods and services being offered at lower prices and create more jobs for the middle and lower classes.
Economist John Kenneth Galbraith argues the opposite.
“There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests on them.”
The term trickle-down was coined by humorist Will Rogers. He said during the “Great Depression” that “money was appropriated for the top in hopes that it would trickle down to the needy.” Another variation on this theme was provided by President John F. Kennedy who argued, like Barack Obama, that a rising tide lifts all boats.
Gene Sperling, an aide to Bill Clinton, noted that, “The rising tide will lift some boats, but others will run aground.” During his 1984 presidential campaign, Jesse Jackson spoke often about boats stuck at the bottom.
The numbers show that those riding in the yachts and big ships, not those in boats stuck at the bottom, have benefited the most from a thriving economy.
The Census Bureau reports that the GDP per capita increased in the United States by 71 percent between 1980 and 2006. Over that same period, however, the median household income never exceeded 20 percent. A Federal Reserve Board survey found that the wealthiest one percent of families own 34.4 percent of the country’s net worth and the top 10 percent owns 71 percent. By contrast, the bottom 40 percent of U.S. families own less than one percent of the nation’s wealth.
While the country has almost gone apoplectic over the unemployment rate that now stands at 10 percent, the African-American unemployment rate is 15.6 percent. Where is the outrage about an unemployment rate that is 50 percent higher than the national rate? Are we to believe that a rising tide will automatically lift that boat?
Even among qualified job seekers, there is racial disparity.
According to the Bureau of Labor Statistics, the unemployment rate in 2009 for African-American male college graduates 25 and older was 8.4 percent, nearly double the 4.4 percent rate for their white counterparts.
Add to that studies that show that job applicants with black-sounding names receive half as many callbacks as those with white-sounding names.
No, Mr. President, it is not a mistake “to start thinking in terms of particular ethnic segments.” The mistake is to ignore the different plight that African Americans find themselves in. And while you shun targeting the neediest groups for special attention, you apparently have no problem helping a group of banks after they suffered self-inflicted wounds. You had no problem propping up Wall Street firms that basically spat in your face by continuing to award huge bonuses to the people who created the mess they’re in. And you didn’t mind segmenting the auto industry when their executives flew in on their corporate jets to borrow money from Uncle Sam.
If the federal government can target Wall Street, failing banks and the auto industry to the tune of billions of dollars, there is nothing wrong with targeting people who are more deserving of a helping hand. If Obama refuses to do that, I may have to buy one of those T-shirts that proclaim, “Keep the Change.”
(George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com. You can also follow him at www.twitter.com/currygeorge.)
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