by Archie M. Richards, Jr., CFP^®
October 24, 2005

During a recent speech of mine, a member of the audience challenged my assertion that big-government policies have hurt blacks more than they've helped. My response was inadequate. Here's what I should have said:

The Davis-Bacon Act was enacted in the 1930s specifically to give whites preference over blacks in obtaining high-paid, unionized construction jobs. Outrageously, the law remains in effect.

Minimum Wage Laws make it especially difficult for black men in central cities to obtain jobs. Economist Milton Friedman calls minimum wages "the most racist laws on the books."

Welfare: Until the mid-1990s, welfare laws provided living wages to mothers. But the mothers were required not to work and not to marry an employed man. Millions of children therefore grew up without fathers in an environment of dependency.

War Against Poverty: In an effort to wipe out poverty, the federal government since 1964 has poured something like $8 trillion into U.S. central cities. The effort has failed. The poor would be better off if the money had not been pried from the hands of taxpayers in the first place.

Dependency: Government welfare subsidizes and reinforces failure. It prevents recipients from overcoming challenges on their own, which many would succeed in doing. President Lyndon Johnson chose Detroit as a showcase for the anticipated successes of the War Against Poverty. Yet among U.S. cities today, Detroit has especially high levels of fatherless families, crime, and unemployment.

Low-Income Housing divides a city in two by attracting people who need employment and repelling those who provide it.

Rent Control (especially in New York City): In a rent-controlled apartment, the rent is kept low as long as the tenant remains. When he moves out, the rent moves up to the free-market level. Many prosperous people, leading stable lives, arrange to stay in rent-controlled apartments for years, paying low rents. Central-city blacks, who move frequently, suffer high rents. In fact the market rates are especially high, because rent control suppresses the housing supply.

Zoning prevents blacks from selling products and providing services on city streets. This deprives them of a source of legal income.

Criminalization of Drugs: Medically, drugs are less hurtful than alcohol. But while entrepreneurs who sell alcohol are free to proceed, entrepreneurs who sell drugs - many of them black - are jailed, often for decades.

Violence: The suppliers of legal products resolve their disagreements peacefully in court. But the suppliers of illegal products, like drugs, cannot do so, because both contestants would be imprisoned. Instead, the disagreements are resolved by force. Also, drug's criminalization raises the prices, increasing the number of robberies to satisfy addictions. The criminalization of drugs is the most important cause of violence in America - especially in black communities. It's also causing civil war in Colombia and may do so in Afghanistan, providing havens to terrorists.

Gambling: The numbers racket, which used to be prevalent in black areas, is illegal. But government-sponsored lotteries, whose odds are far less favorable, have increased gambling addiction tremendously, especially among the poor.

Licensing Laws prevent blacks from competing with whites. For example, many blacks can't call themselves hairdressers unless they undergo long and expensive licensing courses. But generally, the blacks only want to braid black hair, a skill the courses do not teach.

Affirmative Action brings to good colleges black students who are not prepared for the intellectual rigors. Many such students drop out, considering themselves to be failures.

Education: Far too many children, especially in the central cities, discontinue their schooling before learning to read. The cities of New Jersey, for example, spend approximately $12,000 per student per year - highest in the nation. Yet New Jersey's public schools are poor. If governments instead provided vouchers, enabling parents to send their children to any school, the competition would force government schools to improve. Campaign contributions by teachers unions have prevented this inventive policy from being passed.

Many of the above laws were passed with good intentions. But as to most big-government policies, the actual, long-term results are opposite to the intended results. The most racist aspect of American life today is its laws.