The Mises Institute monthly, free with membership

Sort archived Free Market articles by: Title | Author | Article Date | Subject

March 1996
Volume 14, Number 3

Rhymes With "Howard"
Carl F. Horowitz

The joy erupting in Howard University's student union was palpably motivated; O.J. Simpson would walk. "As the verdict was read, the place erupted into screaming and jumping. You couldn't hear," one observer put it. To the students, a falsely accused black man was able to get justice--in racist America, no less.

The celebration at the black school had a special irony, since, for all intents and purposes, it is a ward of supposedly racist taxpayers. Indeed, it is fair to say that if Howard weren't so insulated from market exigencies, it just wouldn't be...well, it just wouldn't be Howard.

You would think that under a Republican-controlled Congress, the giveaway would be facing its last rites. For a while, it seemed that way. The House Budget Committee, chaired by John Kasich of Ohio, recommended zeroing out the Howard subsidy over seven years. But Newt Gingrich intervened to restore funding, coincidentally or not, on the same day that Standard &Poor's (following the example of Moody's) downgraded Howard's bonds.

Jack Kemp, a member of Howard's board who defended black cheering at the O.J. verdict, had arranged a meeting in June with Gingrich, Bob Dole, and incoming Howard President H. Patrick Swygert. Shortly thereafter, the subsidy was magically preserved.

Howard University was established through federal charter shortly after the Civil War to educate former slaves. The irony is that Howard only became a financial sinkhole after the fall of restrictive laws that kept blacks out of some mainstream colleges and universities.

In 1984 Congress passed and President Reagan signed the Howard University Endowment Act, singling out that institution for special financial support. Ever since, it's been the gift that keeps on giving. The U.S. Department of Education's outlay to Howard in fiscal year 1994 was $204 million, good for 52% of its expenditures.

The federal dole doesn't end there. Howard is one of more than 100 American campuses that the Education Department has designated as a Historically Black College and University. HBCUs, which must have been established before 1964, rolled up a $129 million tab in fiscal 1994 through their Capital Financing Program.

But it gets worse, for more than $796 million went to student and institutional programs benefiting blacks or the more euphemistic "underrepresented," "disadvantaged," and "needy." The bulk of this funding went to planning and development grants; the "TRIO" program, enabling disadvantaged students to enter and complete college and graduate school; minority "program development"; and various scholarships and fellowships. Smaller portions went for activities such as "endowment challenge grants" and "legal training for the disadvantaged."

It is fair to say that blacks got first claim on the $1.13 billion fiscal 1994 total tab. True, a sizable portion likely went to Hispanics and other racial/ethnic groups. True as well, "white" schools made out well from all of this, since black students are free to attend wherever they wish. But on the down side of things, this figure does not include the cost of bailing out defaulted federally guaranteed student loans at HBCUs.

In August 1993, the General Accounting Office report revealed that among loans scheduled to begin repayment in each of fiscal years 1987 through 1990, the overall default rate at these schools exceeded 20%. And needless to say, the figure does not include racially-targeted higher-education spending by state and local governments, or by tax-exempt nonprofit groups such as the United Negro College Fund.

But beyond the arcane details of spending levels is a more basic consideration: why is it necessary to bribe black colleges and universities into maintaining their racial composition? Defenders of such aid say it expands opportunity. But in a nation without legal barriers to advancement, such an argument makes no sense.

If higher education has been generally harmed through insulation from market competition, it's all the more true for black colleges and universities. As a private institution, Howard can make a case for retaining its racial identity. But Howard, like Fisk, Florida A&M, Grambling, North Carolina A&T, and other black schools, has no right to extract money from the taxpayers for its efforts.

Meanwhile, states thinking about consolidating or closing all-black schools might be chastened by the Mississippi experience. Under fire from civil-rights activists and the U.S. Supreme Court to achieve a higher black enrollment at their "historically white" colleges and universities, state officials proposed merging Mississippi Valley State University (black) and Delta State University (mainly white). On remand, a federal district court did not accept this proposal as a sufficient remedy. The proposal is part of the Ayers case now before a circuit court of appeals.

That Howard University's law school churns out the Johnnie Cochrans of the future is a logical outcome of racial-identity politics. More troubling is the lack of courage among lawmakers and other officials to cancel subsidies targeted to Howard.

Supporters apparently believe either that such subsidies are fair, or (more timidly) aren't, but buy peace. But in fact these subsidies neither are fair nor buy peace. If anything, the key legacy of this giveaway appears to be the hastening of a larger racial conflict afflicting this country. We found out in October just how much it has affected the jury system.

--------------------------------------------

Carl F. Horowitz is the Washington correspondent for Investor's Business Daily

Back

Image of Mises Coat of Arms Ludwig von Mises Institute
518 West Magnolia Avenue
Auburn, Alabama 36832-4528

334.321.2100 Phone
334.321.2119 Fax
contact@mises.org
AOL-IM: MainMises

Contact us button
Mises.org Menu