How Cory Booker’s “Baby Bond” Proposal Could Transform the Reparations Debate
Cory Booker, one of a half-dozen Democrats routinely mentioned as a Presidential contender, is a man of singularly intense enthusiasms. He is a vegan and, after a Rhodes Scholarship and finishing Yale Law, he famously moved into the Brick Towers housing project in the central ward of Newark, from which he would, before his thirtieth birthday, launch a political career, winning a seat on the municipal council. By his mid-thirties, he was the mayor of Newark and the star of a documentary and a docuseries, appearing as the young crusader who would rescue Newark’s politics from a corrupt machine. His story often seemed like a peculiarly American parable about the ways in which racial progress in the inner city and the liberations of financial capitalism might fit together, hand in modernizing hand.
At times, the story went awry. In 2010, Booker reimagined the Newark public-school system in partnership with Facebook’s Mark Zuckerberg, who contributed a hundred million dollars for a fascinating and ambitious project that alienated many educators and left the city’s schools in about the same place. Two years later, he founded an Internet startup, called Waywire, with funding from tech moguls, including Google’s Eric Schmidt. Financial disclosures later revealed that Booker’s stake in the company had dramatically increased his assets. To these backers, Booker may have seemed like an investment himself. When I interviewed him during Obama’s ascent, Booker explained, with self-awareness, that, beginning when he was in grade school, he had been told that he might someday be the first black President.
Booker is now forty-nine, and in the past year his political career has entered a new phase, in which he has become one of the most effective campaigners in his party. He spoke in twenty-four states during the midterm campaign season and worked, with particular effectiveness, to help turn out black voters across the South, buttressing historic campaigns in Virginia, Alabama, Georgia, and Florida. Booker’s stump persona can tend toward the saccharine—in the Trump era, he has spoken often of the need for a “politics of love”—but he has represented the future for so long to so many that he can channel hope more ably than most of his rivals. (“Booker had the room silently mesmerized at some points and won roaring standing ovations at others,” a recent report from Iowa said.) Although he has become the Democratic Party’s most prominent advocate of criminal-justice reform, and its most insistent critic of racial bias in the justice system, his presumed, but undeclared, Presidential candidacy has seemed to rest on his broad emotional gestures—he’s the mayor who once rescued a woman from a burning building, the senator who, in releasing sealed public documents about Brett Kavanaugh during the Justice’s confirmation hearing, declared, “This is the closest I’ll come to an ‘I am Spartacus’ moment.” Often, it has been easier to see the character than the vision.
When I met him last Tuesday afternoon, in his Senate offices on Capitol Hill, Booker seemed to have an idea for a remedy. He is tall and muscular, with blue eyes and broad shoulders, and, as he settled into a red armchair, he twisted his frame slightly so the chair could accommodate him. Over his desk is a framed map of Newark’s central ward, where he still lives when he is not in Washington. “I’ve lived the last two-plus decades in a low-income area, an area of our country that’s below the poverty line, and I see people work hard, work forty, fifty, sixty hours a week, which makes me want to support policies like raising the minimum wage, health care, and the like,” Booker said. Such policies have been the core of the Democratic agenda for generations, but Booker has come to see their limitations. “They are not helping people get ahead,” he said.
There was a deeper inequity that those programs could not touch, Booker went on, which was that “wealth disparities in our country are growing and growing,” and they are particularly acute between whites and blacks. The average black family has wealth of about seventeen thousand dollars, while the average white family has wealth of about a hundred and seventy thousand dollars, according to William Darity, a professor of public policy at Duke. During the Obama Administration, Darity concluded that his preferred remedy, direct reparations to African-Americans, was not politically feasible. So he and a colleague, Darrick Hamilton, of the New School, began modelling a proposal to provide a trust account to each American child. The idea had been kicking around in liberal policy circles for years—Gordon Brown implemented a version in the United Kingdom, and Hillary Clinton proposed one in a speech in September, 2016—but Darity and Hamilton wanted a “birthright endowment” big enough to begin to reduce the wealth gap and its adverse effects on African-Americans. They tilted it so that vast benefits would flow to the children of the poorest Americans, allowing them to pay for college or a new home, and only modest ones to the richest. They developed a program that could meaningfully change the distribution of wealth in the United States.
For Booker, who has long been allied with hedge funders and tech titans, Darity and Hamilton’s emphasis on the relationship between race and wealth was a gift, because it gave him a way into the debate about inequality. At the end of the summer, a Booker aide named Chad Maisel worked over the details of a proposal modelled in part on Darity and Hamilton’s work. “I beat up on him so much,” Booker told me in his offices, grinning and gesturing at Maisel, who was sitting quietly on a couch. “Every week I was, like, ‘Where’s my big idea?’ ”
One of the many ways that the Democratic Presidential primaries of 2020, with their dozens of plausible candidates, will differ from those of 2016 is that the Party’s ideological camps are less fixed. The left-wing insistence that inequality and billionaire influence pose a real threat to American democracy, and that big ideas were needed to fight that threat, has seeped through the Party, so that even more mainstream Democrats, such as Senator Kirsten Gillibrand, of New York, and Booker, have signalled their interest in versions of a federal jobs guarantee. If the expectation had been that the Party’s left wing would be stronger in 2020, then the new complication is that its ideas—particularly those that have followed in the wake of Thomas Piketty’s revelation of how much the gains of capital have outpaced those of wages—no longer belong to leftists alone. “I think the Piketty effect has been profound,” Darity told me. “People were saying his book was Marx’s ‘Capital’ for the twenty-first century, which isn’t true. But it may be Keynes’s ‘General Theory’ for the twenty-first century.” Keynes helped to orient the Democratic Party for a generation.
In the “baby bond” proposal that Booker announced as a bill this fall, the government would create a trust account containing a thousand dollars for each infant. Each year, the Treasury would add as much as two thousand dollars, depending on the child’s household income, so that by adulthood the children of the poorest families would have a nest egg of nearly fifty thousand dollars. The money could be withdrawn only to buy a house or to pay for higher education or professional training. Booker estimated the cost of the proposal at sixty billion dollars a year, and said that he planned to pay for it by, among other things, raising estate taxes back to their 2009 levels and then raising taxes on the largest inherited fortunes—those of more than eighty million dollars—further still. Democratic policy has long taxed the wealthy to pay for social programs (schools, health care, jobs training) that enable social ascent; Booker is proposing a more direct conversion of wealth of the rich into wealth for the poor. His plan is not as precisely targeted toward people of color as it might be: because the federal government cannot determine the value of the assets held by any given American family, the amount children receive is determined by their parents’ wages, a scale on which black families tend to appear better off than they actually are. Even so, Booker’s staff has calculated that the average white child would accrue about fifteen thousand dollars through the program, and the average black child would gain twenty-nine thousand dollars—making it the largest asset for most black families.
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