Bush's bad news on black wealth
HERE ARE some economics issues to consider on on Election Day. President Bush told a national conference for journalists of color in August, ''Judge me on home ownership in America.'' Bush went on to say, ''More minority families own their home today than ever before in the history of the United States of America. And that's a positive development for this country.''
Bush probably does not really want America to judge him. The small positive hides a huge negative. According to Census Data, 48.1 percent of African-American households own their own home. That is only a slight statistical improvement over the 44.4 percent a quarter century ago. Worse, there has been no closing of the gap between black and white households. In 1979, black home ownership was 24 percentage points behind white households. Today, it is still 24 percentage points behind white households.
Worse still, the wealth of African-American households is actually in decline, according to a new Pew Charitable Trusts study. Despite the recent recession, white household wealth has increased by 17 percent since 1996, to $88,651. Black household wealth dropped by 16 percent, to $5,988. Latino household wealth increased by 14 percent, but only to $7,932, not even 10 percent of white household wealth.
Even though white household wealth has gone up, there is plenty to think about, meaning that black folks might be more a warning sign for all Americans than an aberration. In a speech this weekend, Bush said, ''To help families and to get this economy going again, I pledged to reduce taxes. I kept my word. Because we acted, the recession was one of the shallowest in American history. Over the last three years, our economy has grown at the fastest rate of any major industrialized nation.''
What Bush really meant was that the economy for CEOs has grown at the fastest rate of any major industrialized nation. The average CEO compensation has risen to $8.1 million a year according to Business Week, creating a CEO-to-worker pay ratio of 301-1, according to United for a Fair Economy and the Institute for Policy Studies.
If the minimum wage tracked the rise in CEO pay, it would be $15.76, not its current $5.15. If the salary of the average production worker kept pace with the rises in CEO pay since 1990, workers would be making $75,388 a year instead of $26,899.
As for the great benefit of the tax cuts for average families. The middle fifth of all Americans saw average checks of $756. The top 1 percent saw average checks of $33,864. The check for the wealthiest 1 percent is worth a year and a half of the average tuition of private college. The tax cut for the middle American is worth two months of the average tuition at a public university.
That gets us back to the wealth gap. According to the Century Foundation, the average wealth of the top 1 percent of Americans has exploded since 1989, from nearly $8 million household to $13 million. The wealth of the next 9 percent of Americans is $1.6 million. The worth of the next 40 percent of households shrinks to $272,378. The worth of the bottom 50 percent of American households is $22,079.
According to the Century Foundation's review of federal and think-tank economic data, the tax cuts that Bush promises to make permanent if he is reelected are one of the biggest reasons the nation has gone from a projection of $5 trillion in cumulative budget surpluses by 2011 to a possible cumulative deficit of $4.4 trillion. The foundation estimates that Bush's tax cuts play more of a role than even defense and military spending.
Defense and military spending are 20 percent of the deficit. The downturn in the economy is responsible for another 35 percent. The tax cuts are responsible for 36 percent. The foundation predicts that the tax cuts will grow into an even bigger reason for the federal deficit, responsible for 44 percent of it by 2011.
On the stump, Bush says, ''To create jobs, we've got to be wise about how we spend your money and keep your taxes low.'' The Century Foundation's review says, ''The lurch into massive deficits represents a profound reduction in potential American-owned private investment.'' In two weeks, Americans will lean into the voting booth to accept or reject the rhetoric that promises average Americans the equivalent of a free school lunch, while the rich unfold their napkins for a five-star tax dinner.
Derrick Z. Jackson's e-mail address is email@example.com.