November 16, 1998

THE U.S. RACE TAX

With a Challenge to African American Leadership

by Glenn E. Burress, PhD

The reduction in mean income for African Americans is traced to a $3,995 or 4.7 percent reduction in mean income per household in their top income fifth in a year when mean income of their white cohorts rose $5,997 or 4.9 percent. Moreover mean income of African Americans in their top 5 per cent ranked by income fell $18,308 or 12.7 percent when the income of their white cohorts rose $14,149 or 7.1 percent. It is shown here that given Federal Reserve unemployment rate policy in 1997, median income of African American households rose faster than that of whites due to the fact that the unemployment rate among African Americans remains twice that of whites -- as was true in the 1960s.  It is also shown here that the reduction in mean income at upper income levels and therefore for all African Americans is expected given the rise of laws like Proposition 209 in California.

Table 1 also reports that in 1997 the total income paid African American was $236.2-billion less than that paid to their white counterparts -- up 15.3 percent from $204.8-billion in 1996. These annual data are available only  since 1947 and they show that the largest previous annual percentage increase in the gains of whites at the expense of African Americans was 10.2% in 1972.   Hence by a huge 53.9 percent  margin, African Americans fell further behind whites in 1997 than in any year for at least a the last half century. The bottom of Table 1 provides a starting point for estimating damages for which reparations should be claimed. I refer to the $5.629-trillion damages suffered by African Americans during 1947-97 due to racial income disparities. However a first step in the quest for racial justice is to demand a restoration of constitutionally required 1962-66 policies that can reduce the race tax and  racial income disparities to zero in less than 15 years.  Even if that proposal were implemented in the next year, after another 15 years the total damages suffered by African Americans to be claimed in action for reparations will total about $8-trillion..

The Race Tax:   The race tax is the rate at which income per African American household is less than that of whites. The tax rate is computed by expressing  the racial income disparity in column  (3) of Table 1 as a percentage of the income of whites in column (2) of that Table.  Racial justice requires a zero race tax or a zero racial income disparity.  A reduction in the race tax indicates rising racial justice and an increase in the race tax rate indicates rising racial injustice.  The race tax is necessarily reduced by economic policy prescribed by we systems scientists.  We defined that policy as the Prescription for Success in Panel A of Table 2.  The race tax is necessarily increased by economic policy prescribed by social scientists, theologians and lawyers. We therefore define their policy as the Prescription for Failure in Panel B of   Table 2.

In 1967 I asked the staff of the Kerner Commission to publish my paper and/or permit me   to testify to explain the following proof that is still highly relevant: If the 3.3 percent annual reduction in the race tax engineered by we scientists during 1962-66 continued,   the race tax would be zero 13.5 years later in 1980. However as shown by Appendix K, the methodology adopted by the Kerner Commission was limited to the research methods required to earn PhDs in  the social sciences, law and theology in major universities.  Hardly unrelated, it was the same method of social scientists, theologians and the law for discovering the truth that provided scholarly, moral and legal authority for slavery and Jim Crow laws. Nor is it unrelated that advocates of this same method of discovering the truth secured control of economic policy at the White House on November 15, 1964.  On that date they initiated the reversal of non-racist economic policy that had reduced the race tax since 1941 with accelerated reduction in that tax during 1962-66. When non-racist policy that reduces the race tax is reversed, policy is racist (as defined below) and increases the race tax.  That policy reversal was not complete until it was enacted by Congress on June 30, 1968 as Vietnam inflation policy.  Appendices E and F (Witnesses, Consultants and Advisors) show that Commission methodology did preclude formal papers or testimony by we systems scientists.  It is show below that a major consequence of race policy advocated by the Kerner Commission in 1967 and others (like the Christopher Commission in 1992 on the riots in Los Angeles and the John Hope Franklin Commission in 1998) is that the race tax rate rose in 1997 by 8.3 percent to 36.5% for a record $31.4-billion increase in the tax bill to $236.2-billion.  The Chart documents another indicator of the institutionalization of what is defined shortly as the racist acts of the Kerner Commission:   The reduction in the ratio of the incomes of African American families to white families since 1969-71. 

The Prevailing Myth and its Origin:  The reduction in the race tax during 1962-66 is traced to successful efforts of President John F. Kennedy to free the nation from myths about its economic history and policy. In his 1962 Yale Commencement Address entitled “The Myth and Reality in Our National Economy,” he explained why he had reversed policies demanded by economists and other social scientists. He first observed: “[T]he great enemy of truth is very often not the lie--- deliberate, contrived and dishonest -- but the myth -- persistent, persuasive and realistic.” A successful myth must contain an element of truth. It is probable that the most dangerous myth is a belief that appears to be validated by well  documented and undisputed statistics reported by experts but which   are in fact, unrelated.

There are few better examples than the formally prepared remarks at that press briefing by Dr. Daniel H. Weinberg, Chief, Housing and Household Economic Statistics Division on September 24, 1998 at the U.S. Census Bureau.  His prepared statement for the press with the new 1997 statistics were released on September 24, 1998 and are posted on the internet at http://www.census.gov). He properly told the press: “Households with a white householder had a 2.5 percent increase in income, those with a Black householder had a 4.3 percent increase... in median income between 1996 and 1997.” That is, on the basis of median income measures, the Census Bureau reports that the racial income disparity was reduced 1.8 points in 1997. If that were the relevant measure, the good news was that rate the racial income disparity would be eradicated in 21 years. President Clinton called a press conference that day which applauded the new evidence of continued progress against economic inequality for African Americans. The President’s Commission on the Race Initiative headed by Dr. John Franklin Hope made similar claims. Reports like these doubtless are one reason why the African American press contains reports like the following which appeared on the front page of The Sacramento Observer October 22-28: “...the Joint Center for Political and Economic Studies has released findings from its 1998 National Opinion Poll. For the first time in a Joint Center survey, a greater proportion of Blacks than Whites say they are better off financially than the previous year.” The Center is an African American think tank in Washington headed up by Eddie N. Williams.

However the racial disparity in income is measured, not by differences in median incomes but by difference in income per head or mean incomes.  For reasons explained below, the median income of the two races could be identical but the income per head of whites could still far exceed that of African Americans. The significance of this difference between these two measures is illustrated by what the Census Bureau official failed to tell the press. He failed to mention that the more comprehensive 1997 Census Bureau statistics—income per household—show that income for all African Americans households fell in 1997 as income for all white households rose. That is, the Census Bureau failed to tell the press that when income of all white households rose 3.6 percent in 1997, the income of all African American households fell 0.7 percent. Therefore, when measured properly, the racial gap widened by 4.3 points and at that rate, after 21 years, would not be eradicated, but would more than double—rising 142 percent.

 The Moral Imperative for African Americans:  With these facts and official statistics, African American leaders should be reporting that a proper interpretation of official statistics is that in 1997, in both absolute and relative terms, African Americans lost their hard-won economic gains on a greater scale than in any year on record.  However rank and file African Americans must first demand accountability of their leaders for a record of aggressive cover up of their unintended racist acts required by the professional training of African American scholars by white social scientists.

It is clear that racial injustice will keep accelerating until a few vocal  African Americans who are second or third string behind   national leadership muster the courage to demand accountability of their leaders for their racist acts. Following the example of King., they must teach their race to quit submitting to trusted African American intellectuals who have been trained professionally by whites in major universities since Du Bois earned his Ph.D. in history at Harvard University in 1895. As a result these African American intellectuals are experts in racist ideology.  Racist ideology is defined as a belief system that requires advocacy of using either race or economics laws or both for racial oppression. In the past racist ideology took the form of a racist reading of African American history traced to the racial theories of racists who provided scholarly authority for slave and Jim Crow laws. Since World War I racist ideology has taken the form of an invariably unintended racist reading of U.S. and world economic history traced to economic theories of economists who provided scholarly authority for racist domestic and international economic laws. A racist act is defined as the defense of racist ideology including the refusal to submit to accountability for an alleged unconstitutional use of academic and religious freedom to advocate a racist ideology.  

Whether an act is racist is totally unrelated to the intent of those who engage in a racist act. In particular the racist acts of  respected and trusted friends of African Americans are far more dangerous than the racist acts of known racists like Sheriff Bull Connors in Birmingham in 1963. Indeed future progress in civil rights requires a return to the paradigm of the U.S. Supreme Court in Brown vs. Board of Education in 1954 and Martin Luther King, Jr.’s Letter to White Clergy from the Birmingham Jail in 1963. In both cases what mattered was not the intent of the school board in Topeka or the white clergy in Birmingham, but how the unbiased (like a lay jury) interpreted the historical record of the predicted racist consequences of one’s acts.

In particular, racist ideology today requires cover-up of the following proof: The continuing racial disparities in income and wealth is a direct product of unconstitutional federal administrative economic laws that since November 15, 1964. These little known laws –promulgated by experts in power delegated by Congress—require the Prescription for Failure that again since 1964 has perpetuated the impact of slavery in violation of international human rights laws.  It is clear that white social scientists, lawyers and theologians are far more successful in protecting the ongoing use of economic laws for racial oppression than their counterparts in the South who tried to protect the use of slave and Jim Crow laws for racial oppression. As a result, African American intellectuals educated by these whites are a far greater threat to their race and humanity at large than African Americans who supported or accepted slavery and Jim Crow laws.

The only indirect reference to the reduction in per capita income for African Americans household in the briefing distributed to the press by the Census Bureau which reads as follows: “Per capita income showed an increase between 1996 and 1997 only for Whites among the race groups....” The only implied justification for the failure to report the reduction in per capita income of African Americans reads: “All statements made in the reports and in this briefing have been tested statistically.”  Census Bureau staff reported to me that the reduction in income “for Blacks is not statistically significant.” These recent reports provide an opportunity to illustrate a central thesis of this project—why non-violent protest has lost its power: It is only in courts of law that I have been able to publish proof that omissions throughout academia and government like this one are traced to the fact that these analyses are an unintended prisoner of an institutionalized method of social science research that requires a racist reading of economic history by historians. That history  is explained by racist economic theory by economists with both are validated by a racist definition of statistical significance.  In 1975 testimony before the U.S. Congress I traced this racist suppression of the truth by trusted scholars to an unwitting conspiracy between an error in theory and statistical analysis.  The racist paradigm of both African American and whites scholars permits them to argue as follows: If one adds that the statistically significant $700 average increase in income for the 9.97-million African American households who earned less than $51,117 in 1997 and the statistically significant $3,995 reduction in income for 2.49 million African Americans who earned more than that amount in 1997, it is true that for all African Americans income fell 0.7% in 1997. However to  argue that this is insignificant and should not be reported is bizarre. System scientists show that this definition of statistical significance flies in the face of internationally accepted scientific methods.

Definitions: Income per household or mean income is the average that most citizens understand. It needs no explanation. Median income is the level above and below which half of the households are found.  Typically the median and mean incomes of a population tell similar stories or rise and fall together. Hence when they tell contradictory stories, the presumption is that something significant or worthy of investigation is underway.  This is especially true in 1997 which is the first time in all history that the official statistics show that for all African Americans when their median income rose their mean income fell. This contradiction calls for careful explanation.

Why Median Income of African Americans Rose Faster than for Whites: A rise in median income is an indicator that income of those on the bottom half has increased faster than the income of those in the top half of the income distribution. A reduction in the unemployment rate has a disproportionate positive impact on income of those in the bottom half of the income distribution. The unemployment rate for the mostly white nation fell from 5.4 in 1996 to 4.9%. The unemployment rate among African Americans is roughly twice that of whites and therefore one would expect the median income of African Americans to rise faster than for whites. These expectations are validated by the Census Bureau report that median income of African Americans rose 4.3% or 72% more than the 2.5% increase in median income of whites. Observe that the median income could rise and the mean income could fall if income in the top half of the distribution fell more than income rose in the bottom half.

Why Mean Income of African Americans Fell: The historic increase in the racial income disparity in 1997 is traced to a $3,995 reduction in income per African American household with incomes that exceeded $31,300 -- the bottom of the top of their income fifth. This income reduction for African Americans in their top income fifth was recorded while the income of whites in their top fifth rose $5,997. This means that within this group   the racial gap in income rose  $9,992. A closely related aspect of those same statistics is the difference in the change in income of African Americans vs. whites in the top 5 percent of each race. For these African Americans in their top 5 percent their income fell $18,308 while the income of whites in their top 5 percent rose $14,149. Hence there was an $32,457 increase in their racial income gap in this group in that one year. The 1997 changes in income by all races and by race at various income levels were as follows:

1997 Change in Mean Income by Race by Fifth and Top 5%

 (Changes in 1997 dollars with % in parentheses, negatives italicized)

Analysis of Moral Options:  Given the obvious importance of affirmative action, one might argue that these statistics were a product of the progressive opposition to affirmative action in several states and its rejection of in other states with laws like Proposition 209 in California and I-200 in Washington . One might then argue that the remedy is to restore affirmative action and make it more aggressive.  However that is a dangerous interpretation of this evidence. It is dangerous due to the false presumption that all relevant knowledge is produced by the racist mind set of African American and white social scientists.  By definition these scholars refuse to address fundamentals.  Those familiar with the fundamentals explain the progressive weakness of affirmative action and the reduction in the income of African Americans relative to whites since 1971 indicated in Chart 1 are two aspects of the same problem -- like two facets of the same diamond.   This is true in the same sense that a report that the room that is too hot and another report that the room temperature is too high are two aspects of the same problem or two ways of saying the same thing.  Such statements are known as tautologies.  A tautology states the problem in a manner that precludes a solution.  For example, if all knowledge were arbitrarily limited to the room being too hot and the temperature being too high, a remedy to discomfort is then impossible. However if knowledge extends to the science and technology of air conditioning then the remedy is to turn on the air conditioner.  Anyone who suggests that this analogy over-simplifies is a prisoner of the ideology of social scientists. Fact is, if there is a scientific remedy to a system failure, it is almost always simple. The belief that there can be no simple solution to these complex crises is a myth born of the ideology of non-scientists who are threatened by the power of science.

 In the same sense that a room that is too hot and a room temperature that is too high represent a tautology, the high and rising racial income disparities and the progressive weakness of affirmative action are a tautology.  Both facets of the racial crisis are the predictable consequence of the nation’s shift during 1964-66 from the non-racist, technological paradigm of systems scientists to the racist, non-technical paradigm of social scientists.  By definition that paradigm cannot acknowledge non-behavioral, technological remedies. Therefore in 1967 we scientists called upon the Kerner Commission to demand the restoration of the constitutional use of the technology which we designed and with which the nation was empowered by the Employment Act of 1946. When used as required by the Act, this technology is for the socio-economic system the counterpart to a life support system for a patient in a hospital. The race tax is increased. However like fundamentalists faith healers who might secretly turn off the life support system and thereby use medical technology to kill the patient, social scientists have used this same technology in violation of that Act since November 15, 1964. They have insisted on using the Prescription for failure in Panel B of Table 2 to engineer an elevated race tax and racial disparities in income like those recorded in 1997.

Restated, like faith healers, social scientists can recognize only remedies that operate through changes in human behavior. Hence their response to the 1965-69 crisis they had engineered in violation of the Employment Act of 1946 was their 1969 proposal known as affirmative action.  Today affirmative action is needed more than ever. However because knowledge relied upon by civil rights leaders since the Kerner Commission has been limited to findings reported by leading social scientists, their only known remedy has been programs like affirmative action.  As a result, technology continues to destroy economic opportunities for African Americans not only faster than they are destroyed for whites, but at a faster than they could ever be created by affirmative action.

The false premise imposed on voters in the campaigns for both Proposition 209 and I-200 was that laws discriminate against African Americans in employment and other economic opportunities. For more than a year before Proposition 209 was passed in November, 1996 I tried to convince African American leaders in California to confront these lies in the campaign against Proposition 209. Not one would respond. Starting in June, 1996 when it appeared certain that Proposition 209 would pass, the same leaders assured me that the information I offered would be an important part of the lawsuit that would challenge Proposition 209. Although I received this assurance from persons who filed that lawsuit, I was never consulted and none of my arguments were included in that lawsuit.  I therefore intervened in that lawsuit with proof in my own filing that a major part of what voters were told as reason to vote for  Proposition 209 was false. I could receive no support from either African Americans who filed the lawsuit or their lawyers and the judge refused to let me intervene on behalf of African Americans.

What is far worse is that because this knowledge is suppressed by African Americans, the social sciences can be cited as an authority to argue that the failure of the civil rights movement and the nation generally since the 1960s is due to affirmative action and related programs like the Great Society.  As a result, even some influential African Americans have called for an immediate termination to these programs.  As we predicted in papers suppressed by the Kerner Commission, programs like affirmative action must fail when the technology of national life support is being used as a national death machine. That suppressed paper explained that no remedy like affirmative action that addresses crises of individuals can succeed when technology is being used to engineer rising racial disparities in income along with sometimes double digit unemployment among whites like during 1974-75 and 1982-83. In summary, when the technology is used lawfully to reduce racial income disparities with white unemployment rates well below 4 percent, programs like affirmative action succeed because more jobs for African Americans does not mean fewer jobs for whites. However when that same technology is used unlawfully to increase racial income disparities and white unemployment, affirmative action must fail due to competition between African Americans and whites for a reduced number of jobs.   In that 1967 paper for the Kerner Commission I quoted from the 1966 book by Walter Heller, New Dimensions in Political Economy. Heller had been Chairman of the Council of Economic Advisors to President Kennedy and then to President Johnson until November 15, 1964.   He had taught President Kennedy to reject policies prescribed by economists and to use the technology of the Employment Act of 1946 constitutionally: In that book Heller tried to teach the nation:

“On the domestic front, policies that enable an economy to grow and prosper give substance to Presidential pledges to ‘get the country moving again’ or to move toward a great and good society. That society takes root far more readily in the garden of growth than in the desert of stagnation. When the cost of fulfilling a people's aspirations can be met out of a growing horn of plenty -- instead of robbing Peter to pay Paul -- ideological roadblocks melt away, and consensus replaces conflict.(p. 12)

“As to the individual, abundance enlarges his options, his meaningful freedom to choose among goods and services, among jobs, and between work and leisure. Prosperity extends economic freedom more deeply, creating jobs and enabling a President to battle the tyranny of poverty for some without wrenching resources away from others. In the battle against discrimination, prosperity adds economic rights to civil rights. Thus economic liberty can grow -- indeed, is growing -- simultaneously with governmental power.” (p. 13) 

And in that 1962 Yale Commencement Address, President Kennedy challenge the nation with a prophetic warning if the nation continued to rely on politically powerful non-scientists to decide whether the his New Frontier redefined by President Johnson as the Great Society shall be empowered by science and technology: 

"As every past generation has had to disenthrall itself from an inheritance of truisms and stereotypes, so in our times we must [in federal budget policy] move on from the reassuring repetition of stale phrases to a new, difficult but essential confrontation of reality.

"Too often, we hold fast to clichés of our forbears. We enjoy the comfort of opinion without the discomfort of thought."

"What is at stake in our economic decisions today is not some grand warfare of rival ideologies which will sweep the country with passion but the practical management of the modern economy. What we need are not labels and clichés but more basic discussions of the sophisticated and technical questions involved in keeping a great economic machinery moving ahead.”

Then JFK concluded with a prophetic warning:

"If there is any current trend toward meeting these problems with old clichés, this is the moment to stop it  before it lands us all in the bog of sterile acrimony." (Italics added)

                                                                       Table 1.

ANNUAL U.S. RACE TAX, 1947-97: $5.6-trillion

DAMAGES FOR LEGAL ACTION TO SECURE REPARATIONS

Race Tax is the Rate of Unconstitutionally Programmed Racial Disparities in Income 

(based on household incomes, 1997 dollars)

Total of 1947-97 Damages for an Action for Reparations: $5.629-trillion.

Source: 1967-97 data: Bureau of the Census, Money Income in the United States:1997, Current Population Reports, Consumer Income, P60-200, U.S. Department of Commerce, 1998, Table B-2; 1947-66: Print-outs supplied by the Bureau of the Census dated May 5, 1995: Tables F-1, F-1a and F-2.

Table 2. 
1921-1999

ENGINEERING FOR INCREASED RACIAL JUSTICE OR INJUSTICE*

**Private business sector, all persons.

***Science: The Prescription for Success: The premise is that the primary cause  of economic problems is productivity that is too low because poverty and unemployment rates are too high. Scientists increase productivity by eradicating poverty and involuntary unemployment. The measure of success is a surplus with zero involuntary unemployment. Economic policy that predictably increases social justice and the ratio of the S&P 500/GDP  is some combination of tax rate cuts, increased spending and permissive monetary growth.  

****Economic Theory: The Prescription for Failure: The premise is that the primary cause of economic problems is inflation because policy has failed to keep poverty and unemployment rates high enough. Economists therefore increase unemployment and poverty -- or keep them high. Reduced poverty reduces productivity which induces inflation with higher rates of unemployment or stagflation. The measure of failure is rising federal debt. Observe: After almost no increase in federal debt for 1946-64 the federal debt has risen $5-trillion since 1964. Economic policy that predictably reduces social justice and the ratio of the S&P 500/GDP is any combination of tax increases, spending reductions and restrained monetary growth.

*Simulations for 187 different historical periods provide 187 different diagnostic categories. There are 121 examples of the Prescription for Success which produced the average successes reported in Panel A and 66 examples of the Prescription for Failure which produced the average failures reported in Panel B. These are 121 rates of policy stimulant with the associated 121 different rates of predictable economic expansion and 66 rates of policy restraint with the associated 66 different rates of restraint on economic activity. For all 187 cases see Figure 1 in Glenn E. Burress, (testimony), Hearings: The 1975 Economic Report of the President, Joint Economic Committee, U.S. Congress, Part IV, March 12, 1975, p. 1068. A prediction for 1976 that was made "on command" in this testimony illustrated the successful track record since 1958. The testimony documented that a less detailed successful prediction for 1976 had been published in 1973. The Figure is from Glenn E. Burress, "One Response to Frustrated Economic Policy: A More General Theory of the Consumption Function,"  National Bureau of Economic Research, New York, N.Y., November 16, 1973; reported in Issues for Research, Annual Report, NBER, 1974 p. 128.; Sources: U.S. Depts. of Commerce and Labor