Many prominent black scholars were absolutely stunned by the racially misinformed remarks made by President Obama’s Chairman of the Federal Reserve, Ben Bernanke. During a visit to Morehouse College, Bernanke stated that the reason for the massive wealth gap between blacks and whites in America is due to “financial illiteracy” and a lack of “financial education” on the part of African Americans.
According to the 2007 Survey of Consumer Finances, white family households possess 10 times more wealth than the median black family. Yes, the statistic is true, but it’s not because black people spend all their money on gold chains and rims. Much of the wealth in America is obtained through inheritance: imagine having parents who can give you a down payment to your first home on your wedding day, or a grandmother who dies and leaves you a house that is fully paid off. There are other forms of critical inheritance, like having relatives with good jobs instead of being the only person in your family to have an income above $50,000 or having parents with Masters Degrees and grandparents who are MIT alumni. Whites are more likely to have these benefits than blacks, in large part because much American power is passed from parent to child (think about how many universities didn’t even start admitting black people until the 1970s and 1980s?). To say that the wealth gap is simply due to black people mismanaging their money is like bombing someone’s house for three months and then criticizing them for not dusting the coffee table. Having 400 years of targeted policy in favor of whites is what led to the wealth imbalance which exists in America. Since targeted policies are what created the problem, targeted policy is what should be used to fix it.
I am surprised that President Obama would express confidence in a chairman who would make such a misguided statement about the source of America’s wealth imbalance. This helps me to understand why the Obama Administration has been reluctant to consider meaningful economic policy which supports the African American community (notice that the president avoids such questions and only spoke on race during the admittedly sloppy defense of his Harvard homeboy Henry Louis Gates). It’s simple: Obama’s advisors don’t seem to remember that slavery took place. They at least don’t think that the economic marginalization of slavery and Jim Crow could possibly impact the present, and they don’t seem to want to understand how to use economic policy to fix the imbalance.
Bernanke is not the only financial leader in the Obama Administration who seems to be a victim of white supremacist thinking. Lawrence Summers, head of the National Economic Council, showed tremendous disrespect toward Dr. Cornel West during his time at Harvard. Not only was Summers attempting to undermine the value of Dr. West’s research, he engaged in the ironically typical act of arguing that the work of Dr. West does not qualify as meaningful scholarship. Given that Dr. Summers is a member of the same academic discipline that I am (Financial Economics), I know his elitism well; finance is a field where black folks need not apply when it comes to obtaining positions of influence and power. When I got my PhD in Finance in 2002, I was the only African American on the planet to get that degree in that year. Most of my colleagues hate what I do for black people.
Summers, like many other white scholars across America, seems to have a nasty and elitist habit of believing that anything that is different must be inherently inferior. When you are part of the arrogant academic nobility (as Summers is – his uncle won a Nobel Prize in Economics – another form of inheritance that has benefited him tremendously), you are also tempted to believe that if you don’t understand something, it must be without value. Summers has also shown a tendency toward sexism, as he stated in 2005 that there may be biological reasons that women are less likely to pursue careers in math and science. Perhaps he thinks that their breasts get in the way while solving math problems.
One would hope that Obama would appoint economic policy makers in Washington with a broader ability to understand the impact that history has on the present. With the long list of academic credentials possessed by Obama’s economic team, many of his teammates are unimpressive when it comes to displaying the diversity in their backgrounds necessary to find creative solutions to critical problems. Based on Fed Chair Bernanke’s very limited understanding of the wealth gap in America, it is hard to imagine that he might actually be able to solve a problem that he doesn’t even understand. President Obama should go talk to Bernanke about slavery to make sure he is aware that it happened. It might help him make better decisions.
Dr. Boyce Watkins is a Professor at Syracuse University and founder of the Your Black World Coalition. He is also the author of the forthcoming book, “Black American Money.” For more information, please visit www.BoyceWatkins.com.