Diary

In Minneapolis, Joe Biden's Policies Have Been Tried . . . and They Failed

Townhall Media/Julio Rosas

The Land of 10,000 Lakes has a strong Democratic-Farmer-Labor Party for a long time. Mark Dayton was the Governor from January 3, 2011 to January 7, 2019, at which point he was succeeded by Tim Walz. While Republicans have a slight edge in the state Senate, 35-32, the DFL controls the state House of Representatives 75-59.

With the exception of the one-day mayoralty of Richard Erdall, on December 31, 1973, there hasn’t been a Republican mayor of Minneapolis since Kenneth Peterson’s term ended on July 2, 1961, though there were two independents during that time period. Albert Hofstede began 42 years of unbroken DFL control on January 1, 1978.

So, after all of that time under politically liberal control, how is it that I found this story in The Washington Post:

Minneapolis had progressive policies, but its economy still left black families behind

Structural racism persisted despite all the ‘good intentions,’ community advocates say

By Tracy Jan¹ | June 30, 2020 | 4:59 p.m. EDT

The Twin Cities once drew black families fleeing racism in the Jim Crow South, and with their combination of progressive policies and prosperity, regularly rank among the best places to live in America.Taxes, for decades, have been redistributed from wealthy suburbs to poorer communities to combat inequality — an effort bolstered in recent years by raising state income taxes on the rich. The result: more money for schools, affordable housing and social services in lower-income neighborhoods.

But the prosperity fueled by the region’s Fortune 500 companies and progressive policies has not translated into economic equality. Instead, the wealth gap between Minneapolis’s largely white population and the city’s black residents has deepened, producing some of the nation’s widest racial disparities in income, employment and homeownership. . . . .

The typical black family in the Twin Cities earned $39,851 in 2017, lower than the median income for African Americans nationally and less than half as much as the typical white family income of $82,371, which is much higher than white households nationally, according to the NAACP report. A quarter of black households lived in poverty, five times the poverty rate for white households.

So, how did this happen? Minneapolis prides itself on being a “bastion of progressivism,” but the ‘progressive’ policies of the Democratic-Farmer-Labor Party have not produced ‘racial justice’ or lesser inequality of results between black and white residents; the city is worse for black Americans than the median in the United States. Everything Joe Biden and the Democrats have told us they plan to do has already been tried in Minneapolis — throughout her long article, Miss Jan was very thorough in listing and documenting the programs adopted — and they have failed.

The shortcomings have given rise to an urgent debate about where Minneapolis went wrong and what measures would bring better results. Economists, lawyers and civil rights advocates in the Twin Cities say progressive tax policies could not make up for other aspects of structural racism, such as access to credit or jobs. Some say investments in affordable housing in low-income neighborhoods deepened segregation and poverty. Others argue for better enforcement of federal laws to combat discrimination in lending, employment and housing.

Uhhh, it was easier home mortgage lending in the 1990s and early 2000s which both propped up homebuilding during the 2001-2 recession and led to the spectacular housing crash in 2008.² Stricter standards for mortgage lending, both by the government and self-imposed by mortgage lenders, were a response to the economic disaster caused, in part, by weaker standards. Where previously the home itself was the necessary and sufficient collateral for a mortgage loan, while it was still necessary, it was no longer sufficient; there had to be more security for lenders to take the risks associated with giving loans of several hundred thousand dollars to individuals.³

But the outcome for black residents in Minneapolis and St. Paul also undercuts the liberal argument that spending on progressive policies can create systemic change.

Conservatives have long noted that liberal policies do not achieve the promised results.

Civil rights and community leaders in the Twin Cities say racial equity cannot be achieved without gaining a greater understanding of how the country’s racist foundations continue to affect the criminal justice, education and health systems. Too often, they say, progressive programs focus on “fixing” something perceived to be wrong with the black community rather than fundamentally reshaping underlying inequities in society.

“In order for Minneapolis and the region to actually change the trajectory for people of color, whites are going to have to be uncomfortable,” said Gary Cunningham, chief executive of Prosperity Now, a national nonprofit focused on racial wealth equity. “They are going to have to have conversations about how their privilege maintains the status quo and how resources and wealth are distributed in their communities.”

Let me be blunt here: Mr Cunningham is saying that white Americans are going to have to give up something. It isn’t a matter of somehow lifting up the economic status of black Americans, but lowering down the economic status of white Americans at the same time. Mr Cunningham mealy-mouthed that part, knowing that agreeing to make themselves poorer wasn’t going to win many votes from white people.

What have Minnesota and Minneapolis done to try to address the racial disparity issues? Under Governor Mark Dayton, taxes were again increased on the top producers, which the article noted made the state’s income tax the “most progressive” in the nation. The expected Democratic presidential nominee, former Vice President Joe Biden, also wants to increase taxes on the top producers, but that didn’t seem to help black residents of Minneapolis.

Minneapolis has several programs to encourage black families to buy their homes, something Mr Biden has as part of his economic proposals as well, yet the black home ownership is lower in Minneapolis than in the United States in general.4

In Minneapolis, we have seen the national Democratic economic agenda for the United States writ small, put into actual government policy, pushed and administered by the oh-so-magnanimous and well-meaning liberals in effectively uncontested power . . . and they have failed! If there was ever a laboratory experiment for what the not-quite-whacko left — the Democratic leadership, not the street protesters — want to do, that laboratory is Minneapolis, and the experiment demonstrates what conservatives have said all along, that those policies do not work.

The lessons of the experiment are clear: throwing money at ever more liberal programs is little different from putting it in a pile and setting it on fire. It’s a waste of money, based on the utter ignorance of the policymakers and bureaucrats trying to implement them.
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1 – Tracy Jan covers the intersection of race and the economy for The Washington Post, a beat she launched in December 2016. She previously was a national political reporter at the Boston Globe.
2 – I was working in ready-mixed concrete supply during the 2001-2 recession, in northern Delaware and southeastern Pennsylvania, and was constantly amazed at how homebuilding continued throughout the period. With higher unemployment, I kept asking myself how people could keep buying homes. When the 2008-9 recession came along, and so many home purchases went into foreclosure, I was saying that construction, having skipped the previous recession, was paying for it doubly.
3 – Banks and mortgage lenders were overwhelmed by the huge number of mortgages failing, and many properties on which lenders should have foreclosed sat without action taken for long periods of time, because banks were having such problems unloading the foreclosed-upon properties they had. I made an offer on a home in a year-long default next door to me in Pennsylvania, but the bank couldn’t even talk to me because they hadn’t started foreclosure.
4 Mr Biden’s website states: “Some banks are raising mortgage borrowing standards and requiring significantly higher down payments. Biden would also restrict the big banks’ ability to abandon the African American community by withdrawing from housing markets for all but the best-off buyers.” It was the collapse of the mortgage banking business which spurred the deep recession of 2008, caused by very weak standards for mortgage lending. Mr Biden’s proposal would lead to a return of that, by banning banks from the apparently racist requirement of lending only to people with a reasonable prospect of repaying the loans.
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