Five Policy Proposals

Civil and economic rights. Sunset and sunrise laws—performance measures for governmental programs. Corporate initiatives in minority enterprise. New forms of federal programs. Restructured work incentives. A private CETA program. Black leadership.

What can black business and professional people do to develop alternatives for the 1980s? We can start by acknowledging that their role in the leadership of ideas needs to be altered. Traditionally, one can go back to Dr. Martin Luther King and A. G. Gastion, a black businessperson who supported him and aided him in his work. One can look at the boards of major civil rights organizations and see black business and professional people playing very key financial, logistical roles in the support of major ideas.

We need to see the development of independent black wealth in the black community

The difficulty has been that we have not had very many black business and professional people defending ideas that are heterodox, unpopular alternatives to the prevailing wisdom. We have not had that. And I would suggest that, as a prime objective of this decade, black business and professional people must now take a much more public and courageous role. As we are doing now, they must continually explore alternatives for our future. Hopefully, their exploration will help us determine our future.

I do not think our real mission has changed. I think the mission of black America, at least during my lifetime, has been to attain full participation for black Americans in American life. What I think has changed is that we are now in a new era. We were certainly in an era of civil rights for the past twenty years, but I think we are now in a new phase of the struggle, an era of economic rights. We need to see the development of independent black wealth in the black community.

Let us look at some specific proposals. We have a new administration, and I hope that these ideas will find their way into discussion as that administration goes about its planning.

The idea is to specify at the beginning of the proposal—when the sun first shines on it—exactly what performance measures you expect

We are very critical of government these days. We believe that too many agencies perpetuate themselves without an adequate process of renewal. There have been alternatives proposed to that. One has been the idea of "sunset laws"—that an agency be reviewed every three or four or five years, and maybe shut down. I offer an idea I have coined as "sunrise laws." I wish I could say that this is terribly original, but it simply borrows on basic management techniques in the private sector.

In private enterprises, if I were to propose a program having an effect on our profits or whatever, I have to specify before that program goes into effect certain performance measures. And those are going to be watched at certain junctures. If they are not achieved, then the program will be scrapped. But we do not always have those specific performance measures for governmental programs. So I suggest sunrise laws that force a legislator who is proposing a bill that is designed to change something to specify what it will change and how to measure that change and when that change will occur.

Let us say you want to spend—as happened several years ago—$200 million to improve educational scores of black children by 10 percent. That goal ought to be specified in the bill, and I would say that after a three-year interval or a twoyear interval we should check to see whether it comes within 70 percent of that performance goal. If it does not, then we might consider requiring a two-thirds vote of that legislature or of Congress to sustain the program. The idea is to specify at the beginning of the proposal—when the sun first shines on it—exactly what performance measures are expected. If it cannot get a passing grade, it ought to be scrapped. I hope that the idea will be explored with care because I think, not only that it can contribute to a better black America, I would like to think it could contribute to a better all of America.

You create black wealth through black enterprise

A second suggestion is that there be corporate initiatives. We have seen companies like Sears and Armco reach out to a minority enterprise, bring it in within their families of suppliers, work with it, strengthen it, make it able to survive on its own. Clearly, we need to be about the business of creating black wealth. You create black wealth through black enterprise. In order to strengthen black enterprise, given the late start we are getting in that area, I think corporations are going to need to take an extra step. That can be a profitable step. They can develop relationships with companies in the inner cities that are going to be able to provide goods and services at a lower cost than they might ordinarily be able to find.

I would also suggest that corporations recommit themselves vigorously to equal opportunity. Black enterprise will never be able to provide all the employment opportunities that black Americans need, so corporate America is going to have to respond to the employment needs of the black community. Businesses have an opportunity during the next four to eight years to see a lessening of regulation, a lessening of control. It is an opportunity for them to show leadership.

A low-bureaucracy way to spur teenage employment would be a youth-employment tax credit tied to a youth differential in the minimum wage

A third area of potentially helpful innovation is in a new form of governmental initiatives. One idea is "free enterprise zones." Earlier this year Governor Reagan committed himself to such a program. The idea was brought to public notice by Congressman Jack Kemp: in cooperation with local government, certain urban and rural areas would be designated as job and enterprise zones where individuals and companies would be subject to dramatically reduced tax rates. Designation as a job enterprise zone would depend on meeting tests of poverty and unemployment, and on the willingness of local government to reduce property taxes within each zone by 5 percent a year for four years in order to promote the development of new jobs. Congressman Kemp's proposal would reduce social security payroll taxes on employers and employees by 50 perceut for workers twenty-one and older and by 90 percent for those younger, thereby providing powerful incentives to hire unemployed youth. This is one initiative that needs to be explored.

The Urban Homesteading Act, which has been widely discussed, is a second idea. And third, I would suggest a youthemployment tax credit tied to a youth differential in the minimum wage. If the minimum wage is $3.10 per hour, let's have a youth differential of perhaps $2.10, but let's have that dollar picked up by the government as a tax credit. The youth gets paid the minimum wage, but the employer does not have to pay all of it. He pays only $2.10 of it; the rest is taken as a tax credit. A low-bureaucracy way in which we can spur the employment of youths.

I would tie this concept initially to the free enterprise zones—let's pilot this youth-employment tax credit in enterprise zones and do as Bernard Anderson has suggested—provide real incentives to hire young people. I do not think it is quite sufficient to assume that just a wage differential itself will provide the incentives. We need now to find a truly effective means to end the unemployment of youths, especially of black youths.

We also need to explore the idea of a private-sector CETA program. I do not think it is going to be politically expedient to wipe out that program entirely without a viable substitute. We need to explore a transition type of program. And I would suggest a private-sector CETA program different from the nonprofit and governmentally oriented program that we have known.

Additionally, I think that we need to restructure incentives to work. I think a number of you are aware of the economist Art Laffer's exploration of the disincentives against people on welfare actually beginning work. At a certain point, the tax disincentive rises to a 100 percent tax rate on dollars they earn on their own, providing absolutely no incentive for people to leave welfare and go into productive work. We need to find ways to end this situation.

Black civil rights organizations need to be brought closer in line with genuine currents of black thinking

Finally—and more crucially—black business and professional people need to launch initiatives of their own. First of all, they must exert more influence within major civil rights organizations. Many of these organizations have taken stances on a number of issues—such as taxation, Proposition 13, forced busing—that appear, if the polls are correct, to be vastly different from the way a majority of black Americans now feel. Somehow those organizations needs to be brought close in line with genuine currents of black thinking. Black business and professional people, especially those who serve on the organizations' boards, need to exert that leadership.

But secondly, I think that the ideas that we have heard in this conference will be wasted if we do not begin to think of some way of packaging them for marketing in the proper arenas. We need to go about converting the type of intellectual energy we have seen today into workable, viable programs that are going to mean progress, real progress, for black Americans. We need an effective vehicle to lobby, research, and support black alternative strategies.


Walter E. Williams: "Reply to Dan Smith"

I would like to point out that I disagree with most of what Dan Smith has said. I think that black people in the United States are primary victims of state intervention. If they can make a lasting contribution to the United States, it would, I believe, be that black people should lead us out of the impending hell of the growing social state—the state intervention—that we have in the United States.

I hope that black people would not go to the Reagan administration—black people as conservatives cooperating with other conservatives—and ask for their own brand of special favors.

It was my impression that free enterprise was an ocean-to-ocean phenomenon

I think that we should lobby for freedom for all Americans. It is rather preposterous to hear many people talk about enterprise zones, free enterprise zones. It was my impression when I was going to high school and reading the history books that free enterprise was not a concept that was restricted to North Philadelphia and Harlem. It was my impression that it was an ocean-to-ocean phenomenon. If we are going to turn the country around, I think that we need to make it an ocean-to-ocean phenomenon and not create special advantages for special people.

We cannot wipe out certain things by putting other things in their place

One final point. It was brought out during the discussion that we cannot wipe out certain things by putting other things in their place. An example given was CETA. Many programs that people talk about wiping out appear to me to be cancers on the society, and normally, when you excise a cancer, you do not worry about what you will replace it with. You just take it out. I think that a lot of programs in the United States represent such cancers on our society that we need not worry about replacing.

This is true not only of CETA, but of a lot of laws that are made in the name of "social good." Look at the historical nature of those laws—for example, the Davis-Bacon Act that requires prevailing wages on federal construction projects. This is a cancer. Much of the stated intention of the Davis-Bacon Act was by Congressman Algood, who said, "That contract over there has cheap colored labor and it's labor of that kind that's in competition with the Americans, white Americans." That kind of cancer obviously should be removed.

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