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Policy

6:53pm August 21, 2012

Economy, Wealth and Government: Is America in Need of an Intervention?

Great Depression Newark 1935

The federal government has done a good job of sharing the pedestal with God. We have prayed for intervention from government and it has delivered, at least legislatively, over the last 100 years.

In 1913, government delivered the Federal Reserve, America’s central bank, whose schizophrenic mission is to promote full employment and stable prices.

During the administration of President Franklin Delano Roosevelt our prayers to our new savior were answered when the federal government created the Federal Home Loans Office to buy up distressed mortgages so that the natural tide of foreclosure could be averted. Government created the Federal Communications Commission and the Tennessee Valley Authority for the purpose of providing an infrastructure giving Americans universal access to communications networks and electrification.

The Roosevelt Administration also reigned over the passage of the Glass-Steagall Act which prohibited commercial banks from combining their depository banking functions with investment banking.

Social Security was also born during the Great Depression era. Taxpayers would be assessed an insurance premium or social security tax in exchange for the promise to pay benefits upon a certain retirement age.

President Lyndon Johnson’s Great Society carried on President Roosevelt’s New Deal spirit into the 1960s. Liberal Democrats and moderate Republicans delivered for LBJ the Civil Rights Act of 1964 which prohibited discrimination based on race in interstate commerce. The Voting Rights Act of 1965 prohibited discrimination against and voter suppression of minority voters, making illegal literacy tests and poll taxes which were specifically designed to keep Blacks in the South from voting. The Fair Housing Act of 1968, passed in the U.S. House of Representatives days after Dr. Martin Luther King was assassinated, prohibits discrimination based on race, religion, national origin, or sex during the sale or rental of housing.

And how has government intervention in the economy helped Blacks in terms of income and wealth? Only an anarchist would take the extreme position that government should stay completely out of people’s affairs. Results are mixed as to how well our political economy has fared since moving to a government-as-intervener model from the laissez faire model that was prominent prior to the Great Depression.

According to the U.S. Bureau of the Census, between 1967 and 2010, Black Americans have seen per capita their incomes increase 124%, while whites during the same period saw their per capita incomes increase 89%.

But even with the higher rate of increase in income, there is still a significant gap in income and wealth. In 1967, Black American per capita income was approximately 54% of White American per capita income. By 2010 the gap shrunk, with Black Americans making approximately 64% of White American per capita income.

What is more staggering is the wealth gap between White American and Black American households. Whites have a median household net worth of $110,729 while Blacks have a median net worth of $4,955.

How much of a role has government policy played in the current economic state of Black America is hard to ascertain. After 80 years of a more regulated economy, are the results we see satisfactory? Is government’s role to guarantee an equal distribution of income and wealth and if not what other mechanisms are in place to help Black Americans get there? Do we even need government to provide those mechanisms for us?

Unfortunately, these questions won’t be answered by November 6, and few are putting them on the front burner for discussion with questions of gay marriage rights and abortion rights filling up the vacuum, at least until the debates and then maybe not.

If government is indeed partially responsible for the results we’ve seen, its current policy focus is letting us down and it’s not answering our prayers of intercession.



About the Author

Alton Drew
Alton Drew provides advocacy and consulting services in the areas of economic and personal liberty, broadband, and energy. Follow him on Twitter @altondrew; Facebook at http://www.facebook.com/alton.drew.5; or visit him at www.altondrew.com. The ideas and opinions expressed in this article are solely those of the author, and have complete editorial independence from any Politic365 partners, sponsors, or advertisers. For additional information about Politic365, please visit http://politic365.com/about/.




 
 

 
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2 Comments


  1. Wm_Tucker

    So many loaded questions… so few valid assumptions supporting them.

    You've listed a mix of programs, gov't agencies, and laws, all of which are fine examples of democracy at work. In each case millions of people informed themselves on the issues and took action to implement solutions. Such acts are products of intelligence and rational thought, not blind faith in a supernatural entity.

    Honest, conscious people understand there are various socioeconomic inequities which represent Americans' division into classes, and that gov't has alternately enabled and remedied class divisions over time. Given class divisions remain to an extent the state of America's economy is less than optimal, the justification for citizens to formulate, then effect corrective public policies is sound.

    There's no need to pray when you can pull a lever at the ballot box. Some of us know this.


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