There’s plenty to celebrate in the December Bureau of Labor Statistics report showing black unemployment at 6.8 percent, the lowest ever since they started reporting the data in 1972.
President Trump tweeted out his excitement and, of course, took credit for the good news. Has there ever been a politician who didn’t take credit for good news on his watch (or rationalize away responsibility for bad news)?
The president’s detractors, of course, wasted no time in challenging him, pointing out that unemployment rates have been dropping since the economic recovery started, well before Trump took office. Trump, they say, is as responsible for this latest monthly drop as he is for the morning sunrise.
It seems to me quite reasonable for Trump to take credit for this. There are, indeed, positive things happening as result of his leadership — deregulation, a new tax bill, overall business-friendly policies, and rhetoric. These things create a business environment of optimism and confidence, which drives investment and increases demand for labor.
However, rather than obsessing about what particular politician to praise or excoriate for certain economic results, our discussion should be about policies and not about personalities. Let’s savor this news but not lose our sobriety regarding the great task before us in this community.
The latest 6.8 percent black unemployment figure sounds great for blacks. But not for whites. The white rate for December was 3.7 percent. Why should there be celebrations that the black rate is “only” 3.1 percentage points higher than the white rate? Why should there be a different economic standard for blacks?
Black unemployment rates have averaged twice the white rate since 1972.
Black poverty rates are around twice the national average.
Black income and household wealth have hardly changed, remaining a fraction of that of whites.
This is the conversation we should be having. When do all American citizens participate equally in our national economic cornucopia?
Donald Trump was onto something when he asked blacks, during the presidential campaign, “What do you have to lose?”
Trump is offering a mindset that blacks should relish. A completely new and different reality. The cultural and political reality that blacks have turned to for years — big government — is the reason these gaps persist. It’s time for something new.
Black unemployment peaked at 16.8 percent in March 2010 during President Obama’s efforts to recover from the 2007-2008 economic collapse.
But the irony is that the collapse was driven by government policies put in place to help low-income Americans to make housing purchases. Contrary to what Barack Obama pitched to the country — blaming business and claiming the problem was insufficient government and regulation — American Enterprise Institute scholar Peter Wallison has shown the opposite.
Government policies mandating higher quotas of mortgages for low- to moderate-income borrowers put an increasing percentage of subprime mortgages on the market. By 2008, according to Wallison, 56 percent of the mortgages acquired by Fannie Mae and Freddie Mac — the two massive government-backed mortgage companies — were in this category.
Then everything collapsed.
An ocean of new regulations on financial services, enacted as part of the Dodd-Frank Act, was the Democratic Congress’ answer to their own misdiagnosed analysis of what caused the collapse. As a result, we had a slower-than-normal economic recovery.
These are the discussions we need today. How do we get out of the big government mindset that has been a drag on our economy and has perpetuated economic underperformance in low-income communities?
In this context, Trump is right to boast. He is bringing badly needed new thinking on issues concerning low-income America. It’s already making a difference.