Misleading Words
by Thomas Sowell
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by Thomas Sowell: Obama's
'Balanced' Approach
Many years
ago, the Saturday Evening Post was one of the best-known
magazines in America. But somehow I learned that the Saturday Evening
Post was actually published on Wednesday morning. That was a little
disconcerting at first. But it was one of the most valuable lessons,
that words do not necessarily reflect reality.
Recent statistics
on the average wealth or net worth of blacks are a painful reminder
that rhetoric favoring blacks does not mean that politicians using
such rhetoric are actually helping blacks. The media seized upon
the statistics published by the Pew Research Center to show that
whites averaged far more net worth than blacks, and that this disparity
was now greater than it was in years past. But what is even more
revealing is that the net worth of blacks in 2009 was less than
half of what it was in 2005.
What happened
to cause such a sharp loss in such a few years? After all, the Republicans
controlled both the Congress and the White House in 2005, and the
Democrats had control by 2009. There was now a black President of
the United States, with much of the media celebrating the beginning
of a new era in race relations.
What happened
was that the political words had no relationship to the economic
reality. But few people judge any administration's effect on blacks
by what actually happens to blacks under that administration.
A finer breakdown
of the data on the net worth of blacks shows that the most drastic
loss of net worth was in the value of the homes owned by blacks.
This occurred after years of both Democratic and Republican administrations
pushing policies designed to enable more blacks to buy homes.
Much of the
media rallied behind the idea that there should be more home ownership
by blacks. Editorials rang out across the land, denouncing statistical
disparities between rates of home ownership by blacks and whites
as showing racial discrimination in the private sector that needed
to be corrected by the government.
Even when it
was shown that blacks, on average, did not meet the same financial
standards as whites, both politicians and the media denounced those
standards as too stringent.
The St.
Louis Post-Dispatch, for example, called for "fairer mortgage-lending
standards" and declared that "lending institutions are being far
more conservative than they have to be in determining the creditworthiness
of minorities." The Federal Reserve Bank of Boston likewise declared
that "unreasonable measures of creditworthiness" were not "appropriate
to the economic culture of urban, lower-income, and nontraditional
consumers."
The New
York Times reported that "even within the same income group
whites are nearly twice as likely as blacks to get loans." Many
in the media treated that as proof positive that racial discrimination
explained differences in mortgage loan approval rates. They were
not talking about racial differences in net worth in those days
– much less taking note of the fact that blacks in the same income
brackets as whites had far less net worth.
Racial discrimination
was where it was at, as far as liberal politicians and most of the
media were concerned. And the familiar "solution" was massive government
intervention in the market. Government agencies, from the Department
of Housing and Urban Development to the Federal Reserve leaned on
lenders to lower lending standards, and the Department of Justice
threatened prosecutions for discrimination if the racial makeup
of people approved for mortgage loans did not match their preconceptions.
It worked.
In fact, it worked so well that many blacks got loans that they
could not have gotten otherwise. Now the statistics tell us, belatedly,
that blacks lost out, big time, from this "favor" done for them
by politicians.
These lowered
lending standards applied to many others besides blacks. Everybody
lost out when the resulting risky mortgages led to a collapse of
the housing market, followed by a collapse of the economy. Lofty
words led to bitter realities.
The same mindset
that led to these disasters is still prevalent in Washington. Indeed,
the very people who spearheaded those political crusades – Congressman
Barney Frank and Senator Christopher Dodd – crafted new legislation
offering the same kind of "solution" to our current problems, namely
more massive government intervention in the economy. Words triumphed
again.
If there were
a contest for the most misleading words used in politics, "poverty"
should be one of the leading contenders for that title.
Each of us
may have his own idea of what poverty means – especially those of
us who grew up in poverty. But what poverty means politically and
in the media is whatever the people who collect statistics choose
to define as poverty.
This is not
just a question of semantics. The whole future of the welfare state
depends on how poverty is defined. "The poor" are the human shields
behind whom advocates of ever bigger spending for ever bigger government
advance toward their goal.
If poverty
meant what most people think of as poverty – people "ill-clad, ill-housed,
and ill-nourished," in Franklin D. Roosevelt's phrase – there would
not be nearly enough people in poverty today to justify the vastly
expanded powers and runaway spending of the federal government.
Robert Rector
of the Heritage Foundation has for years examined what "the poor"
of today actually have – and the economic facts completely undermine
the political rhetoric.
Official data
cited by Rector show that 80 percent of "poor" households have air-conditioning
today, which less than half the population of America had in 1970.
Nearly three-quarters of households in poverty own a motor vehicle,
and nearly one-third own more than one motor vehicle.
Virtually everyone
living in "poverty," as defined by the government, has color television,
and most have cable TV or satellite TV. More than three-quarters
have either a VCR or a DVD player, and nearly nine-tenths have a
microwave oven.
As for being
"ill-housed," the average poor American has more living space than
the general population – not just the poor population – of London,
Paris and other cities in Europe.
Various attempts
have been made over the years to depict Americans in poverty as
"ill-fed" but the "hunger in America" campaigns that have enjoyed
such political and media popularity have usually used some pretty
creative methods and definitions.
Actual studies
of "the poor" have found their intake of the necessary nutrients
to be no less than that of others. In fact, obesity is slightly
more prevalent among low-income people.
The real triumph
of words over reality, however, is in expensive government programs
for "the elderly," including Medicare. The image often invoked is
the person who is both ill and elderly, and who has to choose between
food and medications.
It is great
political theater. But, the most fundamental reality is that the
average wealth of the elderly is some multiple of the average wealth
owned by people in the other age brackets.
Why should
the average taxpayer be subsidizing people who have much more wealth
than they do?
If we are concerned
about those particular elderly people who are in fact poor – as
we are about other people who are genuinely poor, whatever their
age might be – then we can simply confine our help to those who
are poor by some reasonable means test. It would cost a fraction
of what it costs to subsidize everybody who reaches a certain age.
But the political
left hates means tests. If government programs were confined to
people who were genuinely poor in some meaningful sense, that would
shrink the welfare state to a fraction of its current size. The
left would lose their human shields.
It
is certainly true that the elderly are more likely to have more
medical problems and larger medical expenses. But old age is not
some unforeseeable misfortune. It is not only foreseeable but inevitable
for those who do not die young.
It is one thing
to keep people from suffering from unforeseeable things beyond their
control. But it is something else to simply subsidize their necessities
so that they can spend their money on other things and leave a larger
estate to be passed on to their heirs.
People who
say they want a government program because "I don't want to be a
burden to my children" apparently think it is all right to be a
burden to other people's children.
Among the runaway
spending behind our current national debt problems is the extravagant
luxury of buying political rhetoric.
August
2, 2011
Thomas
Sowell is a senior fellow at the Hoover Institution at Stanford
University. His Web site is www.tsowell.com.
To find out more about Thomas Sowell and read features by other
Creators Syndicate columnists and cartoonists, visit the Creators
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