US economist proposes $12 trillion in slavery reparations to eliminate black-white wealth gap

Johnboy60 · Aug 17, 2020

A renowned economist has said that $12 trillion should be afforded to black Americans in reparation for slavery to help the close wealth gap.

Duke University professor, William Darity Jr, and writer, Kirsten Mullen, jointly published a report for The Roosevelt Institute, an American liberal think tank, laying out a case for slavery reparations.

US economist proposes $12 trillion in slavery reparations to eliminate black-white wealth gap

Ana the Ist · Aug 18, 2020

Johnboy53 said:
A renowned economist has said that $12 trillion should be afforded to black Americans in reparation for slavery to help the close wealth gap.

Duke University professor, William Darity Jr, and writer, Kirsten Mullen, jointly published a report for The Roosevelt Institute, an American liberal think tank, laying out a case for slavery reparations.

US economist proposes $12 trillion in slavery reparations to eliminate black-white wealth gap

Sounds like he wasn't calculating reparations....he's calculating the racial wealth gap between whites and blacks.

What exactly makes this guy "renowned"? Surely he realizes the wealth gap between whites and blacks isn't solely because of slavery....he has to know that, he's an economist.

Olmhinlu · Aug 18, 2020

Here is the link to the report that the article refers to:

https://rooseveltinstitute.org/wp-c...rt_ResurrectingthePromiseof40Acres_202005.pdf

They suggest bridging the gap in mean average wealth not median. This is significant because "97 [percent] of white wealth is held by households with a net worth above the white median". The net effect of their proposition is that the median white household wealth will be $171,000, while the median black household wealth will be $817,600.

(They also say that a somewhat larger figure can be reached by compounding returns on the "40 acres", but that the prime motivation should be the first line of reasoning - equalising the mean household wealth gap).

tall73 · Aug 18, 2020

Olmhinlu said:
The net effect of their proposition is that the median white household wealth will be $171,000, while the median black household wealth will be $817,600.

They propose giving 800k to each black household.

Although, the usual discussion of wealth gaps focuses on median differences because the median captures the typical condition for American households, targeting the median will leave the racial wealth gap largely untouched. The fact that 97 [percent] of white wealth is held by households with a net worth above the white median ($171,000) makes any policy that seeks to close the racial gap at the median a policy that discounts, overwhelmingly, the largest proportion of racial wealth inequality (Darity, Addo, and Smith 2020, 6).Indeed, the magnitude of the black-white wealth gap that requires erasure should not be constrained by the fact that there is a highly unequal distribution of wealth among white Americans. In fact, there is a similarly highly unequal distribution of wealth among black people over a disproportionately, far smaller total (Darity, Addo, and Smith 2020, 3-5). Ultimately, a well-designed reparations program could have a powerful impact on producing greater wealth equality among black Americans. Consider the median-to-mean ratio. Suppose all black households received an additional $800,000 to make up for the mean deficit. As of 2016, the black median-to-mean ratio was $17,600/$138,000 or approximately 13 percent. If the black mean rises to the same level as the white mean through the provision of an additional $800,000 to each black household, the intra-group black median-to-mean ratio would change dramatically to $817,600/$938,000, or approximately 87 percent.

Olmhinlu · Aug 18, 2020

tall73 said:
They propose giving 800k to each black household

Correct.

Imagine a country where the median white household was worth <$200k and black households get +$800k - and that it's ostensibly good and right because Bezos, Gates and Buffett are loaded. I'm not sure that'll go over well.

Ana the Ist · Aug 18, 2020

tall73 said:
They propose giving 800k to each black household.

Did they happen to explain what constitutes a "black household"?

Although, the usual discussion of wealth gaps focuses on median differences because the median captures the typical condition for American households, targeting the median will leave the racial wealth gap largely untouched.

Because of the wide income disparity between white households.

The fact that 97 [percent] of white wealth is held by households with a net worth above the white median ($171,000) makes any policy that seeks to close the racial gap at the median a policy that discounts, overwhelmingly, the largest proportion of racial wealth inequality (Darity, Addo, and Smith 2020, 6).

Arguments like this highlight why reparations shouldn't happen.

Making the average wealth of a black household 800k while the average white household is 175k isn't equity or equality.

Indeed, the magnitude of the black-white wealth gap that requires erasure should not be constrained by the fact that there is a highly unequal distribution of wealth among white Americans. In fact, there is a similarly highly unequal distribution of wealth among black people over a disproportionately, far smaller total (Darity, Addo, and Smith 2020, 3-5). Ultimately, a well-designed reparations program could have a powerful impact on producing greater wealth equality among black Americans. Consider the median-to-mean ratio. Suppose all black households received an additional $800,000 to make up for the mean deficit. As of 2016, the black median-to-mean ratio was $17,600/$138,000 or approximately 13 percent. If the black mean rises to the same level as the white mean through the provision of an additional $800,000 to each black household, the intra-group black median-to-mean ratio would change dramatically to $817,600/$938,000, or approximately 87 percent.

I'm white....and I don't get to share in the 12 trillion dollars if wealth in white households. Therefore spreading 12$ trillion across black households doesn't make any sense.

It makes even less sense when someone tries to tie it to slavery.

tall73 · Aug 18, 2020

Ana the Ist said:
Did they happen to explain what constitutes a "black household"?

This is what I found, though I am not sure how that relates to households. I didn't read the entire document, but did search through it.

The case we make for black reparations in the United States centers on the provision of compensation for a specific community that consists, today, of approximately 40 million Americans. In From Here to Equality, we advance two criteria for black reparations eligibility. First, an individual must establish that they have at least one ancestor who was enslaved in the US. 2 Second, an individual must demonstrate that they have self-identified as black, negro, or African American on an official document—perhaps making public the self-report of their race on the US Census—for at least 12 years before the enactment of a reparations program or a study commission for reparations, whichever comes first.3 In short, the reparations plan we put forward designates black American descendants of US slavery as the target community.

tall73 · Aug 18, 2020

Ana the Ist said:
It makes even less sense when someone tries to tie it to slavery.

They specifically will not call it reparations when families or organizations who held slaves allocate funds to descendants of slaves they held.

To be clear, it is not our intent to let private corporations (or slaveholding families, colleges and universities built on slavery, etc.) “off the hook.” We do not discourage them from resolving to allocate funds for initiatives that will benefit some subset of black Americans. However, we object to the labeling of those initiatives as “reparations.” It is impossible to parcel out individual blame for actions produced by a legal and authoritative social system sanctioned by the federal government. Hence, the federal government should foot the bill via Congressional legislation. We eschew the judicial route to black reparations

How would a family or specific organization that held slaves paying funds to the descendants of those enslaved by them not be reparations, but money drawn from the treasury based only on the compared wealth of households would be?

Also, I did not see any extended discussion of how these 12 trillion dollars would be raised.

Ana the Ist · Aug 19, 2020

tall73 said:
They specifically will not call it reparations when families or organizations who held slaves allocate funds to descendants of slaves they held.

To be clear, it is not our intent to let private corporations (or slaveholding families, colleges and universities built on slavery, etc.) “off the hook.” We do not discourage them from resolving to allocate funds for initiatives that will benefit some subset of black Americans. However, we object to the labeling of those initiatives as “reparations.” It is impossible to parcel out individual blame for actions produced by a legal and authoritative social system sanctioned by the federal government. Hence, the federal government should foot the bill via Congressional legislation. We eschew the judicial route to black reparations

How would a family or specific organization that held slaves paying funds to the descendants of those enslaved by them not be reparations, but money drawn from the treasury based only on the compared wealth of households would be?

Well my point was about the 12 trillion dollar number they came up with.....it appears to be based on the wage gap, not the aggregate wealth that slaves would have accumulated if they were paid.

Also, I did not see any extended discussion of how these 12 trillion dollars would be raised.

In that way it has similarities to climate change. The goal exists but the means to achieving it don't.

cow451 · Aug 19, 2020

It's extremely complex because of the amount of time that has passed. I would think trying to prove one had an ancestor that was a slave could be quite difficult.

tall73 · Aug 19, 2020

Ana the Ist said:
Well my point was about the 12 trillion dollar number they came up with.....it appears to be based on the wage gap, not the aggregate wealth that slaves would have accumulated if they were paid.

Yes, I agree, though I think you meant wealth gap, as you noted before, rather than wage gap.

The method of calculating based on wealth difference, the use of the mean though that doesn't reflect what most Americans experience, and the payee being the government rather than particular responsible parties, all seems to be directed by the notion that they would not get a claim to a large amount of funds otherwise, or that responsible parties would not have the funds to pay it.

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