Can Baby Bonds Help Close Baltimore’s Wealth Gap?


DHARNA NOOR: The same day Maryland Governor
Larry Hogan announced a plan to pour resources into law enforcement to address crime in Baltimore,
another type of discussion was happening in the city. SPEAKER: We really want to trust people. We need to provide them with the structure
and resources so that they can achieve and attain, not just simply focus on subsistence
policies to just provide them with simple enough to survive, or trying to be punitive
and punish their seemingly bad behavior, which frankly manifests as a result from not bad
behavior but simply not having resources in the first place. DHARNA NOOR: The National Asset Scorecard
for Communities of Color is a project that assesses the level of, and nuances of, wealth
disparities in cities across the country. At the 21st Century Neighborhoods 2017 Symposium,
the projects lead investigators, Dr. Darrick Hamilton and Dr. Sandy Darity discussed their
current work on wealth disparities in Baltimore. SPEAKER: With Baltimore, it was really relevant
because of some of the media attention that was going on around criminalization and incarceration. So, we wanted to look at another dimension
like what is the role of incarceration and the intersection with race as it relates to
asset building? DHARNA NOOR: The Baltimore study assesses
the relationship between race, wealth and family histories of incarceration. About 1.5% of the white population in Baltimore
has been incarcerated versus roughly 9% of Black Baltimoreans. SPEAKER: If we look at wealth, the medium
wealth position of Black families is virtually zero and negative if you’ve had exposure to
incarceration. DHARNA NOOR: The exact numbers aren’t final
yet but their research indicates that Black people, especially those with a family history
of incarceration, not only have far less wealth than white people, but also are far less likely
to have access to wealth building assets that appreciate in value, like stocks, a house
or a bank account. SPEAKER: So, if you don’t access to formal
banking, you tend to have to resort to check cashing institutions that have much high fees
for banking. DHARNA NOOR: Professors Darity and Hamilton
also discussed potential redistributive measures. One was a federal job guarantee program. Another was what’s known as baby bond system. SPEAKER: But the idea is that every child
would receive a trust fund. The amount of the trust fund would vary based
upon the wealth position of the child’s family. And so the wealthiest families, we’d give
the newborn child a $50 trust fund but for families at the lowest end of the wealth distribution,
we’d give the kid $50,000 to $60,000. DHARNA NOOR: The money in the trust would
accrue interest and eventually could be used to put a down payment on a house or a business. SPEAKER: So, it’s intended to give everybody
capital at a key juncture so that they have an opportunity to build wealth. It doesn’t guarantee an outcome but we know
that if you don’t have a chip in the game, you can’t even play the game. DHARNA NOOR: And the professors have some
ideas for how to fund such a program. SPEAKER: The estate tax is a potential option
but we can also think about the ways in which capital gains is taxed at the local level,
the ways in which mortgage interest is taxed at the local level and how those benefits
and taxes are distributed. People at the low end of the wealth distribution
often times don’t benefit one iota from these types of taxes, so we can think about caps
for instance on some of those things. Should you be able to deduct a second home
that cost $2 million and get state subsidy to do so? Maybe not. DHARNA NOOR: But for right now, Dr. Darity
thinks a more likely way to fund baby bonds would be to call on philanthropists. SPEAKER: The community would seize the opportunity
to try to show how this type of project could be done, so we could learn about what needs
to be altered or what needs to be changed before we tried to scale it up at the federal
level when we have a more politically receptive congress. DHARNA NOOR: These programs, Darity and Hamilton
argue, would represent a shift in how we think of public services. SPEAKER: We invest too much in trying to manage
poverty. Stop trying to manage poverty and really think
about ways to empower people. SPEAKER: But I think that most of our social
programs to address the poverty problem are mechanisms that give you resources after you
have already experienced poverty, and I think what we need is a structural apparatus in
this society, where people don’t get exposed to poverty in the first place. DHARNA NOOR: For The Real News, Dharna Noor,
Baltimore.

9 thoughts on “Can Baby Bonds Help Close Baltimore’s Wealth Gap?

  • The biggest problem in black communities is the lack of fathers in the household. This has been shown to increase the rate of high school dropout, gang affiliation, and substance abuse. Why not provide a tax credit for mothers who are married when their child is born? Every support I see does the opposite, in that it incentivizes bad behaviour. Don't provide assistance for people who haven't made their life choices yet, provide assistance to those who make the right decisions.

  • Translation: Can giving black people free stuff paid by for by others "close the wealth gap." Answer: No. If so, it would have happened by now. We are 50 years into the welfare state. Has it produced the hoped-for results? Encouraging people to be responsible, law-abiding, productive citizens will lead to improvements over time. Stop having children you cannot raise, and then sticking tax payers with the bill. Stop defending criminals while demonizing the police. Stop electing self-serving politicians who depend upon your poverty to gain your vote. Stop discouraging businesses who would like to locate in your city.

  • Any time a professional race hustler mentions the word "wealth disparity," assume he is manipulating statistics in order to deceive. That is because he will cite household studies of wealth and income, which depend on the NUMBER of EARNERS in the household. Guess what? Black households have few earners than white households because of illegitimacy and the decline of marriage as an institution in black America. They NEVER adjust for the number of earners. This guy is a profession huckster. Shame on TRN for allowing these manipulations to stand without challenge.

  • glad they mentioned job guarantee, but i am disappointed on the emphasis in this video on baby bonds. baby bonds without job guarantee will not provide institutional security to preserve the wealth.

  • interesting report! a Green New Deal, Leap Manifesto, end to private prisons, the war on drugs, a war on poverty, and raising the minimum wage and lowering the cost of housing as well would do wonders to close the wealth/race gap.

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