Ms. Hannah-Jones interviews Duke University economist William A. Darity, one of the most prominent academic voices behind the $13 trillion number. Darity has advanced similar dollar amounts in his scholarly work, including a 2022 article in the Journal of Economic Perspectives. As with the Hulu episode, he offers this figure while eliding difficult questions about financing this redistributive payout.
Vaguely sensing that there’s no such thing as a free lunch, Hannah-Jones asks where the federal government would get the money to pay such a massive amount. Wouldn’t taxes have to be raised, she queries. Mr. Darity confidently asserts that no such action is necessary.
“It’s a matter of the federal government financing it in the same way that it financed…the stimulus package for the Great Recession” and the COVID-era CARES Act, Darity continues. To do so, the federal government need only “spend the money but without raising taxes.”
This verges on tooth-fairy economics.
This is from David R. Henderson and Phillip W. Magness, “The Tooth-Fairy Economics of Slavery Reparations,” American Institute for Economic Research, March 7, 2023.
Another excerpt:
If the Federal Reserve monetized the whole amount, base money, which is currency in circulation plus bank reserves, would increase by $13 trillion. M2, the conventional measure of the money supply, is 3.96 times the monetary base. If that relationship held, then increasing the monetary base by $13 trillion would increase M2 by 3.96 times $13 trillion, which is $51 trillion. M2 is currently $21 trillion. $51 trillion is a whopping 245 percent increase. So if the spending occurred all in one year, inflation would be about 240 percent. Critical Race Theory would unite with Modern Monetary Theory in an inflationary spiral.
Thanks to Jeff Hummel for checking our M2 numbers in an earlier draft.
Read the whole thing.
READER COMMENTS
Knut P. Heen
Mar 7 2023 at 11:10am
Bad news for the descendants of Genghis Kahn and Julius Caesar. Compound interests over so many years are tough to pay.
Monte
Mar 7 2023 at 12:49pm
Reparations is antithetical to the whole notion of personal responsibility. It and CRT are meadow muffins that should land with a resounding splat in a place where they can’t fertilize the seeds of discord.
The son shall not bear the iniquity of the father,… – Ezekiel 18:20
nobody.really
Mar 7 2023 at 1:08pm
Robert Nozick, Anarchy, State, and Utopia (1974) at 231.
Monte
Mar 7 2023 at 4:59pm
Nozick also argues (from the same book) that “only a minimal state limited to the narrow functions of protection against force, fraud, theft, and administering courts of law could be justified, as any more extensive state would violate people’s rights.” He only supported distributive justice if brought about by free exchange among consenting adults from a just starting position, and it is on this premise (the just starting position) that Ta-Nehisi Coates makes his case for reparations.
Coates falsely claims that “In 1860, slaves as an asset were worth more than all of America’s manufacturing, all of the railroads, all the productive capacity of the United States put together” and that this wealth “worked its way down to the current generation of Americans.” But even if we were to accept this at face value, Richard Epstein, in his piece, The Case against Reparations for Slavery (May 27, 2014) points out:
The sin of slavery, or any unpaid debt thereof, rests only with those who supported or practiced it. We could, like Oliver Cromwell, have the guilty disinterred, retried, and executed, but to what end?
Mark Z
Mar 7 2023 at 12:51pm
So she wants to recreate both the economics and politics of the Weimar Republic here in the US. What could go wrong.
nobody.really
Mar 7 2023 at 1:40pm
You can find the New York Times 1619 Project here. When I scan the text, I find that the word reparations appears exactly once, in this sentence: “‘June and I hope to create a dent in these oppressive tactics for future generations,’ Angie Provost told me on the same day this spring that a congressional subcommittee held hearings on reparations.” (And the figure $13 trillion appears exactly nowhere.)
I listened to it on Audible and found it interesting and informative–if sometimes repetitive. (That will happen when you have multiple authors addressing similar topics.) I didn’t get a lot out of the poems, but I especially liked the discussion of African American contributions to music. Give it a read/listen; you might like it.
JFA
Mar 7 2023 at 4:40pm
I only have access to the “Look Inside” view on the book’s Amazon website. On page 472 alone, the word “reparations” appears 7 times. The topic appears to take up quite a large chunk of the concluding essay (appearing on at least 9 pages of the 27 page concluding essay) and makes some cameos in Kendi’s essay. It is also mentioned quite a bit in the Hulu series.
cfbandit
Mar 7 2023 at 4:50pm
I too read the book, and this information is not in there. It is in the Hulu companion special rather than in the original project itself. (David, it would have been super helpful if you had noted this was part of the Justice episode! I had to go digging as I thought it might be from the capitalism episode.)
Ms. Hannah-Jones, to her credit, senses as a journalist that there’s problems with Darity’s argument of doing it all at once. Even CalMatters is looking at Darity’s input with a critical eye to the CA task force on reparations.
I suspect some move will be made to make reparations but a straight cash outlay financed is likely not the final solution even in a very progressive state such as California, much less than federal government.
Andrea Mays
Mar 7 2023 at 3:12pm
Floccina
Mar 7 2023 at 3:59pm
Would $13 trillion be about $320k per ADOS? That is my rough math. Why wouldn’t the amount be what would bring black wealth up to that of the median white citizen, I think about $60k each?
Knut P. Heen
Mar 8 2023 at 10:15am
I got the impression from the JEP-article that one of their approaches was to look at the wealth difference today between the groups, not the median but the mean.
David Seltzer
Mar 7 2023 at 6:38pm
Who is to pay reparations and who would be exempt? Do the descendants and of those who fought slavery and Jim Crow and often died, pay reparations and to whom? Do those disparate groups who supported the civil rights movement or registered voters in the South pay reparations? What constructive policies can be enacted that remove obstacles for black earners such as minimum wage laws?
Skip Mendler
Mar 7 2023 at 7:58pm
If one owes a debt that cannot be repaid, then one goes through a process called bankruptcy.
Floccina
Mar 8 2023 at 12:13pm
I don’t want to be rude but perhaps one way to fund reparations would be to allow ADOS sell or to rent their right to live and work in the USA. So they could move to another country and collect the money from the sale or collect the rent. My sister in law is a cardiologist in Honduras who like to come and practice in the USA, I think she would pay enough for someone to live on to get that right.
David Henderson
Mar 8 2023 at 3:05pm
What are ADOS?
Monte
Mar 9 2023 at 12:18am
American Descendants of Slavery.