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Saturday, October 1, 2016
Economics/Business ... History ... Public Policy ... Society ...

In my last post, I discussed the notion of a “political economy” and reviewed some very insightful thoughts by political journalist John Judis, which seek to explain the rise of Bernie Sanders and Donald Trump in economic terms. In a nutshell, Judis feels that both Sanders and Trump represent different points on the same underlying wave of populist dissatisfaction with our nation’s current political economy. Just what is this “economy” that so many people are dissatisfied with? It’s a high-tech version of what we called “Reaganomics” back when it was introduced in the early 1980s, with various modifications and adjustments made during the presidency of Bill Clinton. As such, I call it the “Reagan-Clinton1” political economy, although Judis gives it the more academically acceptable tag of “market liberalism” (not to be confused with political liberalism, which largely detests Reaganomics).

Many other pundits have explained the rise of Trump in terms of racism, perhaps a backlash against the ascent of Barack Obama. They admit that many of Trump’s largely white supporters have experienced tough economic times, but contend that the motivations behind Trump’s ascendancy largely reflect the fact that minorities have gained power, and that whites are increasingly anxious about this. Certain pundits, however, (e.g. David Roberts and Derek Thompson) also contend that this racial resentment has an economic component, a racial selfishness reflecting the belief that whites are no longer automatically first in line when it comes to reaping the benefits of the system.

My question is whether the political responses to Reaganomics from the black community and its leaders have in any way fed into the white racial anxieties that Trump seems to have drawn much of his support from.

Ironically, a look at some income statistics spanning the past 40 years indicates that in the aggregate, whites have historically maintained their economic supremacy over minorities, and this does not change either in the post-9/11 years or in the post-Financial Crash period. Let’s have a look.

I’ve posted here a chart from the US Census Bureau’s “Income and Poverty: 2015” report, released just a few weeks ago. This chart shows yearly real (constant dollar value) median household income by race and Hispanic origin since the late 1960’s. A quick look indicates that non-Hispanic whites have always done better than Hispanics and blacks. A closer look shows that black income peaked in the year 2000 and then began trending downward, and the economic recovery after 2008 has hardly affected this trend. By comparison, whites income plateaued between 2000 and 2008, dipped down with the recession, but has since more than restored what was lost. This is also true, although at a constantly lower level and to a lesser degree, for Hispanics.

I’ve picked out three periods to compare what has happened to white, black and Hispanic incomes: 1980 to 2000, 2000 to 2007, and 2008 to 2015. In the chart below, I’ve posted the absolute dollar amount of change in real median income over the period, and the percentage.

Real Median Income Increase and % Increase
PERIOD: 1980-2000 2000-2007 2007-2015
Total Population $9,272 (19.11%) -$367 (-0.64%) -$907 (-1.58%)
White (non-Hisp.) $10,697 (20.53%) -$9 (-0.01%) $169 (0.27%)
Black $11,341 (38.46%) -$2,059 (-5.04%) -$1,873 (-4.83%)
Hispanic $8,251 (22.06%) -$1,349 (-2.96%) $848 (1.91%)

What we see is that the first 20 years of Reagan-Clintonomics were quite good to all groups, and were especially good to blacks. Their 38.5% growth in real median income was not enough to bring African Americans up to white levels, or even to Hispanic levels However, it did reduce inequality somewhat; in 1980, black median income was 56.6% of white income and 78.9% of Hispanic income. By 2000, it rose to 65% against whites and 89.4% against Hispanics. But after 9-11, the economy seemed to stall; white income remained essentially steady from 2000 to 2008, while black income fell 5% and Hispanic income fell 3%. From 2008 to 2015, white income ticked up a little (0.27%), while black income fell another 4.8%. Hispanics, by contrast, gained some ground with a 1.9% rise. As of 2015 then, black median income relative to whites was back to 58.6%.

In Newtonian physics, every action has an opposite reaction. And we should expect something similar in political economics. Despite the fact that whites on average haven’t lost much since 2000 and may now be befitting once again, economic anxiety amidst some portion of the white population arguably is fomenting a populist wave, of which Donald Trump and Bernie Sanders are the first surfers. (This anxiety may reflect the large and increasing gap between the incomes of those with college degrees and those without them; whites with degrees would probably be shown on the Figure 1 chart as being very close to Asian median income, given that Asian adults have a high 54% rate of college graduation. Whites without degrees probably would come in close to Hispanics, who have a 15.5% adult rate of college. Interestingly, black adults have a higher college rate than Hispanics, 22%) But it’s quite apparent that blacks have been much more severely affected than any group by the post-2000 breakdown of the Reagan-Clinton1 economy. We clearly expect by now to have seen a political response from the black community. What could that be?

I would suggest that we are now witnessing this response in the official Black Lives Matter organization, and more importantly, the “movement” of activists, organizations, writers, and academics behind and aside it. The BLM organization was formed in 2013 mostly as a response to the Trayvon Martin killing in Florida and the subsequent acquittal of the man who shot him, a housing guard named George Zimmerman. BLM appeared at first to be a response to the rising awareness of police violence and killings of African Americans that resulted from the increased availability in recent years of cell phone video recordings and their distribution via sites such as YouTube. The “greater BLM movement” however subsumes a wide variety of increased vocal assertiveness along with community protests led by black intellectuals and community activists. Some observers go so far as consider the civil disturbances that have occurred in the past two years in Baltimore, Fegruson MO, Milwaukee, and now Charlotte NC as part of the “BLM movement” (although to be fair, the official BLM organization does not publicly support violence in response to police killings), along with the increasing assertion of “institutional racism” by black leaders and thinkers as the root of all black injustice today.

The renewal of frequent black protests and urban civil disturbance today remind me of the black political movements of the 1960s, which grew to become quite strong and significant. Still, it may not seem apparent on first look that BLM is calling for an overall social, political and economic response to the generally declining opportunities for blacks that today’s economy offers. On first blush, BLM seems focused mainly on ending the racial injustices foisted on blacks by the criminal justice system, and gaining reforms and recompense for these. However, a recent vision statement released by a new coalition called the Movement For Black Lives (which was motivated and driven by BLM leadership) shows that BLM is now thinking much bigger than that.

The Movement for Black Lives web site presents a “Vision For Black Lives” with a very detailed and well informed platform outlining a wide variety of new programs, policy changes and legislation, going well beyond criminal justice reforms. MBL clearly lays out a comprehensive vision for a different world. Many of its demands are quite similar to what Bernie Sanders had proposed in his campaign. But others are quite radical. Perhaps the boldest set of recommendations involves reparations to African Americans for many decades of slavery, segregation and injustice. The first reparation demand involves free college education to every African American; this is not far from Sanders’ proposals for free college.

However, the “Vision” then demands cash payments individually to all blacks, along with additional federal subsidies to local black institutions. Ta-Nehisi Coates has been promoting this idea in his writings and talks for several years now. But quite imaginatively, MBL goes even further in demanding that every black individual be granted a guaranteed minimum livable income, called a “Universal Basic Income”. The UBI would not be means tested nor does have any work requirements. How would the UBI be paid for? According to the Vision, the revenue saved from divesting in criminal justice institutions could be pooled into a fund for UBI. I.e., get rid of all police departments, investigation organizations, prosecutors offices, jails and prisons and use the money instead to give all black people an automatic income for the rest of their lives.

BLM and “the movement” demand all of this as reparations for past sins, for current injustices by the criminal justice system, and for “institutional racism”, a latent but nonetheless effective form of racism that most whites and arguably other people involved in “the institution” suffer from. Claims like this have readily been accepted by some portion of educated whites, but such assertions also confuse a lot of other whites . . . what is this “institutional racism”? Just who is doing it and how, other than some police officers making bad decisions and showing aggressive tendencies in tense situations? Yes, I know about the war on drugs and the rampant levels of incarceration of the past few decades, and the terrible effects these policies have had on many African American communities.

However, it takes a while to explain these things alone; to move beyond them into more extensive forms of “institutional racism” gets more and more difficult. And non-college educated whites probably aren’t going to appreciate the subtleties over mortgage insurance policies and sentencing mandates, if they take the time to listen at all. It’s not like the 1960’s, where Rosa Parker was denied a seat at the front of the bus, or Bull Connor directed a violent police response to peaceful protests, or James Merideth was denied admission to the University of Mississippi or George Wallace blocked the entrance way to the University of Alabama.

[FOOTNOTE: In the non-economic arena, I found an interesting vision of social re-arrangement on the BLM web site: “We are committed to disrupting the Western-prescribed nuclear family structure requirement by supporting each other as extended families and ‘villages’ that collectively care for one another, and especially our children to the degree that mothers, parents and children are comfortable.” I can sympathize with the sentiment here, but it sounds a lot like the various utopian dreams from the past that never could be practically achieved in the real world.]

Back to political economics: It is possible that racism is the stronger driver of Trump’s rise and his ongoing support; and yet this racism might to some degree have been augmented and exacerbated by white confusion and disagreement with some of the more abstract claims being made by the BLM/MBL movement. Again, the ongoing suffering that blacks have experienced is not in question. But as to arguing that continued black suffering can be explained by theories regarding on-going, deeply rooted institutional attitudes which are difficult to exemplify (outside the criminal justice arena) is a harder sell to many whites . . . especially after a half-century of governmental anti-poverty and anti-racism policies and liberal family support (which was severely cut back by Bill Clinton’s Personal Responsibility Work Opportunity Act of 1996). If asserted with sufficient vigor, these claims can be inflammatory and can inspire heightened racial tensions amidst whites — again, I’m NOT claiming that this white response is justifiable, but I feel that it helps to explain some aspects of today’s “political economy”.

Therefore, while BLM and its growing movement increasingly asserted itself in 2014 and 2015, both academically, oratorically, and kinetically (in terms of protests both peaceful and violent), it may have inadvertently set the stage for the appearance of a “politically incorrect” messenger amidst the lower income / lower education sectors of the white population. I will repeat the political economy equivalent of Newton: for every strong force causing an action, there will be an opposite reaction. Some call it “backlash”.

Recall that many people believe that Trump himself did not at first expect the success that he experienced in the GOP primaries. The reception that Trump’s anti-immigrant, anti-progressivism message obtained surprised almost everyone, including Trump. That surprising reception could have been inadvertently fueled by BLM, which itself is inadvertently fueled by the economic decline that blacks have experienced since 2000. So perhaps the racist aspects of Trump’s success is, in some way, a manifestation of the the political economy after all.

The median income numbers themselves hint that Trump’s popularity is not directly and not entirely based on economics; again, on average, whites did not lose much because of the Great Recession, and they are now experiencing renewed income growth. Again however, the portion of white adults without college degrees (about 64%) are probably experiencing below-average income trends, and have not yet regained what they lost since 2000. Admittedly, they haven’t experienced the degree of losses that blacks have; but their families mostly remember a continuing increase in standards of living since the middle of the 20th Century, and so losing ground is a new and distressing experience. Blacks, by contrast, have not experienced gains except in the 1960’s and in the 1980-2000 period, and thus may be a bit less surprised to experience renewed losses in income levels. Once again, I am not trying to justify “the new white anxiety” here, I’m trying to explain it.

The Movement for Black Lives platform is quite a radical vision. Nonetheless, it represents a commendable attempt to capture and re-direct the energy that is being expended on the streets every time a police shooting of a black victim is reported. Given just how much blacks have been disadvantaged by the economy over the past 15 years, it is not all that surprising that the emerging black vision for a new political economy is the most radical one.

Even though the next President, Hillary Clinton (“Clinton2”), will probably support some parts of this visionary platform, most of it is well beyond political feasibility at this point. The reparation claims and the institutional racism justifications may well feed into the racial animus that helps to propel Trump’s populist wave. But if it the BLM/MBL vision were universalized and the exclusivity of black reparations and claims of institutional racism were toned down (and supplemented by claims of anti-poor classism), and if many whites and Hispanics continue to experience falling income levels akin to what blacks have endured since 2000, then at some point we might see demands quite similar to these taken up by future Bernie Sanders and even future Donald Trumps.

Overall, I believe that John Judis is right — America is on the verge of some big changes right now. And big changes do not always go well; some revolutions are quite beneficial (the long-run success of the American Revolution would probably have surprised the Founding Fathers, versed as they were in Roman history), but many others bomb-out at some point and cause their share of chaos along the way (Venezuela being the most recent case in point). Were Trump to be elected, I’m sure that the nation would survive, but there would certainly be much chaos and lost opportunity for real progress (especially as BLM and MBL expand their demands for radical social and economic changes — Trump and his supporters will generally not be very sympathetic).

Hillary Clinton will have her chance over the next 8 years to repair the political economy that her husband inherited from his Republican predecessors and which he modified so as to gain long-term public acceptance. If vigorous long-run growth could be restored, then arguably the income trends for blacks, Hispanics and lower-income whites would start looking much better. If Ms. Clinton fails . . . then many forces will be turned loose, and some major changes will be coming to the political economy. Will justice be achieved? Or will it get ugly? Stay tuned!

◊   posted by Jim G @ 4:33 pm      
 
 


  1. Jim, Well, once again, I hate to say it, but I’m confused. With all due respect I tend to think that (maybe you said this at some point? can’t find it where I tho’t it was) this whole business of trying to attribute “the Black Version” to economics is a “stretch”.

    I find it difficult to attribute much of what is discussed in the “Revolt against Reaganomics” (White or Black Versions) to economics. It would be nice if what is going on COULD be attributed to “a revolt against Reaganomics” as it would make everything so much simpler. Unfortunately, I don’t think economics is at the root of what is going on in today’s present day presidential campaign and/or the “Black Lives Matter” movement or the “Movement for Black Lives”. I think that the presidential campaign is the REAL issue presently; so I’m going to restrict my comments to that, not to the BLM or the MBL. These last two movements seem to me to be a world apart and deserve their own special discussion.

    And I cannot help but note that today (after your post went up), news came out that Donald Trump has avoided paying ANY taxes whatsoever since back somewhere in the 1990s, I think; I also heard one estimate that he would also not have to pay any taxes for the foreseeable future! Actually, I’m waiting for more information to come out regarding this “taxes” issue as I’m sure only the surface has made news today. I wonder what this next week will bring regarding Trump and his taxes. Well, now perhaps I’ve ruined my own point as that surely IS an economic issue. Seems I’ve paid more in taxes in my entire life than Donald Trump has; he’s “RICH!” (and in the 1%) and I’m NOT “RICH” (and in the 99%). Something’s wrong with THAT picture. But that’s for another time.

    Back to your post: Further, I think that there’s a mixture of one “said” thing and one “unsaid” thing here. The “said” thing is: in the “Black Version”, where an attempt is made to attribute the dissatisfaction of Blacks to a serious difference in income from that of the Whites and Hispanics, to say nothing of the Asians. I think it’s vastly more complex than that.

    The second thing (and this one is “unsaid” here), as I see it, is (what’s the right word?) “genderism? Put more succinctly: The high anxiety that men in general (both black and white/white and black [whichever order one prefers]) experience at the very THOUGHT of handing the presidency over to a woman.

    Another thing: I’m going to say right out here that I have lived with a Black man (and I’m White) for 15 years; so I think that I have a kind of first hand reference to at least one Black man’s view of what is aimed to be a discussion of economics here. He doesn’t care about economics at all. What he IS interested in is income level. He will NOT speak about slavery, he will NOT discuss anything “black/white”; but he DOES care about the injustice of income levels. While his view may be myopic (and maybe it’s really not; maybe he just doesn’t want to discuss every issue with me), the bottom line is he DOES care about income levels and job availability.

    Furthermore, I tend to think that right below the surface of this discussion of these last two posts is: 1) What to make of the current candidates for the presidency? 2) What to make of a WOMAN becoming president!

    It would be nice if the discussion of the current election campaign could be boiled down to economics, but I sincerely doubt it can be; as I say, I think somewhere in here you call it a “stretch”. (If you didn’t call it a “stretch”, I will call it that.)

    The Black man I know has no intention of voting for Trump. He sees him as a man who he simply does not like and won’t vote for him. Yet, strangely enough, often he has a tendency to follow a lot of Trump’s “tricks” used against Hillary, specifically: When preferring to avoid an issue, this man indulges in the constant interruptions and change of subject that Trump is so good at. I find that Hillary’s ability to keep track of what she wanted to actually SAY in the last debate was a feat of sheer will and intelligence (how great in a candidate for president) as constant interruptions are only too likely to make one forget what one wants to say. “Name calling” this Black man avoids.

    But I must say that “name calling” is restated by most men in what I call, “man-speak”. Specifically: And here, once again, I must refer to my own experience as a woman: My brother (who prides himself on being accepting of women and certainly NOT prejudiced against them in ANY way) recently had occasion to call me a “take-charge gal”. I gave it some tho’t because something about the term and the context in which it was used bothered me; I wondered if it meant what I tho’t it meant. So, I asked the Black man I’ve been living with what in “man-speak” a “take charge gal” REALLY meant; did it really mean a ‘bossy b****’”? And the answer I got was a hesitant, reluctant, but definite, “yes”. Ahhhh! How did I know?

    And there you have it hidden under nice words: Genderism from a man who prides himself on his LACK of genderism. And “Trump-ism” from a man who does not care for Donald Trump at all.

    Then too, I can still see that man about 50 some years old who handed Donald Trump his Purple Heart standing on the stage after he handed the medal to Trump. (Donald Trump so proud to getthat medal, saying, “I always WANTED one”, not I always wanted to EARN one and didn’t seem to notice the difference.) That man seemed kind in his way; yet I’d sincerely doubt that economics was anything on his mind at all.

    No. I tend to think that what is appealing about Donald Trump is that he actually DOES express TWO things that raise serious anxiety levels in some people:

    One: The very high levels of anxiety that White PEOPLE (men AND women!) have at becoming (horrors!) “a minority”. He’s giving expression to exactly the point that so hits a nerve in white people (male and female). What if we are no longer the MAJORITY!? (Gasp!)

    Second: I think the major problem is that Clinton is a WOMAN! A double whammy for ALL men (Black and White, and maybe even more than a few women who buy in to the “subservience” of women). What will we DO with a woman president who we KNOW to be a “TAKE-CHARGE GAL”. An unpleasant tho’t to have a “bossy b****” as president.

    Yet, today I read in the Chicago Tribune (that long-time bastion of Republicanism) an article (here reduced to a few words) about Hillary by Eric Zorn: While he mentions her faults at some length he finds in all of them “no harm” and/or “no foul”. He also mentions what good might come with her as president: “Focused. Serious. Even-tempered. Moderate. Tough. Upright. Incremental. Bipartisan. I say: Not bad.

    Let me get finally to an answer to your question: “[W]hether the political responses to Reaganomics of the black community and its leaders have in any way fed into the white racial anxieties that Trump seems to have drawn much of his support from”. I say, “No they have not for the reasons given above”.

    I do not mean this to be a harsh or snide or in any way disrespectful response to your well-thought-out post(s). It is full of information and important in a context of economics. Unfortunately, I do not think that a context of economics applies here; but then when it comes to writing this comment, I may just be a “take-charge gal”. MCS

    Comment by Mary S. — October 2, 2016 @ 2:54 pm

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