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Democracy requires general prosperity

Melvin B. Miller

With passage of the Civil Rights Act of 1964, it became illegal to discriminate in employment on the basis of race. As we well know now, that law did not eliminate racial discrimination in the job markets. Corporations and their astute lawyers battled against affirmative action plans for more than 50 years. Now we can see that limited access to high-paying jobs has retarded the growth of wealth for Blacks.

The average family thinks about the nice products or the better quality foods they could afford with greater income, but the real standard is what wealth they could acquire. They could afford to buy a home, which is one form of wealth, or they could save in an investment fund for their later years. These items are assets that determine their level of wealth. According to economic data, Blacks own only 12 cents in assets for every dollar in assets held by white households.

For many years, social planners were concerned about Black poverty. While some conservatives were willing to support steps by the government to abate poverty, the drive to correct the problem was never as great as it should have been. The major reason is there is an unstated belief that people are responsible for their own economic misfortunes, and conservatives firmly believe that they have no responsibility to correct the problem with the payroll taxes of the wealthy.

So the most that the poor can hope for are the benefits provided by underfunded poverty plans, and perhaps a free Thanksgiving turkey. But researchers at McKinsey & Company, an outstanding business research institution, has found that the wealth gap has a damaging effect on the national economy.

The question now becomes whether the impact of Black poverty on the economy is sufficient to induce policymakers to remedy the problem. According to the McKinsey & Company researchers, the loss of consumption and investment of $1.0–1.5 trillion over 10 years will result in a 4–6% loss of the projected GDP in 2028.

Unfortunately, this new economic revelation is unlikely to inspire help for poor Blacks. It has been well known for some time that there are twice as many whites in America living below the poverty level. Little help flows to them. Similarly, while the motto “Black Lives Matter” has attracted general attention on the issue of police violence, the police have shot and killed an estimated twice the number of whites than Blacks every year. These disparities have not affected policy objectives.

For some time it has been known that the spending of the average consumer generates about 70% of the GDP. The prevailing myth is that tax deductions are the economy’s motivating force. Trump’s recent tax cuts enabled investors to increase their corporate holdings but did very little to generate economic growth or improve the nation’s infrastructure. The McKinsey report is unlikely to inspire economic support for the poor.

Social planning, regardless of the plan, is bound to have some flaws and shortcomings, primarily because we humans have disruptive deviancies. We are afflicted with greed, envy, indolence and very often a bit of stupidity. And now we see that elements of the human family suffer from the affliction of racism, even though there is no scientific establishment of genetic impediments applicable exclusively to any specific racial group.

No matter how perfect a plan to resolve a social problem is believed to be, there must be continual assessments to uncover any flaws. The early determination that the plan is sacrosanct leads inevitably to social conflict. There are now a number of opposing attitudes that must be resolved if America is to survive as a democratic republic.

American democracy, U.S. economy