Lynn Parramore, Institute for New Economic Thinking: Here’s What Economists Don’t Understand About Race tells where Darrity has difficult with Obama’s rhetoric on on race.
“If you buy the black dysfunction story, then the key is for young black men to pull up their pants or the equivalent,” he says. “But that’s a very different policy from saying, well, we should assure all Americans a human right to work. Or even if we don’t talk about an employment guarantee, then at least the basic income guarantee.”
“If we’re concerned about black-white disparities specifically and we want to have a race-specific policy, then I think we have to start talking about a program of reparations [for slavery].” (Darity and his wife, Kirsten Mullen, are currently completing a book that details how a reparations program might be executed, due to hit the shelves by mid-2017). /blockquote>
And on Daniel Patrick Monyihan:
Many social scientists have sought cultural explanations for racial disparities, rather than the structure of stratification Darity proposes. For example, sociologist and former Senator Daniel Patrick Moynihan, Labor Secretary under President Lyndon B. Johnson, argued in his influential 1965 report, “The Negro Family: The Case For National Action,” that the high rate of families headed by single mothers was in large part to blame for economic inequality. Darity notes that this line of thinking has very deep roots.
The cultural argument has been an argument for deferred economic justice until African-Americans prove that they are worthy enough, something that white Americans and never required to do (see Trumpism).
What has fascinated me about the economics of inequality is that it is a fairly straightforward analysis of imperfect competition, which typically means that free-market competition has not in fact been allowed to happen because of political of cultural manipulation of market rules or economic political manipulation of supply and demand.
Monopoly is well-known to the public and increasingly so is oligopoly. Less well known are the opposites, monopsony and oligopsony that rig the labor market.
Least well known of all to the public are the mechanics of price discrimination, which is the economic form of racial discrimination. Denial of supply to a particular set of consumers results in raising profits on both sides of the discrimination line. Or in its -sonistic form instead its -polistic form, Denial of demand to a set of vendors or employees results in raising profits on both sides of the discrimination line.
All of this used to be Intermediate Microeconomic stuff.
Darrity, however is making a different argument, one that goes to inheritance (and not just through estates) of assets. His argument is that economic assets enable success, and they primarily come from parents. Systematic discrimination in the ability to build and pass on assets, through redlining or mortgage discrimination, or discrimination in openness to renegotiating loans–all characteristic of the underlying pattern of housing loss in the Great Recession is an example of how that discrimination in generating assets works. Unemployment and foreclosure start from the bottom among people who have most recently lifted themselves to a better economic situation, another way that minorities get caught in the downturn in greater numbers.
An economic approach to compensating for continued discrimination and political regulations penalizing discrimination, as well as continued cultural action de-normalizing ethnic discrimination might eventually undo 400 years of institutional racism, but only if agressively pursued over a period of time. The time to do that is now.