I have a slightly different take from what others are saying about the racist chant by the Sigma Alpha Epsilon boys at the University of Oklahoma. I think that Jamelle Bouie is correct, Don’t Expel Members of Sigma Alpha Epsilon for Racism. The subtitle is, “Educate them. Show them what their words mean.” Bouie went over the SAE’s history of racism and then noted that it wasn’t specific to them. He quoted Nolan Cabrera, “This behavior is endemic throughout the country.” Bouie also quoted research that showed that white millennials are no less prejudiced than their parents are. That, I think, is the critical point.

I don’t think these SAE kids are outliers; they just got caught. That doesn’t mean they shouldn’t be punished. And I’m not sympathetic towards them. When I was in college, fraternities were just coming back to my school. And the kind of people who gravitated toward fraternities were exactly the kind of people who should not have been in fraternities. Fraternities work as a way of closing off extended social connections. They don’t just separate by class and race; they also separate by personality types. There weren’t many physics and math majors running to join fraternities. Colleges should be about breaking down barriers, not setting up even more.

So it doesn’t surprise me at all that these frat boys left to themselves would develop a culture where they would sing a song about lynching black students. I’m sure they saw it as funny: they were singing something racist but in an ironic way because, of course, they aren’t racist. Bouie pointed out that this was common, “The ‘joke’ framing is important: it allows participants to use racial language or express certain attitudes without acknowledging any personal prejudice.” But a better way to deal with this would be to force everyone in the fraternity to take two years of African American studies. And, of course, the fraternity itself has to go. I think that was totally appropriate — but then, I generally think they should all go.

The big problem that I see if the problem that I always see in these cases. We have a racist society. When a rancher wants to tell us another thing about “the negro” or some kids sing about hanging African Americans from trees, the establishment is outraged. “How can there still be such racism in modern America?!” Meanwhile, these same outraged media sources allowed Obama’s birth certificate to be a thing in the mainstream media for two years. But that only barely scratches the surface of it.

What hurts us most is the idea that using the n-word is the real problem. And look: I get it. If people are willing to actually say things like this, it is a very bad sign. But the focus on it seems to be a way of defining the problem away. As long as we aren’t being explicitly racist, there’s no problem! Right? Right?! Well, wrong. What hurts us is actual inequality. African Americans make a lot less than white Americans. And we are fine with this. But the only way we can be fine with this is if we actually think that African Americans are stupider or lazier or generally less than white Americans. Do we actually believe this? I’ll bet there are a lot more people who believe that than we want to believe.

But that’s the philosophical basis of racial economic inequality not being a major political issue. Fox News is quite explicit about their belief that racism is a thing of the past. But CNN and MSNBC also live with pretty much that same worldview. And that worldview is simply racist. So it is true that what the SAE students did was racist. It’s fine to point that out. But it should be used to highlight the more important racism in our society, not to blind us of it.

Update (12 March 2015 9:09 am)

It’s interesting that I can spend so much time thinking about media commentators who are outraged about this stuff and gloss over the systemic problems, yet there are those who are determined to apologize for this stuff. Think Progress this morning reported, No Apology From Morning Joe Over Blaming Waka Flocka Flame for Racist Frat Chant. “Liberal” Mika Brzezinski said, “We’re all trying our best here to figure out our way through this and yesterday the conversation got real and I think some people conflated it with other things, but there’s no moral equivalency between something like rap lyrics and what happened on that bus.” No, they didn’t get real. They were claiming that these kids were chanting about lynching while using the n-word was due to having heard said word in rap lyrics. There really is no difference between that and the old conservative complaint, “Why can black people use that word and I can’t?!” The supposedly liberal MSNBC has this kind of garbage on three hours every day. When Fox News hires Rachel Maddow to do its morning show, then I’ll admit that Fox News and MSNBC are equivalent.

Last Friday, Ben Casselman was savage, A Wall Street Journal Op-Ed Gets It Very, Very Wrong on Seasonal Adjustment. It is in reference to an article Daniel Quinn Mills wrote, Seasonally Adjusted Jobs Numbers Offer Cold Comfort. The “cold” in the title seems to be a sort of joke because Mills seems to think that seasonal adjustments to the jobs report is mostly about the weather. Mills wants you know, “The US economy lost more than 2.7 million jobs between the middle of December and the middle of January.” If he weren’t allowed to write this kind of thing in The Wall Street Journal, I’m sure that he would be shouting it in Washington Square Park.

As you no doubt know, that loss of 2.7 million jobs in January is what happens every year. It is the economy winding down from the Christmas rush. It takes a Harvard Business School professor to demonstrated this astounding level of ignorance. As Casselman discussed in some length, the point of seasonal adjustments is to allow us to know what is happening with the economy. We don’t need the Bureau of Labor Statistics to tell us that come January, all those temporary hires in November will be gone. What’s more, Mills didn’t write his little OpEd in December complaining that the jobs report didn’t reflect the millions of new hires.

And that’s the point. Mills wouldn’t have written this article — and The Wall Street Journal wouldn’t have published this article — if a Republican were in the White House. We saw the same thing with the unemployment rate when Obama came into office. The official unemployment rate was 8.2% in February 2009. But suddenly, conservatives everywhere were screaming about how the “true” unemployment rate was far higher: 15%! Well, in a sense, they were right. The standard number is U-3 and it doesn’t reflect the true level of suffering in the economy. The number they were pushing was U-6, which includes discouraged and involuntary part-time workers.

But the issue is consistency. (To be fair, I’ve seen liberals do the same thing, but it isn’t nearly as common.) While Bush was in office, the U-3 number was just fine. But once Obama was in office, the U-6 number was suddenly used. Similarly, the conservatives who couldn’t care less about the budget deficit found God once Obama was in office. Or to take the most extreme case, I’ve heard conservatives claim that they don’t, in fact, know that Obama was born in the United States. Fair enough. Neither do I. But why is it that the issue only came up when Obama was president? Admittedly, that’s not because he’s a Democrat; it’s because he’s an African American and a Democrat.

The Wall Street Journal editorial page is in the business of apologetics. It will turn on a dime when the party in power changes. It is embarrassing. And even more, it is greatly concerning that someone from Harvard Business School would write an article that shows such complete lack of understanding of economic data. Nothing will change, however. It is very likely that Mills is so insulated that he won’t ever hear about how foolish he looks. This is what has allowed the right wing of this country to lose touch with reality. Everything is definitional: if a Republican does it, it’s good; if a Democrat does it, it’s bad.

On Saturday, I published, Jobs Report Always Brings Calls for Fed Tightening. It was about this whole class of people who always want the Federal Reserve to raise interest rates because (they claim) inflation is going to rise. There is generally a trade-off in Fed policy: to lower inflation, you must slow the economy. Thus, calls for raising rates are also calls for ending jobs. But to the power elite, it is axiomatic that a slight reduction in the wealth of the rich is worse than thousands of poor people losing their jobs.

This is all based on the concept of the non-accelerating inflation rate of unemployment or NAIRU. The basic idea behind the NAIRU is fine. The truth is that there is a natural rate of unemployment because people do choose to be unemployed for periods of time. If unemployment gets below this rate and businesses are so desperate for workers that they raise their pay faster than the rate of productivity, it causes inflation. It’s interesting that so many powerful people are obsessed with this happening, given that its been many decades since anything like it happened. The point is that economic policy probably should not shoot for a zero unemployment rate.

But when it comes to specifics, the NAIRU is pretty much a myth. I’ve been amazed the last year to hear people claim authoritatively that that the NAIRU is between 5.0% and 5.5%. Were they not around in the late 1990s when Greenspan allowed unemployment to get below 4% without causing any inflation? And try as I may, I could not find that there was any change in the economy that might make the NAIRU larger today than it was then. It just seems that this class of people want the NAIRU to be high so the Fed is forced to raise interest rates and protect their piles of cash.

Saturday Morning, Paul Krugman posted an amazing collection of data, Remembrance of NAIRUs Past. It contains the following list of NAIRU estimates from the 1990s leading up to the Greenspan boom when (Again!) unemployment went below 4% and inflation did not take off:

What is fascinating here is that the estimates of the NAIRU were roughly the same then as they are now. Yes, they are slightly higher. But there is no recognition that maybe the way that the NAIRU is calculated is all wrong. Instead, it is always this very conservative number designed as though the greatest good is low inflation — clearly trumping low unemployment. And I think this is just unconscionable.

No amount of data matter. What matters is what the rich want. Actual lost jobs can’t compete against theoretical future inflation. This is yet another indication that we do not live in a democracy. Democracies are much more than elections. As you can see in almost every dictatorship in the world: people vote. It doesn’t even matter that the elections are nominally free when the institutions of democracy are controlled by and for the benefit of the power elite.

Most libertarians complain about the Federal Reserve as an unaccountable institution. I am inclined to agree with them. But the problem is the opposite of what they think. Libertarians generally think that the Federal Reserve is “devaluing” our money. But it is the other way: they are doing everything they can to protect the wealth of the rich. The only constraint is that they can’t do that job so well that the economy crumbles. If all the serfs die, what will happen to the rich? But clearly, the Federal Reserve and many other institutions of our democracy are only indirectly interested in the people.

See Also

The Myth of the NAIRU and Its Purpose
How the Fed Enforces the Status Quo
Economic Scale and Income Inequality