Perhaps for the first time in many years, politicians are directly competing for black votes. This goes hand-in-hand with signs that black America is no longer monolithically supporting Democrats. For example, President Donald Trump’s approval rating among black Americans is in the mid-30s.
Enter Democratic presidential candidate Mike Bloomberg, who just launched his new plan for black America, the Greenwood Initiative, named after a site of both incredible black achievement and pain.
Bloomberg, speaking to a mostly white audience of only several hundred in Tulsa, Oklahoma, unveiled his plan’s three points. The plan is a perfect example of the failure of center-left policy concoctions meant to help black Americans, invariably cooked up by rich liberals.
Doubling Down on ‘Affordable Housing’
First, Bloomberg plans to create “one million new Black homeowners.” To accomplish this, Bloomberg would have the federal taxpayer offer “down-payment assistance,” and bring millions into the banking and credit-score system. He would also start “enforcing fair lending laws, reducing foreclosures and evictions and increasing the supply of affordable housing.”
Too bad we’ve already tried this, and it terribly hurt black Americans. Starting in the 1990s, under a dubious legal theory called “disparate impact,” so-called affordable housing advocates successfully sued banks when different racial groups received differing loan offers and rates. It didn’t matter that the underlying incomes or credit scores completely explained the racial disparity. As long as an overall racial disparity existed, lenders and insurers faced legal liability.
For home mortgages, for example, law requires lenders to report race and sex data. All the trial lawyers had to do was dig through the data, and they had a lucrative lawsuit.
Even when the law doesn’t require loan applications to collect racial data, lenders are at risk. Most recently, the Obama administration’s Consumer Financial Protection Bureau (CFPB) sought to go after auto dealers using disparate impact theory. But since auto loans don’t collect racial data, the CFPB planned to estimate a loan applicant’s race by guessing based on a person’s name.
The Trump administration put an end to the CFPB’s auto loan shenanigans, but that 1990s affordable housing push, heavily based on race, still ended in misery. To avoid a costly suit and bad publicity, lenders gave home loans to people who couldn’t afford them. People plugged a load of money into payments they could barely afford, and when the downturn hit, they had to walk away. The empty or foreclosed houses piled up and went into disrepair, hurting the home values of non-overstretched black residents in those neighborhoods. Because of this, the 2008 housing bust hit black Americans and mostly black neighborhoods the hardest.
Worse, the same idiots who engineered the massive “affordable housing” push turned around and blamed “predatory lending” when their plans hurt others. Of course, the government’s push for low-cost loans and predatory lending are two sides of the same coin. And the Dodd-Frank bill, which passed after the housing bust and included the creation of the CFPB, was written by the very people who had pushed for unaffordable loans before the crisis and took money from groups and companies that benefitted from the “affordable lending” push.
To avoid lawsuits or lending to people who are less likely to pay the money back, some banks avoid black areas altogether, which is called “redlining.” Redlining is illegal, but it can be hard to prove. So the disparate impact legal theory, heavily supported by Democrats and a boon to rich trial lawyers, may be one reason black America lacks access to reputable financial institutions.
Bloomberg has clearly never thought of the fact that if you give someone down payment assistance, they might not be able to afford the loan either. He also apparently ignored the effects of the 1990s affordable housing push.
What would help? The United States desperately needs less-restrictive zoning laws and the building of more starter homes. The homes built as of late have been disproportionately larger, partly due to the incentives builders face from regulatory, environmental, and zoning costs and restrictions. Instead, Bloomberg’s plan doubles down on something that has already been tried, and failed.
Empowering Trial Lawyers and Democrat Politicians
In the same vein, Bloomberg’s plan says he would fight “discriminatory practices by requiring companies to report on hiring, pay and procurement and collecting more complete lending data.” This sounds an awful lot like bringing disparate impact into businesses’ hiring and buying decisions. That would lead to reduced black employment opportunities and increased racial discord in the workplace — the primary area where Americans of different identities most often intermingle and interact, albeit imperfectly.
Some would wrongly see black men who earned their status as the beneficiaries of firmwide affirmative action. Companies would do all sorts of crazy things internally to avoid reporting embarrassing data, while actual racism or achievement gaps would remain.
The billionaire candidate would also make federal contractors and public servants, including police, take “implicit bias training,” and crack down on conservative states’ efforts to fight against voter fraud.
Hard-to-Navigate Programs in Black Communities
Next, Bloomberg’s plan aims to “boost Black-owned businesses” by setting up “user-friendly one-stop shops for entrepreneurs across the country.” He would also “expand mentorships and incubators, increase access to capital (both debt and equity), support Black-owned banks and expand procurement from Black-owned businesses.” The plan says these efforts would be “aimed particularly at benefitting Black female entrepreneurs, the fastest growing group of new entrepreneurs.”
But the federal government already has myriad programs aimed at minority and female business owners, and their efficacy is poor. What would Bloomberg do differently that isn’t being done now? Never mind the fact that most small-business owners are too busy running their business to navigate federal applications or the various programs available, which means these programs probably go to the connected.
Government is best suited to create an environment where businesses can succeed. If crime is out of control in black areas, entrepreneurs will suffer or stay away. If the infrastructure surrounding an area is dilapidated or there are no broader employment opportunities, such as a factory that offers middle-class wages, the entire business climate in that area will suffer.
On this note, Bloomberg does propose “$70 billion in funding and technical support towards a national initiative to turn around 100 of the country’s most disadvantaged communities, with a relentless focus on evaluation to expand programs that work.” That sounds good, but then the plan says, “Mike’s national initiative will offer communities a menu of evidence-based programs in areas including health, education, infrastructure and justice.” In other words, poor minority urban areas will get another fancy government or nonprofit building.
The Importance of Dads and Jobs for Dads
The plan is remarkable not for what it includes, but for what it doesn’t mention. The two things any community needs — white, black, or otherwise — is stable employment and good wages, especially for young men, and intact families headed by both a mother and a father. Racism exists, and it holds black Americans back, but the United States’ black community uniquely suffers because of the deficit of these two key ingredients to community success.
Where strong black families used to be the norm — from 1890 to 1950, black American women had a higher marriage rate than white women — the black family has been decimated. In 1950, only 1 in 10 black children faced fatherlessness. Today, more than half of black children suffer from fatherlessness. Yet a father in the home is one of the greatest indicators of future economic and social success.
One cause of fatherlessness among America’s working class, which disproportionately affects black Americans, is welfare’s steep marriage penalties, which took off in the 1960s and ’70s. Policymakers who deeply care about the racial gaps in our country should address these penalties.
About the same time the black family was falling apart, America was also rapidly de-industrializing, especially in the ’70s. This de-industrialization disproportionately hurt black men, because black men were disproportionately working class. Evidence suggests that among factory towns, black communities were the first to de-industrialize as crime spiked and families fractured.
One must only drive through the historically black areas in cities such as Detroit or Milwaukee to see the effects of this de-industrialization many decades later. Business parks are empty. Young men, warehouses, and factories stand hollowed out and idle. Yes, these communities need more infrastructure, but the type that makes it easier once again to produce goods in black areas — not another fancy, government-funded nonprofit.
The bottom line is that not every young man should go to college, and where many white, rural areas have at least some middle-class opportunities for these young men — in agriculture or construction, for example — these opportunities are even fewer in urban, black neighborhoods. In addition, because of the lack of dads, too many American men lack the soft skills needed to obtain and hold these limited jobs.
Without employment opportunities for young men, a community will always suffer. The men will be less marriageable. Lawbreaking, systemic poverty, and fatherlessness will vastly increase. This is true for black America, but it’s also increasingly true for pockets of white, working-class America. Bloomberg and the modern day Democratic Party clearly haven’t figured this out. But the politician and party that figures it out will obtain not just the black vote, but command the American political landscape for decades to come.