Reparations: Opening Up New Wounds?

The recent recommendation by an advisory panel that the City of San Francisco pay each of its Black residents the sum of $5 million to make up for past discriminatory practices in housing and employment has garnered widespread coverage.

Less clear is the magical methodology by which this panel determined the sum, let alone how the City of San Francisco is planning to cover the $50 billion that the New York Post estimates would be paid to the eligible recipients under this plan.. With the most recent municipal budget topping out at $13.95 billion , no one has said where these funds to redress past wrongs will come from as the City of San Francisco does not yet have its own fiat currency.

It also raises questions as to why the equivalent of more than three times the entire city budget should be paid to about 5% of its citizens when the city itself is projected to run a deficit of $768 million over the two year fiscal period 2023-2024 and 2024-2025.

Not to be outdone in social virtue chest-thumping, a California reparations task force has preliminarily recommended that the state give $223,000.00 each to all descendants of Black people living in California prior to 1900 to remedy discriminatory housing practices which occurred over four decades from 1933 and 1977 — a remedy that would cost California taxpayers about $549 billion, the conservative lawyer Hans Bader recently reported in the Washington Times.

This sum would be more than twice the $240 billion in total state expenditures outlined in the 2022-2023 Governor’s Budget. However, the task force pointed out that there are also other areas requiring its benevolent intervention such as allegedly discriminatory incarceration rates; redressing these wrongs would presumably entail squeezing additional boatloads of cash from the remaining California taxpayers who have not already fled to other states.

There is a surreal quality to these recommendations as they are merely suggestions offered by appointed panels and lack any legal authority. However, they do get widespread media coverage even though the nation as a whole does not support the idea of reparations.

A 2021 Pew Center Survey found that 3 out of 10 adults surveyed said that the descendants of slaves should be repaid in some way whereas nearly 7 out of 10 respondents said that no reparations should be paid. This broke out by race with 77% of Blacks being in favor of reparations and only 18% of whites favoring reparations.

Of those favoring some type of reparations, most thought educational scholarships would be helpful (82%), followed by financial assistance for businesses (75%), financial assistance for home purchases (72%) and cash payments (57%) — although $5 million checks would probably also be welcomed.

Any plan having such an obvious race-based focus purportedly aimed at redressing wrongs suffered in the distant past is probably not going to withstand scrutiny in the courts. Indeed, the U.S. Supreme Court has already ruled that race-based remedies may be permissible only when they redress the direct effects of the government’s owns discriminatory practices; otherwise they run afoul of the Equal Protection Clause of the U.S Constitution.

In Richmond v. J.A. Croson, 488 U.S. 469 (1989), for example, the Court ruled that the City of Richmond’s requirement that construction firms receiving city contracts award 30% of all subcontracts to minority-owned firms could not be justified based upon generalized assertions of past racial discrimination. In short, the harm complained of was too remote in time to justify upholding blatantly discriminatory practices.

Estimates for reparations programs that would pay all descendants of slaves or even all Black Americans regardless of ancestry carry enormous price tags which can vary by trillions of dollars depending on the criteria for eligibility and the methodology by which the payments are calculated.

Professor William Darity of Duke University, for example, has estimated that the price tag would be $10 trillion to $12 trillion with $800,000 going to each Black household. However, the sky is truly the limit depending on the benefits that the author of a given study wishes to confer on the recipients and could easily total $20 trillion or $30 trillion.

The obvious problem is that reparations have no logical end. People seeking to redistribute the nation’s wealth based upon perceived racial disparities are also free to seek additional trillions of dollars based upon allegedly disparate treatments suffered by a particular group in housing, business and personal loans, health care, incarceration, and so forth.

There is no real limit to the amount of goodies that can be sought from the bloated piñata that is the federal government. The fact that it currently has a debt of $31 trillion would not necessarily preclude it from adding tens of trillions to the tab, all in the name of social justice.