October 21, 2020 • 32 mins
Professor Darrick Hamilton is one of the country’s leading economists examining racial disparities. He joins Pete to discuss his impactful work in the emerging field of stratification economics, his ideas on how to close our wealth gap, how to make our economy more equitable, and what his proposal for "baby bonds" can do for our future of society.
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Speaker 1 (00:05):
Hi, I'm Pete Buttah judge, and this is the deciding decade.
Our economy is in rough shape right now. There's no
denying that. Well, some people, of course deny it, and
they mostly work in the White House. But even before
COVID mis terrible crash, we were all wrestling with the
glaring issues within our economic system. On the campaign trail,
(00:28):
I certainly learned a lot debating my competitors, and I
think you'll see in the conversation with my guest today
who I should say it was an active Bernie supporter,
that we really all do tend to agree on the
fundamentals much more than we disagree on some of the specifics.
This is the time for all of us to be
thinking about how we can rebuild our economy better than
ever before, and that means actively thinking about and considering
(00:52):
the factors that have shaped our economic system, namely racial
and social inequities. When it comes to delivering greater racial
equality and preparing a future generation for success, two different
questions are coming before us at the same time. How
do we save our economy in the context of the
pandemic and how do we make permanent decisions that will
make our society and our economy more equitable. My guest
(01:17):
today is Professor Derrick Hamilton's of the New School. He
is the founding director of the New Institute for the
Study of Race, Stratification and Political Economy. He's leading scholar
in a field called stratification economics. I'm going to ask
him what that means. He's someone whose work largely focuses
on the causes, consequences, and remedies of racial and ethnic
(01:37):
inequality in our economic, health and education systems, and his
ideas on how to close our wealth gap and move
our society towards greater equity and civic participation have had
a big impact on how our country and figures in
politics and governments now talk about economic equality. Welcome, professor,
Really great to have you, so glad to be here,
and thank you for that introduction and everything thing that
(02:00):
you have done and are continuing to do well. Thanks.
I'm really excited to be able to talk. Just before
we jump into economics and policy, I wonder if I
could start on a more personal note, if I may.
You've been opened in the past about how the experience
of losing your parents in high school shape your trajectory
and I think we're at a moment right now where
our country is facing loss and many are experiencing levels
(02:25):
of personal vulnerability and pain. What do you say that
that experience propelled you into the field of economics, and
how has it shaped the way that you think about
your work. I mean, there's no question that's had profound
influence on my life. And you know, we get compelled
in ways that we may or may not completely understand.
I've tried to shy away from using my experience as
(02:47):
if I'm more expert than someone, but I also embrace
my experience and I am proud of it and want
to honor what my parents have done and try to
create a different and pathway because I believe ultimately it
was stressed it killed them. I believe that my parents
desired for their children to have better outcomes in their lives.
(03:09):
I mean, I grew up in bed forst Iverson. We
did not have um silver spoons, but you know, they
were working class individuals and they desired for us, me
and my sister and other siblings to be able to
go to the best education they could afford, and and
in so doing they were in over their heads and
(03:29):
being able to provide that those tuition dollars. Do you
feel like there's still a sense of detachment from the
kind of life stories and experiences you're talking about and
the discipline of economics, and I remember arriving in in
college and and feeling like, you know, they call it
the dismal science. It's a field that's viewed as a
washing numbers and sometimes maybe aloof to the concerns of
(03:52):
everyday life. How did that strike you when you were
first studying, and how does that now strike you as
as a professional and leading ECONO scholar. The discipline of
economics purports itself as being scientific, as being rigorous, and
if you could see me, I would have air quotes up.
It is supposed to be and I'm using again air
(04:14):
quotes a serious endeavor that doesn't involve feelings. But the
problem is, ironically did it almost becomes dogmatic to think
of us as atomistic agents floating around and that by
our sheer efforts, our share no how we will be
compelled into distribution. I think is a problematic understanding of society.
(04:39):
There is a whole lot of value and usefulness that
comes out of economics, but there's great limitations and I'd
say that at the root of those limitations is a
conception of power, a conception that we aren't just atimistic
agents floating around, that there are power dynamics by which
we enter relationships beyond even income. So one race, one's
(05:01):
gender sadly might have productive capacities in individual transactions, and
you know, we would desire that that's not the society
we live in. We would hope that we're able to
live by what we purport, which is individual effort, ingenuity
and know how could lead to one having agency and
(05:22):
determining their outcome. But that's an aspiration, and in order
to achieve that aspiration, I think it's critical for us
to understand structures that aren't just random, that are cumulative
effects of our past that have led to institutions as
well as relationship dynamics by which one's identity could have
(05:44):
impact in transaction. So is it safe to say that's
a definition of stratification economics, that that it's a kind
of economics that takes account for these forms of power
in these kinds of structures. That pretty much is what
it is. It's trying to build and improve upon the
discipline of economics at its foundation, but also incorporate ideas
(06:04):
from sociology when one thinks about social hierarchy and identity
ideas from social psychology, when one thinks about the role
in which things like cognitive dissonance, things like stereo type threat,
social stigma might impact relationship, political science understanding power. It
(06:25):
tries the fusing ideas from multiple disciplines to understand how
identity itself can have productive capacities. So this comes to
the heart of one of the things that I think
is most interesting about your work, which is this question
or this tension between policies that are neutral at least
on their face when it comes to things like race,
(06:46):
and policies that take account of that. For example, you're
one of the leading proponents of the concept of baby bonds, which,
if I understand it right and in your conception, is
a universal program. It has impact on things like the
racial wealth app but it would be set up in
a way that every infant born in America gets an
endowment that one day they are able to tap into
(07:08):
and use for whatever purpose suits them best. In other words,
in its design, it sounds like a race neutral or
I might even say color blind policy. At the same
time you've spoken about reparations. The definition you just offered
a stratification. Economics talks about why we have to take
account of the primary, not just peripheral effects of things
(07:30):
like race and gender and economic outcomes. And I assume
that means also in our policies. So how do you
weigh those things? How do you fit together a worldview
and a policy program that includes both things that have
a race neutral design and things that specifically contemplate the
specific racial reasons or other structural reasons why we have
(07:54):
the inequalities we do today, right, And let me say
a couple of things at the outset, which is baby
bonds is not intended to replace reparations, but rather compliment reparations.
Reparations is a retrospective approach that's aimed at addressing both
racial injustice as well as economic injustice that's specific towards
(08:15):
those people that were affected by that previous injustice. Baby Bonds,
on the other hands, is a prospective policy aimed at
endowing everybody at birth, independent of their race, gender, or
other characteristic with at least the capital foundation. And let
(08:35):
me be careful, you know, I know you use the
term race neutral and color blind to elicit a response,
and and the response is, in fact, it's intended by
design to not be race neutral or color blind, to
rather redress some of the racist structures that have led
to disparate outcomes that endowment based on one's race, or
(08:58):
even patriarchy in our society, in which we might leave
an inheritance to a male offspring different than a female
off spring. It's saying that as a birthright, regardless of
the circumstance in which you're born in terms of class, gender, race,
you will have provided to you a capital endowment that
(09:20):
you can use when you become an adult, so that
you will have a chance to accumulate assets over your
life course. Because blacks and whites are so disparate in
terms of wealth, it becomes actively anti racist if one
the criteria for inclusion is wealth and to the outcome
(09:40):
intended to be redressed is wealth. We know a lot
of the New Deal policies, by both design and implementation,
were actively racist, although they were seemingly race neutral. For example,
social Security at its inception excluding domestic and agricultural workers,
whom at the time black women who were employed of
(10:04):
them worked in that field, and over half of black
men was a design issue that was racist, right, So
there's no mention of race in the text of the policy,
but the text of the policy excludes whole categories of workers,
and the effect of that is unmistakably and profoundly racist.
Its perfect. And you know, it would be naive to
(10:24):
think that that was discoincidental. I mean, it wasn't designed
in a vacuum. So now thinking about baby bonds, although
it might facially and again I'm putting air quotes up
seeing race neutral, it was intentional in its design and
as well as the implementation to be anti racist, not
exclusionary for certain race groups, because of course there are
(10:46):
many white individuals that grow up without assets or access
to assets as well. At birth, you would be seated
at this account in a progressive way based on the
family position in which you're born, and the less wealthy
you are, the bigger you're, the bigger your initial endowment.
Is that the idea, that's right, that's right, um. And
then when you become a young adult it is restricted
(11:08):
not to be paternalistic, but it's restricted because the program
design is aimed at addressing wealth inequality to some asset
enhancing endeavor, and that would be something like owning a
home basically a down payment on a home, some seed
capital to start a business, or being able to finance
an education without debt. And if you're not ready to
(11:30):
use it, you won't be forced to use it. It
could roll over in an i R A type retirement
account until you're ready to use it or you have
resources to additional resources towards your retirement. I want to
(11:56):
come back to what you were saying about the New Deal.
You mentioned some of the ways that the Deal one
point oh helped create a lot of white wealth, but
its implementation and even its design was something that really
increased racial inequity in a lot of ways. I've heard
you speak of a new new deal, So what has
to happen, you know, not just theoretically, but maybe politically,
(12:17):
so that new deal two point oh, if we're headed
that way, can do better when it comes to equity
than the original. You know, I think the New Deal
is a good model. That the problem and the lessons
to learn from the New Deal is that maybe the
new iteration we should call it anti racist, anti sexist
New Deal, so that we are actively creating design and
(12:38):
implementation issues that are inclusive. The New Deal was racist
by design and implementation, but there's still lessons to be
to be gathered. It created an asset based white middle class.
It provided literal entitlements and we don't like this word
in our political jargon today, but it was they were
(12:58):
set aside and giveaway literally giveaways as part of the
New Deal. Those giveaways weren't to, you know, disincentivize people.
They were give to give people a foundation so they
can build upon. So I think the lesson is government
has a role to provide a set amount of economic
resources so that people can have agency in their lives.
(13:20):
If you don't have capital, you don't have agency. The
other lesson from the New Deal is that there was
no one silver bullet. Policy was comprehensive. It was resources
dedicated towards education, towards home ownership, towards actually having a job,
where the government literally provided jobs to people. I mean
it was jobs that built our infrastructure. So I think
(13:43):
those are clear lessons to learn and think about what
we can apply today, not only to redress our pandemic
emergency and risk of going into a depression, but to
build a new future promoting shared prosperity. Now, you mentioned
that that other dimension of the new Deal, not just
(14:03):
the entitlement part, but the work part, creating an opportunity
for more people to work. There are trails and parks
and structures right here in South Bend, for example, down
by our river. We still call it the w p
A Walk because it's it was built by people in
the Works Progress Administration under the New Deal. But if
if I'm not mistaken, that program did not include a
(14:24):
guarantee of work for every American. You've proposed a federal
jobs guarantee. How's that different and why is that important
at a time like this. The w p A might
not have used the word guarantee, but in a lot
of places it was practically a guarantee. Not only will
it ensure that anyone who desires to work will have
(14:45):
a productive job, but it will provide one of the
best labor market bargaining power for existing workers already in place.
And that is the removal of the threat of unemployment.
So if we think about a lot of workers, you know,
I use this example a lot. If you know our
society where women put up with a lot of sexual
(15:06):
harassment at work. If you're a waitress working somewhere to
feed your child, and your livelihood is dependent upon your job,
and you put up with some customer as well as
co worker discrimination. Having the ability of an alternative is empowering.
You can tell the customers and your and your employer
(15:27):
right then and there that this is not tolerable without
the threat that you won't have that job and literally
be a poper. And one of the main things we've
seen right now, I think, is the reduction in the
power of workers over the years. Right So this sounds
like this speaks to it again, that power equation you
were talking about. In the ways that you approach economics,
a lot of our rhetoric around work has to do
(15:49):
with disciplining workers. We want to keep workers sufficiently uh
sufficiently low wage so that employers will have greater leverage.
That that is some horrible rhetoric, and in the framing
of political economy that we ultimately need to change a
notion that if we simply have supply side economic policies,
(16:13):
that this is going to create some dynastism that's gonna
trickle down to all of us. We have not observed that,
we've observed stagnant wages and all the productivity gains in
America going to those that are elite and wealthy for
the last fifty years, and a lot of that has
been the result of that narrative and that policy framing,
which something like a federal job guarantee does. It flips
(16:36):
that narrative on its head. It says, let's discipline the workplace.
If you want to hire American workers, you have to
at least offer this level of wages. Right. It becomes
a way of ensuring that at a minimum, you will
have decent wages, decent benefits, and decent working conditions so
(16:56):
that you really can have agency and dignity in your life. Now,
another remarkable thing that happened this year was again because
of an emergency, the fact that the federal government cut
a check to every American. So, when I was campaigning
for president, Andrew Yang was a proponent of the idea
of universal basic income. And it was an idea that
that had been discussed a little bit, but felt pretty
(17:18):
far out to be discussed by a presidential candidate. And
yet a few months later, after Andrew and I left
the race, it was actually happening almost overnight with bipartisan consensus. True,
not a policy of universal basic income, but a decision
to send income to every American. I remember you told
(17:39):
me earlier that your skeptical of universal basic income, but
you support guaranteed income. So first of all, what's the
difference between those two things? And then why is guaranteed
income a better approach than what we think of when
we hear about that idea of universal basic income or
or u b I. So universal basic income, as discussed
(18:00):
by Yang during the campaign, was one where every American
would get the same dollar amount, regardless of income and everything.
To me, that approach dilutes the power of income. It
is almost a definition of inflation that you literally have
raised the price level and income by a certain dollar amount.
(18:24):
Another problem is that you are almost definitionally subsidizing the
wealth of those that are wealthy, because those that are
wealthy don't have to consume that money because they have
a good amount of consumable income to begin with, so
they end up using it to increase their portfolio asset portfolio,
where poor person by definition is a subsistence person and
(18:47):
ends up spending that money. So that's another It becomes
inequality enhancing, and then another critique is, you know, even
in his proposal, it included a tragic choice on poor
people in my estimation, where they would be asked to
choose between the basic income or some of the social
(19:07):
safety net benefits that they're currently getting. So asking a
poor person to choose between tannif or SNAP or some
other asset that they might be getting in order to
receive the basic income that that also is not only
not necessarily improving their their real situation. But again, why
(19:27):
are we asking poor people to make these type of
tragic choices. They don't have adequate income, and if we
want to address that, then simply offer them those resources
so that they can make really good decisions in their lives.
So I guess I saw the framing also as grounded
in this neoliberal notion that as a substitute for our
(19:50):
current social safety net that will supply people with income. No,
there's certain issues in which our social safety net is
still very valid, you ble, and needs additional investments not divestment.
Given those critiques, I am totally on board with the
principle that we can literally eliminate poverty in America by
(20:12):
offering income, an adequate amount of income to lift everybody
out of poverty. We we have enough resources in America
by using the tax code. The earned income tax structure
is basically a negative income tax. We made a political
decision to restrict it only to those people that are working.
But that's a political decision. From an economic standpoint, we
(20:35):
could we could literally offered earned income tax credit, called
it something else. If you want guaranteed income, we can
use the tax code to literally eliminate poverty in America
and stretch out their earned income tax well beyond working poverty,
towards lifting families up to the middle class. So I
(21:07):
want to pull you again in a little more into
the realm of politics. The Democratic Party is famously a
big tent. We've got a lot of different voices, a
lot of different perspectives. You were involved with Bernie Sanders campaign.
You're a proponent of baby bonds, which was championed by
Corey Booker, among others. So even though I think you
were most involved with with Team Sanders, you've worked with
(21:28):
Democratic candidates and policymakers really across the party. I wonder
what lessons you might have learned or what conclusions you
might have drawn about what the party is and where
the party is headed, and how fractured or unified we
might be on my side of the aisle, especially as
we contemplate what it might look like to govern under
(21:51):
a potential Biden administration and perhaps even with the Senate majority.
If we think about the Democratic Party more broadly, we've
moved a lot. The party has moved a great deal
that it still has a long way to go. But
if we think about the conversations on those debate stages
this round versus years past, we gotta recognize there's been progress.
(22:14):
The conversations around race are not as euphemistic as they
have been in the past. We can have a conversation
about reparations. I love the fact that it almost became
a platform idea that everybody was at least at the
stage of HR forty. Um, of course we need to
go further or whatever, but but that's progress. Um. The
(22:35):
biggest constraint on the Democratic Party is pago. Pago is
an albatross on the Democratic Party that big ideas get
stopped before they even get started by this notion of
how are we gonna pay for it? And now again
let's add some context. We just passed a two trillion
dollar tax cut over the next decade that is simply
(22:56):
gonna enrich those that are at the top exact surveyed
ratio inequality and PAGO or how are we gonna pay
for it? Had nothing to do with the conversation, and
it will furtherly constrain future big ideas if we're stuck
in this PAGO framework. So so let's acknowledge that. Let's
acknowledge that empirical reality. And you know, in terms of
(23:19):
the conversation around whether deficits are bad for our country
or not, maybe we shouldn't even talk about investments in
the American people as deficits. Maybe we should talk about
them just as that investments in the American people. We
somehow had the magic belief that if we cut tax
rates on corporations that was gonna deliver growth in our
(23:42):
economy to overcome the deficits. They would pay for itself. Yeah, exactly.
We We tried it, and it didn't. It's it's not
a theoretical question anymore. I Mean. One of one of
the things that amazed me seeing uh, the economist Arthur
Laugher right get the Presidential Medal of Freedom was the
this is an econos To who theorized that if you
(24:02):
cut taxes on the wealthy, you'd actually wind up with
more revenue coming into the treasury. And they tried it
and the opposite happened. It was called the Laugher curve,
right it empirically it just failed. And yet this individual
was highlighted at a White House ceremony. I do wonder,
just intellectually, where do you think the Republican Party is
gonna wind up? As you said, they don't seem to
(24:23):
actually be committed to fiscal discipline. There's definitely uh, not
a lot of what we used to hear in terms
of beliefs about personal conduct, or or or rectitude or
even faith, national security. Some of the ideas that held
together at least the Republicans that growing up in Indiana
that I knew, seemed to have been just detonated by
this administration. Do you think there is some kind of
(24:48):
intellectual future for conservatism or is the GOP not even
a conservative party anymore? The Republican Party and the whole
neoliberalism that even many people on the on the Democrats
side adhered to and put forth, that narrative is very
powerful because it's about agency. They used terms like choice, freedom,
(25:09):
and um. They also used race in a strategic way.
They also demonized the government in a way of tilting
the scale in favor of undeserving welfare queens, undeserving deadbeat dads,
and super predators. Those narratives were very appealing, and they
were appealing to Democrats, Republicans, blacks and whites alike. You know,
(25:32):
when I was coming up, a lot of my brethren
brought into the notion that if I just went to
that Ivy League college, I too could be make it
in America. I'll do better than those black people that
aren't pulling their pants up. You know what has happened now,
and what might be driving a new narrative, is that
we had a generation that came of age during the
(25:53):
last Great Recession, whose job market prospects were dismal, who
went to college because we told them, go to college,
get some skills, better yourself so you can have a
great future, ended up accruing inordinate amounts of debt. And
now we're facing this pandemic and they have not brought
(26:15):
into that rhetoric. They are fighting back. They are promoting
a new framing that is grounded in justice, that is
saying we don't care um. Racial injustice is intolerable, gender
injustice is intolerable, The risk of our planet going under
two climate catastrophes is intolerable, and we are fighting back,
(26:39):
and we demanded our government act. So hopefully this is
a overten time period in which we can get new
narratives that I think are are more factual and grounded
in reality, as well as policies that are accompany those
narratives to really get us towards economic, racial, and ender justice.
(27:01):
So one last policy question which has really I would
say statistically many, if not most, people my age or
any younger, are on track for a problem when it
comes to retirement. The rhetoric around social Security is overblown.
Of course, if if we make some reasonable adjustments to
the way that Social Security is funded, it will definitely
(27:21):
be there and will be solvent well passed when I'm
planning to retire. But it is true that more and
more Americans don't have the retirement savings or aren't on
track for the retirement savings that they're going to need.
So so many of the ideas that we've talked about
that you've described during our conversation or prospective. The idea
of baby bond will set up somebody who's going to
(27:42):
be retiring in the twenty nineties beautifully, But what about
somebody who's going to be retiring in the twenty fifties
or the twenty sixties. What steps have to accompany those
things that are going to build us up for the
long run to better serve that generation that did come
of age during this season, in between the Great Recession
and whatever we're going to call this pandemic recession and
(28:04):
those to come after. You know you're framing of on track.
I think it's spot on because using the framing on
track means that we could have a different track. That
it's not our destiny. That is something else that I
think I would love for the American people to to
grasp that inequality, despair is not destiny, but really policy choices.
(28:25):
Take baby bonds because you presented it as an example.
The only reason why I started with babies was political
to refute the narratives around deserving and undeserving. It's hard
to to argue that the baby is deserving or undeserving.
The baby didn't make any choices, right, It's the original
position or as close as we get to it, that's right.
But but the key policy feature is capital itself. Ensuring
(28:49):
that young adults have capital. We could have started when
people are eighteen, seventeen, etcetera. That's that's not the critical
policy design. So similarly, you know, we can make a
different policy choice for millennials. For I even forget Generation Z,
almost forgot the name of the generation. We can make
different policy choices, but that generation to alter the track
(29:13):
that their life course might be on right now if
we do nothing so that they two can have economic
security as we think to the future, because I'm convinced
that the twenties will be the decade that shapes the
way that things unfold in the country for the rest
of our lives. And I will just ask you to
consider if if a young black man is born tomorrow
in Bedford Stuyveson, how's his life going to be different,
(29:36):
and how's it going to be similar to yours? What
are the circumstances that he's going to see him grow
up in and how might they compare to what would
have been true the day you were born. I'm gonna
be tongue in cheek and respond to you that bed
sty today is very different than be fair enough, they
would be growing growing up in a million dollar home today,
but but just the different. It's a very different Brooklyn. Right,
(29:59):
that's but the point of your question. I would say
that they're living in a new political economy, where again,
if we use that word overton, they are coming up
with social movements today. They could very well change their
realities in ways that my generation unfortunately got seduced into
(30:22):
a different political rhetorical reality. Yeah, the potential there is enormous, right,
I imagine the potential for mischief as well as for
great things to come. But of course that'll be up
to us to set them up for success by the
time they're taking over for for the generations who were
making decisions now, that's right. One other lesson to learn
from the New Deal is when f DR said make
(30:46):
me do it when he was talking about his his
actions with regards the policy, when progressives with trying to
push him, Uh, you know, he was again being tongue
in cheque, making a case to build the political movement.
So did I have to do it? And I think
that's the lesson to to the American people today that
you know, again our despair and inequality is not our destiny.
(31:07):
We could talk about individual politicians and policymakers, but at
the end of the day, the power rests with us.
It is our economy, it is our money, and it
is our government. And when we see it, that's when
the change towards shared prosperity will happen. What a great conversation,
(31:34):
and hopefully you can see why. I think that Professor
Hamilton's is going to be really shaping a lot of
policy conversations in the years ahead, and especially as we
try to confront the economic situation our country is in
and the need for racial justice and equity. There's so
many ways where that can be one and the same,
and whether it's baby bonds or some of the other
ideas he discussed, I think that that conversation brings out
(31:56):
why that's true. I hope you enjoyed it as much
as I did, and I'm looking forward seeing where these
policy opportunities shape up in the years ahead. For more
podcasts from my Heart Radio, visit the I Heart Radio app,
Apple Podcasts, or wherever you listen to your favorite shows.
Hi, I'm Pete Buttah judge, and this is the deciding decade.
Our economy is in rough shape right now. There's no
denying that. Well, some people, of course deny it, and
they mostly work in the White House. But even before
COVID mis terrible crash, we were all wrestling with the
glaring issues within our economic system. On the campaign trail,
(00:28):
I certainly learned a lot debating my competitors, and I
think you'll see in the conversation with my guest today
who I should say it was an active Bernie supporter,
that we really all do tend to agree on the
fundamentals much more than we disagree on some of the specifics.
This is the time for all of us to be
thinking about how we can rebuild our economy better than
ever before, and that means actively thinking about and considering
(00:52):
the factors that have shaped our economic system, namely racial
and social inequities. When it comes to delivering greater racial
equality and preparing a future generation for success, two different
questions are coming before us at the same time. How
do we save our economy in the context of the
pandemic and how do we make permanent decisions that will
make our society and our economy more equitable. My guest
(01:17):
today is Professor Derrick Hamilton's of the New School. He
is the founding director of the New Institute for the
Study of Race, Stratification and Political Economy. He's leading scholar
in a field called stratification economics. I'm going to ask
him what that means. He's someone whose work largely focuses
on the causes, consequences, and remedies of racial and ethnic
(01:37):
inequality in our economic, health and education systems, and his
ideas on how to close our wealth gap and move
our society towards greater equity and civic participation have had
a big impact on how our country and figures in
politics and governments now talk about economic equality. Welcome, professor,
Really great to have you, so glad to be here,
and thank you for that introduction and everything thing that
(02:00):
you have done and are continuing to do well. Thanks.
I'm really excited to be able to talk. Just before
we jump into economics and policy, I wonder if I
could start on a more personal note, if I may.
You've been opened in the past about how the experience
of losing your parents in high school shape your trajectory
and I think we're at a moment right now where
our country is facing loss and many are experiencing levels
(02:25):
of personal vulnerability and pain. What do you say that
that experience propelled you into the field of economics, and
how has it shaped the way that you think about
your work. I mean, there's no question that's had profound
influence on my life. And you know, we get compelled
in ways that we may or may not completely understand.
I've tried to shy away from using my experience as
(02:47):
if I'm more expert than someone, but I also embrace
my experience and I am proud of it and want
to honor what my parents have done and try to
create a different and pathway because I believe ultimately it
was stressed it killed them. I believe that my parents
desired for their children to have better outcomes in their lives.
(03:09):
I mean, I grew up in bed forst Iverson. We
did not have um silver spoons, but you know, they
were working class individuals and they desired for us, me
and my sister and other siblings to be able to
go to the best education they could afford, and and
in so doing they were in over their heads and
(03:29):
being able to provide that those tuition dollars. Do you
feel like there's still a sense of detachment from the
kind of life stories and experiences you're talking about and
the discipline of economics, and I remember arriving in in
college and and feeling like, you know, they call it
the dismal science. It's a field that's viewed as a
washing numbers and sometimes maybe aloof to the concerns of
(03:52):
everyday life. How did that strike you when you were
first studying, and how does that now strike you as
as a professional and leading ECONO scholar. The discipline of
economics purports itself as being scientific, as being rigorous, and
if you could see me, I would have air quotes up.
It is supposed to be and I'm using again air
(04:14):
quotes a serious endeavor that doesn't involve feelings. But the
problem is, ironically did it almost becomes dogmatic to think
of us as atomistic agents floating around and that by
our sheer efforts, our share no how we will be
compelled into distribution. I think is a problematic understanding of society.
(04:39):
There is a whole lot of value and usefulness that
comes out of economics, but there's great limitations and I'd
say that at the root of those limitations is a
conception of power, a conception that we aren't just atimistic
agents floating around, that there are power dynamics by which
we enter relationships beyond even income. So one race, one's
(05:01):
gender sadly might have productive capacities in individual transactions, and
you know, we would desire that that's not the society
we live in. We would hope that we're able to
live by what we purport, which is individual effort, ingenuity
and know how could lead to one having agency and
(05:22):
determining their outcome. But that's an aspiration, and in order
to achieve that aspiration, I think it's critical for us
to understand structures that aren't just random, that are cumulative
effects of our past that have led to institutions as
well as relationship dynamics by which one's identity could have
(05:44):
impact in transaction. So is it safe to say that's
a definition of stratification economics, that that it's a kind
of economics that takes account for these forms of power
in these kinds of structures. That pretty much is what
it is. It's trying to build and improve upon the
discipline of economics at its foundation, but also incorporate ideas
(06:04):
from sociology when one thinks about social hierarchy and identity
ideas from social psychology, when one thinks about the role
in which things like cognitive dissonance, things like stereo type threat,
social stigma might impact relationship, political science understanding power. It
(06:25):
tries the fusing ideas from multiple disciplines to understand how
identity itself can have productive capacities. So this comes to
the heart of one of the things that I think
is most interesting about your work, which is this question
or this tension between policies that are neutral at least
on their face when it comes to things like race,
(06:46):
and policies that take account of that. For example, you're
one of the leading proponents of the concept of baby bonds, which,
if I understand it right and in your conception, is
a universal program. It has impact on things like the
racial wealth app but it would be set up in
a way that every infant born in America gets an
endowment that one day they are able to tap into
(07:08):
and use for whatever purpose suits them best. In other words,
in its design, it sounds like a race neutral or
I might even say color blind policy. At the same
time you've spoken about reparations. The definition you just offered
a stratification. Economics talks about why we have to take
account of the primary, not just peripheral effects of things
(07:30):
like race and gender and economic outcomes. And I assume
that means also in our policies. So how do you
weigh those things? How do you fit together a worldview
and a policy program that includes both things that have
a race neutral design and things that specifically contemplate the
specific racial reasons or other structural reasons why we have
(07:54):
the inequalities we do today, right, And let me say
a couple of things at the outset, which is baby
bonds is not intended to replace reparations, but rather compliment reparations.
Reparations is a retrospective approach that's aimed at addressing both
racial injustice as well as economic injustice that's specific towards
(08:15):
those people that were affected by that previous injustice. Baby Bonds,
on the other hands, is a prospective policy aimed at
endowing everybody at birth, independent of their race, gender, or
other characteristic with at least the capital foundation. And let
(08:35):
me be careful, you know, I know you use the
term race neutral and color blind to elicit a response,
and and the response is, in fact, it's intended by
design to not be race neutral or color blind, to
rather redress some of the racist structures that have led
to disparate outcomes that endowment based on one's race, or
(08:58):
even patriarchy in our society, in which we might leave
an inheritance to a male offspring different than a female
off spring. It's saying that as a birthright, regardless of
the circumstance in which you're born in terms of class, gender, race,
you will have provided to you a capital endowment that
(09:20):
you can use when you become an adult, so that
you will have a chance to accumulate assets over your
life course. Because blacks and whites are so disparate in
terms of wealth, it becomes actively anti racist if one
the criteria for inclusion is wealth and to the outcome
(09:40):
intended to be redressed is wealth. We know a lot
of the New Deal policies, by both design and implementation,
were actively racist, although they were seemingly race neutral. For example,
social Security at its inception excluding domestic and agricultural workers,
whom at the time black women who were employed of
(10:04):
them worked in that field, and over half of black
men was a design issue that was racist, right, So
there's no mention of race in the text of the policy,
but the text of the policy excludes whole categories of workers,
and the effect of that is unmistakably and profoundly racist.
Its perfect. And you know, it would be naive to
(10:24):
think that that was discoincidental. I mean, it wasn't designed
in a vacuum. So now thinking about baby bonds, although
it might facially and again I'm putting air quotes up
seeing race neutral, it was intentional in its design and
as well as the implementation to be anti racist, not
exclusionary for certain race groups, because of course there are
(10:46):
many white individuals that grow up without assets or access
to assets as well. At birth, you would be seated
at this account in a progressive way based on the
family position in which you're born, and the less wealthy
you are, the bigger you're, the bigger your initial endowment.
Is that the idea, that's right, that's right, um. And
then when you become a young adult it is restricted
(11:08):
not to be paternalistic, but it's restricted because the program
design is aimed at addressing wealth inequality to some asset
enhancing endeavor, and that would be something like owning a
home basically a down payment on a home, some seed
capital to start a business, or being able to finance
an education without debt. And if you're not ready to
(11:30):
use it, you won't be forced to use it. It
could roll over in an i R A type retirement
account until you're ready to use it or you have
resources to additional resources towards your retirement. I want to
(11:56):
come back to what you were saying about the New Deal.
You mentioned some of the ways that the Deal one
point oh helped create a lot of white wealth, but
its implementation and even its design was something that really
increased racial inequity in a lot of ways. I've heard
you speak of a new new deal, So what has
to happen, you know, not just theoretically, but maybe politically,
(12:17):
so that new deal two point oh, if we're headed
that way, can do better when it comes to equity
than the original. You know, I think the New Deal
is a good model. That the problem and the lessons
to learn from the New Deal is that maybe the
new iteration we should call it anti racist, anti sexist
New Deal, so that we are actively creating design and
(12:38):
implementation issues that are inclusive. The New Deal was racist
by design and implementation, but there's still lessons to be
to be gathered. It created an asset based white middle class.
It provided literal entitlements and we don't like this word
in our political jargon today, but it was they were
(12:58):
set aside and giveaway literally giveaways as part of the
New Deal. Those giveaways weren't to, you know, disincentivize people.
They were give to give people a foundation so they
can build upon. So I think the lesson is government
has a role to provide a set amount of economic
resources so that people can have agency in their lives.
(13:20):
If you don't have capital, you don't have agency. The
other lesson from the New Deal is that there was
no one silver bullet. Policy was comprehensive. It was resources
dedicated towards education, towards home ownership, towards actually having a job,
where the government literally provided jobs to people. I mean
it was jobs that built our infrastructure. So I think
(13:43):
those are clear lessons to learn and think about what
we can apply today, not only to redress our pandemic
emergency and risk of going into a depression, but to
build a new future promoting shared prosperity. Now, you mentioned
that that other dimension of the new Deal, not just
(14:03):
the entitlement part, but the work part, creating an opportunity
for more people to work. There are trails and parks
and structures right here in South Bend, for example, down
by our river. We still call it the w p
A Walk because it's it was built by people in
the Works Progress Administration under the New Deal. But if
if I'm not mistaken, that program did not include a
(14:24):
guarantee of work for every American. You've proposed a federal
jobs guarantee. How's that different and why is that important
at a time like this. The w p A might
not have used the word guarantee, but in a lot
of places it was practically a guarantee. Not only will
it ensure that anyone who desires to work will have
(14:45):
a productive job, but it will provide one of the
best labor market bargaining power for existing workers already in place.
And that is the removal of the threat of unemployment.
So if we think about a lot of workers, you know,
I use this example a lot. If you know our
society where women put up with a lot of sexual
(15:06):
harassment at work. If you're a waitress working somewhere to
feed your child, and your livelihood is dependent upon your job,
and you put up with some customer as well as
co worker discrimination. Having the ability of an alternative is empowering.
You can tell the customers and your and your employer
(15:27):
right then and there that this is not tolerable without
the threat that you won't have that job and literally
be a poper. And one of the main things we've
seen right now, I think, is the reduction in the
power of workers over the years. Right So this sounds
like this speaks to it again, that power equation you
were talking about. In the ways that you approach economics,
a lot of our rhetoric around work has to do
(15:49):
with disciplining workers. We want to keep workers sufficiently uh
sufficiently low wage so that employers will have greater leverage.
That that is some horrible rhetoric, and in the framing
of political economy that we ultimately need to change a
notion that if we simply have supply side economic policies,
(16:13):
that this is going to create some dynastism that's gonna
trickle down to all of us. We have not observed that,
we've observed stagnant wages and all the productivity gains in
America going to those that are elite and wealthy for
the last fifty years, and a lot of that has
been the result of that narrative and that policy framing,
which something like a federal job guarantee does. It flips
(16:36):
that narrative on its head. It says, let's discipline the workplace.
If you want to hire American workers, you have to
at least offer this level of wages. Right. It becomes
a way of ensuring that at a minimum, you will
have decent wages, decent benefits, and decent working conditions so
(16:56):
that you really can have agency and dignity in your life. Now,
another remarkable thing that happened this year was again because
of an emergency, the fact that the federal government cut
a check to every American. So, when I was campaigning
for president, Andrew Yang was a proponent of the idea
of universal basic income. And it was an idea that
that had been discussed a little bit, but felt pretty
(17:18):
far out to be discussed by a presidential candidate. And
yet a few months later, after Andrew and I left
the race, it was actually happening almost overnight with bipartisan consensus. True,
not a policy of universal basic income, but a decision
to send income to every American. I remember you told
(17:39):
me earlier that your skeptical of universal basic income, but
you support guaranteed income. So first of all, what's the
difference between those two things? And then why is guaranteed
income a better approach than what we think of when
we hear about that idea of universal basic income or
or u b I. So universal basic income, as discussed
(18:00):
by Yang during the campaign, was one where every American
would get the same dollar amount, regardless of income and everything.
To me, that approach dilutes the power of income. It
is almost a definition of inflation that you literally have
raised the price level and income by a certain dollar amount.
(18:24):
Another problem is that you are almost definitionally subsidizing the
wealth of those that are wealthy, because those that are
wealthy don't have to consume that money because they have
a good amount of consumable income to begin with, so
they end up using it to increase their portfolio asset portfolio,
where poor person by definition is a subsistence person and
(18:47):
ends up spending that money. So that's another It becomes
inequality enhancing, and then another critique is, you know, even
in his proposal, it included a tragic choice on poor
people in my estimation, where they would be asked to
choose between the basic income or some of the social
(19:07):
safety net benefits that they're currently getting. So asking a
poor person to choose between tannif or SNAP or some
other asset that they might be getting in order to
receive the basic income that that also is not only
not necessarily improving their their real situation. But again, why
(19:27):
are we asking poor people to make these type of
tragic choices. They don't have adequate income, and if we
want to address that, then simply offer them those resources
so that they can make really good decisions in their lives.
So I guess I saw the framing also as grounded
in this neoliberal notion that as a substitute for our
(19:50):
current social safety net that will supply people with income. No,
there's certain issues in which our social safety net is
still very valid, you ble, and needs additional investments not divestment.
Given those critiques, I am totally on board with the
principle that we can literally eliminate poverty in America by
(20:12):
offering income, an adequate amount of income to lift everybody
out of poverty. We we have enough resources in America
by using the tax code. The earned income tax structure
is basically a negative income tax. We made a political
decision to restrict it only to those people that are working.
But that's a political decision. From an economic standpoint, we
(20:35):
could we could literally offered earned income tax credit, called
it something else. If you want guaranteed income, we can
use the tax code to literally eliminate poverty in America
and stretch out their earned income tax well beyond working poverty,
towards lifting families up to the middle class. So I
(21:07):
want to pull you again in a little more into
the realm of politics. The Democratic Party is famously a
big tent. We've got a lot of different voices, a
lot of different perspectives. You were involved with Bernie Sanders campaign.
You're a proponent of baby bonds, which was championed by
Corey Booker, among others. So even though I think you
were most involved with with Team Sanders, you've worked with
(21:28):
Democratic candidates and policymakers really across the party. I wonder
what lessons you might have learned or what conclusions you
might have drawn about what the party is and where
the party is headed, and how fractured or unified we
might be on my side of the aisle, especially as
we contemplate what it might look like to govern under
(21:51):
a potential Biden administration and perhaps even with the Senate majority.
If we think about the Democratic Party more broadly, we've
moved a lot. The party has moved a great deal
that it still has a long way to go. But
if we think about the conversations on those debate stages
this round versus years past, we gotta recognize there's been progress.
(22:14):
The conversations around race are not as euphemistic as they
have been in the past. We can have a conversation
about reparations. I love the fact that it almost became
a platform idea that everybody was at least at the
stage of HR forty. Um, of course we need to
go further or whatever, but but that's progress. Um. The
(22:35):
biggest constraint on the Democratic Party is pago. Pago is
an albatross on the Democratic Party that big ideas get
stopped before they even get started by this notion of
how are we gonna pay for it? And now again
let's add some context. We just passed a two trillion
dollar tax cut over the next decade that is simply
(22:56):
gonna enrich those that are at the top exact surveyed
ratio inequality and PAGO or how are we gonna pay
for it? Had nothing to do with the conversation, and
it will furtherly constrain future big ideas if we're stuck
in this PAGO framework. So so let's acknowledge that. Let's
acknowledge that empirical reality. And you know, in terms of
(23:19):
the conversation around whether deficits are bad for our country
or not, maybe we shouldn't even talk about investments in
the American people as deficits. Maybe we should talk about
them just as that investments in the American people. We
somehow had the magic belief that if we cut tax
rates on corporations that was gonna deliver growth in our
(23:42):
economy to overcome the deficits. They would pay for itself. Yeah, exactly.
We We tried it, and it didn't. It's it's not
a theoretical question anymore. I Mean. One of one of
the things that amazed me seeing uh, the economist Arthur
Laugher right get the Presidential Medal of Freedom was the
this is an econos To who theorized that if you
(24:02):
cut taxes on the wealthy, you'd actually wind up with
more revenue coming into the treasury. And they tried it
and the opposite happened. It was called the Laugher curve,
right it empirically it just failed. And yet this individual
was highlighted at a White House ceremony. I do wonder,
just intellectually, where do you think the Republican Party is
gonna wind up? As you said, they don't seem to
(24:23):
actually be committed to fiscal discipline. There's definitely uh, not
a lot of what we used to hear in terms
of beliefs about personal conduct, or or or rectitude or
even faith, national security. Some of the ideas that held
together at least the Republicans that growing up in Indiana
that I knew, seemed to have been just detonated by
this administration. Do you think there is some kind of
(24:48):
intellectual future for conservatism or is the GOP not even
a conservative party anymore? The Republican Party and the whole
neoliberalism that even many people on the on the Democrats
side adhered to and put forth, that narrative is very
powerful because it's about agency. They used terms like choice, freedom,
(25:09):
and um. They also used race in a strategic way.
They also demonized the government in a way of tilting
the scale in favor of undeserving welfare queens, undeserving deadbeat dads,
and super predators. Those narratives were very appealing, and they
were appealing to Democrats, Republicans, blacks and whites alike. You know,
(25:32):
when I was coming up, a lot of my brethren
brought into the notion that if I just went to
that Ivy League college, I too could be make it
in America. I'll do better than those black people that
aren't pulling their pants up. You know what has happened now,
and what might be driving a new narrative, is that
we had a generation that came of age during the
(25:53):
last Great Recession, whose job market prospects were dismal, who
went to college because we told them, go to college,
get some skills, better yourself so you can have a
great future, ended up accruing inordinate amounts of debt. And
now we're facing this pandemic and they have not brought
(26:15):
into that rhetoric. They are fighting back. They are promoting
a new framing that is grounded in justice, that is
saying we don't care um. Racial injustice is intolerable, gender
injustice is intolerable, The risk of our planet going under
two climate catastrophes is intolerable, and we are fighting back,
(26:39):
and we demanded our government act. So hopefully this is
a overten time period in which we can get new
narratives that I think are are more factual and grounded
in reality, as well as policies that are accompany those
narratives to really get us towards economic, racial, and ender justice.
(27:01):
So one last policy question which has really I would
say statistically many, if not most, people my age or
any younger, are on track for a problem when it
comes to retirement. The rhetoric around social Security is overblown.
Of course, if if we make some reasonable adjustments to
the way that Social Security is funded, it will definitely
(27:21):
be there and will be solvent well passed when I'm
planning to retire. But it is true that more and
more Americans don't have the retirement savings or aren't on
track for the retirement savings that they're going to need.
So so many of the ideas that we've talked about
that you've described during our conversation or prospective. The idea
of baby bond will set up somebody who's going to
(27:42):
be retiring in the twenty nineties beautifully, But what about
somebody who's going to be retiring in the twenty fifties
or the twenty sixties. What steps have to accompany those
things that are going to build us up for the
long run to better serve that generation that did come
of age during this season, in between the Great Recession
and whatever we're going to call this pandemic recession and
(28:04):
those to come after. You know you're framing of on track.
I think it's spot on because using the framing on
track means that we could have a different track. That
it's not our destiny. That is something else that I
think I would love for the American people to to
grasp that inequality, despair is not destiny, but really policy choices.
(28:25):
Take baby bonds because you presented it as an example.
The only reason why I started with babies was political
to refute the narratives around deserving and undeserving. It's hard
to to argue that the baby is deserving or undeserving.
The baby didn't make any choices, right, It's the original
position or as close as we get to it, that's right.
But but the key policy feature is capital itself. Ensuring
(28:49):
that young adults have capital. We could have started when
people are eighteen, seventeen, etcetera. That's that's not the critical
policy design. So similarly, you know, we can make a
different policy choice for millennials. For I even forget Generation Z,
almost forgot the name of the generation. We can make
different policy choices, but that generation to alter the track
(29:13):
that their life course might be on right now if
we do nothing so that they two can have economic
security as we think to the future, because I'm convinced
that the twenties will be the decade that shapes the
way that things unfold in the country for the rest
of our lives. And I will just ask you to
consider if if a young black man is born tomorrow
in Bedford Stuyveson, how's his life going to be different,
(29:36):
and how's it going to be similar to yours? What
are the circumstances that he's going to see him grow
up in and how might they compare to what would
have been true the day you were born. I'm gonna
be tongue in cheek and respond to you that bed
sty today is very different than be fair enough, they
would be growing growing up in a million dollar home today,
but but just the different. It's a very different Brooklyn. Right,
(29:59):
that's but the point of your question. I would say
that they're living in a new political economy, where again,
if we use that word overton, they are coming up
with social movements today. They could very well change their
realities in ways that my generation unfortunately got seduced into
(30:22):
a different political rhetorical reality. Yeah, the potential there is enormous, right,
I imagine the potential for mischief as well as for
great things to come. But of course that'll be up
to us to set them up for success by the
time they're taking over for for the generations who were
making decisions now, that's right. One other lesson to learn
from the New Deal is when f DR said make
(30:46):
me do it when he was talking about his his
actions with regards the policy, when progressives with trying to
push him, Uh, you know, he was again being tongue
in cheque, making a case to build the political movement.
So did I have to do it? And I think
that's the lesson to to the American people today that
you know, again our despair and inequality is not our destiny.
(31:07):
We could talk about individual politicians and policymakers, but at
the end of the day, the power rests with us.
It is our economy, it is our money, and it
is our government. And when we see it, that's when
the change towards shared prosperity will happen. What a great conversation,
(31:34):
and hopefully you can see why. I think that Professor
Hamilton's is going to be really shaping a lot of
policy conversations in the years ahead, and especially as we
try to confront the economic situation our country is in
and the need for racial justice and equity. There's so
many ways where that can be one and the same,
and whether it's baby bonds or some of the other
ideas he discussed, I think that that conversation brings out
(31:56):
why that's true. I hope you enjoyed it as much
as I did, and I'm looking forward seeing where these
policy opportunities shape up in the years ahead. For more
podcasts from my Heart Radio, visit the I Heart Radio app,
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