The fight for reparations can be a useful decoy in solving America’s racial wealth gap

Tuesday, May 2, 2017
The Undefeated

"William 'Sandy' Darity Jr., a Duke economics professor, and Darrick Hamilton, an economics professor at The New School in New York, came up with the idea for baby bonds.

Each newborn child would be granted a bond, a federally funded trust fund of sorts. The poorest child would get, say, $60,000, with the amount dwindling to nothing for the children of the richest families. The money would be put in an interest-bearing account that becomes accessible upon adulthood and could only be used for wealth-building activities, such as going to college or putting a down payment on a home. They figure the program would cost about $60 billion per year, which, Darity and Hamilton wrote in an academic paper, is “less than 10% of the non-war spending budget for the Department of Defense.”

Some might contend that baby bonds, by focusing on wealth rather than race, unsatisfactorily address a racial problem. But, Darity and Hamilton argue in their paper, “Since the distributions of white and non-white wealth are so disparate — 85% of black families have wealth holdings below the median white family — wealth can be an effective non-race-based instrument to eliminate racial inequality.” Darity told me he thinks baby bonds “could go a long way toward closing the racial wealth gap.”

The universality of baby bonds also gives it the potential to attract support from an interracial coalition of working-class people pursuing their own economic self-interest. Such a coalition could form a base that a political majority can rest upon. A poor white person in West Virginia would have as much reason to support this program as a poor black person in rural Alabama. Baby bonds might get people to appreciate their commonality with others who, because of race, rarely think of themselves as having the same interests."

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