Robert Johnson

Robert Johnson, the founder of Black Entertainment Television, made a splash and told CNBC recently the U.S. government should provide $14 trillion of reparations for slavery to help reduce racial inequality.

The wealth divide and police brutality against blacks are at the heart of protests that have erupted across the nation following last week’s killing of George Floyd during an arrest in Minneapolis. “Now is the time to go big” to keep America from dividing into two separate and unequal societies, Johnson said. Calling reparations the “affirmative action program of all time,” Johnson said they would send the signal that white Americans acknowledge “damages that are owed” for the unequal playing field created by slavery and the decades since with a “wealth transfer to white Americans away from African Americans.” See Robert Johnson in action in the following video:

There have been many folks to show the case against reparations – see here and here for just a few, but a quick summary is as follows:

  • One can not pass the sins of the father to the sons.
  • Many non-African Americans were not even around at the time of slavery – so just who should pay?
  • Who do you pay reparation to – many African Americans are not 100% black – percentage payouts? 
  • The government has already paid out an enormous amount of reparations – should we get a discount?
  • The inherited wealth of systemic white benefits is largely overstated – see No, Slavery Did Not Make America Rich
  • What of other effected groups – should they get reparations too?

There are many counter rebuttals, and the discussions can be endless. Perhaps you can think of more, but this is not the point of this article. Let’s assume for a moment that America did decide to do what Robert Johnson suggest and implement slavery reparations. Let’s also assume there would be no (a big assumption) backlash against the African American community over such payments that could make the payments problematic and of little effect. After all, in lieu of the reparation payments, then all Affirmative Action programs would end immediately – correct? The Right Wire Report asks just what would the African American community look like in 5 or even 10 years?

Johnson said he arrived at $14 trillion by figuring $357,000 for each of the 40 million African American households. He said this wouldn’t be a lump sum, but a figure that could be paid out over 10, 20, or 30 years. But I suppose it could be a lump sum. But let’s look at several scenarios:

Reparations paid out over 10 years – this would mean every African American household would receive $35,700 per year for each of the 10 years tax-free (we assume). This is not far from the current Black Median Household income (before tax) of $41,361 today. So basically, this would double African American household income. But this assumes that African Americans would not just take the money and quit their work and enjoy – the future of 10 years for some can be a lifetime. There have been many studies around the dependencies of giving out income over time – such as Universal Basic Income – see here. The results are often disastrous. After the 10 years, African Americans very well could be in a worse position than before, though a fun, easy 10 years. There will be a few, maybe even as high as 20 to 40 percent, that could manage well and improve their lot in life with this boost. 

Reparations paid out in a lump sum – imagine working at some mediocre job and then all of a sudden, “boom,” $357,000 is in your bank account. One could use the money to invest in a small business, buy a house or a car, etc … A nice boost. What studies could we find to see what happens when people receive such a win fall? Well, it’s quite a bit like winning the lottery. How do lottery winners make out? According to multiple studies, about 70% of all lottery winners end up going broke and filing for bankruptcy. Ouch!

Reparations managed by government – in other words, the government will tell African Americans how to use their reparation payments. The government could create all kinds of wonderful programs for business creation, education, and all kinds of goodies on behalf of African Americans. Also all kinds of ways to take your money. Hmmm … “I am from the government, and I am here to help you.”  One would suggest not take this option, but it would the African American choice. Our take is that few would benefit from this choice, but make a few a lot of money. Good luck with this option. 

The summary of these options is not good. Yes, a few years of good times, followed by hard times. Money given as a win fall and not slowly earned by the immediate works of your efforts inevitably will not give the self-education needed to maintain the social-economic class. Furthermore, after 5 to 10 years, as time passes, getting back on the self-reliant path gets harder and harder at the end. There may be a 20 to 40 percent that may see longer-term benefits, but those African Americas already exist and are successful. The reality is that after the initial $14 trillion in reparations, after 10 years you would need another $14 trillion – in perpetuity. Something we mostly do (or are trying to do) already.

Given the already problematic idea of reparations, the implementation will be even more disastrous. Forget the past, becoming self-reliant, and use the free market of iron sharing iron to achieve success is the only way forward. Something Leftist won’t allow to happen.

image RWR original article syndication source.