Beyond Repair but not Reparation

“The keynote of the Black Belt is debt; not commercial credit, but debt in the sense of continued inability on the part of the mass of the population to make income cover expense.  This is the direct heritage of the South from the wasteful economies of the slave regime.”

W.E.B Dubois, The Souls of Black Folk (1904)*

“One such estimate laid out in the report determined that to address the harms from redlining by banks, which disqualified people in Black neighborhoods from taking out mortgages and owning homes, eligible Black Californians should receive up to $148,099.”

Kurtis Lee, “California Panel Calls for Billions in Reparations for Black Residents, The New York Times (May 6, 2023)

We are told that whites owe Blacks reparations because, long ago, wily whites loaned money to Blacks. We are told that whites also owe Blacks reparations because, some years later, even wilier whites refused to loan money to Blacks.  A world that nods to this argument is clearly beyond repair.

* * * * *

In the years following emancipation, Southern planters, merchants, and cotton factors allowed Black farmers to mortgage the crops in their fields, and to thereby purchase whatever they had a mind to purchase on credit.  Many Black farmers (and some whites) had a mind to purchase all sorts of frivolous things, and therefore “ate” the value of their crops while those crops were still growing in the fields.  On November 1,  or Reckoning Day, these thriftless and often shiftless farmers therefore had “nothing to show” for their year’s labor, because what their year’s labor had “shown” they had already consumed.

As they old saying goes, you can have your cake or eat it, and if you eat your cake it will be gone.

It is certainly wretched to live hand to mouth on credit, not to mention very poor economy, but there will always be people who run their affairs in this profligate manner if all are treated as equals and credit is extended to all.  Many people today live hand to mouth on credit, consuming today what they will produce tomorrow, and paying a surcharge to thus yield to clamorous appetite.  There is only one way to prevent people living in this profligate manner, and that is to deny credit to everyone who is likely to fall (or perhaps more accurately to plunge) into the wretched quagmire of improvident debt for consumption.

In other words, one must say that all men and women are not equal and accept nothing but cash from the thriftless, the shiftless, and the impulsive.  Under this rigorous but salutary regime, some thriftless debtors will reform and other thriftless debtors will starve.

W.E.B. Dubois tells us that wily white men (and “Jews”) harmed poor Blacks by offering them credit.  He says they should have charged Blacks lower interest, cheerfully written off Black defaults, and otherwise served Blacks in the spirit of smiling philanthropists; but Dubois also arraigns whites (and “Jews”) for loaning Blacks money in the first place.

Consider this line from The Souls of Black Folk,

“If Sam is a hard worker and crops promise well, he is often encouraged to buy more, sugar, extra clothes, perhaps a buggy. But he is seldom encouraged to save.  When cotton rose to ten cents last fall, the shrewd merchants of Dougherty County sold a thousand buggies in one season, mostly to black men.”**

Sam is a representative Black farmer in Georgia, and such farmers were, Dubois tells us, encouraged by wily whites (and “Jews”) to borrow money for foolish spending.  When Sam walked into the buggy showroom, the buggy salesman did not explain the economic folly of purchasing a gimcrack buggy on credit.  He did not say, “Sam, it’s for your own good that I am not going to give you a loan to buy this shiny new buggy that you really cannot afford.”  He instead acted on the principle that Sam’s right to be parted from his money was as inalienable as that of any other American fool.

* * * * *

Some years after those wily whites (and “Jews”) crucified poor Sam by encouraging him to take out a buggy loan he could not hope to repay, the even wilier sons of those wily whites (and “Jews) thrust a spear into the side of the Son of Sam by discouraging him from taking out a home loan he could not hope to repay.  They said, “Son of Sam, it’s for your own good I’m not going to give you a loan to buy a house that will be worth less next year than it is today.”  They said, “Son of Sam, I don’t want you to end up what people will one day call ‘upside down’ on a house, by which I mean owing to the bank more money than the house is worth.”

“Redlining” certainly accelerated the decline of property values in “redlined” neighborhoods, but it did not cause the decline.  Had “redlining” of declining neighborhoods not occurred, the owners of sinking properties would have found more suckers on whom to offload those hot potatoes, and could have charged those suckers higher prices, but the suckers would still have been suckered and the price of those hot potatoes would have continued to fall.

Contrary to what you’ve been told, “redlining” saved many Black people from the folly of going long in a bear housing market.

* * * * *

I have no doubt that Blacks would be demanding reparations if they had not been allowed to borrow money to purchase shiny buggies, and had been allowed, some years later, to borrow money to purchase houses in neighborhoods about to become slums.  If you give a fool what he demands, his grasping posterity will demand reparations for his folly.  But his grasping posterity will also demand reparations if you refuse to give a fool what he demands.

If you yield to these demands, you are the biggest fool and the world we live in is beyond repair.

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*) W.E.B Dubois, The Souls of Black Folk (Chicago: A.C. McClug, 1904), p. 137.
**) Dubois, Black Folk, pp. 147-148.