Interesting
column in today's newspaper. The eminent (and now well into his dotage and a
bit odd) Thomas Sowell, a Far Right
African American and PhD economist ( you thought Clarence Thomas was the only
one?) announced that he knew why young African American males have a relatively
hard time finding jobs. He also knows why so many homes were lost in the recent
recession. After reading the headline I
was wondering to myself what piece of brilliant theoretical economic brilliance
was about to be revealed . He blames the
"Liberal Left" for high unemployment among young Black males in the same
breath that he blames them for the loss of homes during the recession, which in
an incredibly false implication he infers were disproportionally Black .
As an
economist, Dr Sowell should be ashamed of himself. His theory goes something
like this: Liberals encouraged banks to make more money available so more
Americans could afford homes. Period! This was an effort to reverse a long standing
policy which generally required blacks
to actually be better qualified that whites (on national average) for home
financing. Per the good Doctor, this was
a conscious effort to get people to buy homes they couldn't afford and force
banks to lend them money they couldn't pay back. Of course, this was the
Liberal Left, doing a "feel good" to get Black votes. The huge, as in
Exxon Valdez sized, hole in this argument is that in blaming the Clinton
administration for trying to put more qualified buyers in their own homes, he
ignores the actual villains here, the banking houses which did two irredeemable
things.
First, their personal banking branches and independent
mortgage brokers using their commercial lenders engaged in shamelessly
predatory lending practices, encouraging far more than just minority borrowers
to buy far more house than they can afford on the premise that the market value
would continue inflating, ergo building equity. Sowell portrays this "over
optimistic, under- secured lending as
somehow the fault of some other entity than big banking and financial houses,
and implies that it hurt the poorer Black community disproportionately. This
isn't an exaggeration, it is an outright falsehood! The middle class,
regardless of color, were the real victims in the 2008 housing bubble collapse,
with the average family losing about 55% of the pre-bubble value of their home.
Far
from being poor minorities, many of those suddenly "upside down" in
mortgage debt were two earner families
who had been given mortgages in some cases amounting to a monthly debt service
obligation of over 30% of gross income. These house poor couples were
devastated by one partner's job loss or income reduction when the ship went
down.
Continuing the
blame game, Sowell ignores the fact that the wider banking collapse was due to
these super risky mortgages being "bundled" (again by rich banking houses) and treated as
if they were real money with the real value of the mortgaged property as
assurance of that value. When the housing market tapered off and lenders began
to smell signs of trouble it was too late, as the commercial banks and
investment houses ("Too big to fail", remember?) realized their bundled mortgages were barely
worth half of their alleged value. The rest , as they say, is history. Sowell
is well off the rails here in blaming the LL for what was actually banking houses
predatory lending practices, an attitude rather more Far Rightist than Liberal Leftish!
He also ignores the economic predations of commercial banks who simply lied and
said "Oh sure, these under secured mortgages are just like cash!" In neither case is there a Liberal Left conspiracy of blame to be had.
On the contrary, the persons most responsible for the fiasco are the same persons
who resisted and continue to resist reasonable financial market regulation, and
they aren't liberals!
In like manner,
Dr. Sowell has sussed out the real
reason for so many unemployed Black youths. You're not gonna believe this, but the real
reason that young men who made little or no effort in school , and in many
cases failed to either attend and consequently, to graduate, who show up for a job interview with
their pants at their knees with no command of or ability to use standard English, don't get
hired because the minimum wage is too high! I know, right? Who'd have ever
guessed that? Of course this is all the Liberal Left's fault, as I knew, knowing Dr. Sowell's
leanings, that it would be.
His logic is that back when the minimum wage was
very low (in his childhood, and he's 85!) young Black unemployment was in single
digits, therefore there must be an inversely proportional cause and effect
relationship between young Black male unemployment and the minimum wage. There are only about a gazillion reasons that
his comparison is so poorly expressed or based. Start with Sowell in his teens
being a lad in a farm based economy, where hand labor done by young poorly paid
men was available to many. Then consider that he began working as a boy at a time when more that 6
million American males were involved in WWII! Hell yes there were jobs. Add to
that the post war employment as the GI Bill channeled many returning GIs into
college vice the workforce (brilliant!) Also
consider the post war housing boom, much of which was manual labor driven. Also consider the jobs now available in the
American steel and automotive industries as many "Rosie the Riveters"
left the workforce to become Harriet the
housewife again. Moreover, the demand for new cars provided good paying jobs in
Detroit and environs, as the American Auto industry hadn't given away its world
dominance yet.
In subsequent
years this post war well of employment was drawn down by multiple factors: first,
the huge loss of auto industry jobs and concomitant requirement for more technical skills by
those lucky enough to retain their jobs.
Second, as farming continued apace in its march to agribusiness and the economy
of scale placed small farms more and more at risk, cheap low paid manual labor
jobs declined. Third, the construction boom eventually tapered off to a steady,
but slower pace. Additionally, the American steel and shipbuilding industries began their steep decline, to the point that Chinese steel threatens to take business from what already reduced production there is in the US.
And in what I
am sure Professor Sowell sees as a Liberal Left assault on America, the nature of work changed
radically from 1950 (when he was 20) to 2015. Modernization, computerization
and moving of jobs offshore have combined to all but eliminate low or non skilled opportunities in the workforce.
None of these is a "liberal plot," in fact, many of the corporate
profiteers (Walmart, Trump, Every clothing store in America, etc.) responsible
for the flooding of US markets with foreign made goods are anything but liberal.
Pity - such an inconvenient truth!
How, you say
does this relate to minimum wage? As it
turns out, as tech savviness and , in many cases advanced post secondary
training , becomes critical to obtaining employment which pays well, those who
lack it are relegated to service industry or what few manual labor jobs are left. Unfortunately,
for those of the Gen Xers who lack such training or skills, it means fewer low tech
jobs and more low tech employees. It's not the minimum wage that's the problem
here, it's the skill set.
So, instead of
whining about the Liberal Left's conspiracy to raise the minimum wage so that
those so employed can actually earn a living, Dr. Sowell should direct his comments
at those young persons, regardless of race or gender, who choose to leave high
school (should they attend) with no appreciable skills because, for whatever
reason, they (at least some of the Black ones, the group Dr Sowell references in this apollogia) have confused studying, learning, and becoming employable with "acting
white" and made that accusation a pejorative. Of course the alternative
for any young person who sees education as something to be avoided, is exactly
as Dr. Sowell describes it, high unemployment in that sector of the
population. Where Dr. Sowell gets it
diametrically wrong is in attempting to remove responsibility from the individual
and placing it at the feet of those who would help those who help themselves, by
increasing the minimum wage for those who work hard for too little income.
Shakespeare had
the appropriate response to Dr Sowell regarding Black youth underemployment,
when he had Cassius tell Brutus, "The
fault, dear Brutus, is not in our stars, but in ourselves."
