TRB from Washington

by Richard Strout | September 17, 1966

Ghetto and Garrison

To understand the Negro city problem, you have to realize how most big American cities are now developing. There is the downtown business-amusement area, generally close to the factory area. This is surrounded by a noose of slums increasingly Negro ghettoes. And beyond that are the white garrison suburbs; segregated, of course.

To get downtown, the white commuters have to go through, or over, or under, the ghetto which, of course, they don't see. Factories are tending to decentralize into the suburbs, which means that Negroes have to travel farther and farther outward to get to lowskilled jobs; Negro women meanwhile travel to the suburbs to scrub floors. (You see these two queer tides coming and going, crossing each other, daily.)

This creates a "commuter crisis," described by Harvard economist John F. Kain in the current issue of Challenge. City officials meet the jam by constructing heavily subsidized peak hour highway capacity, or heavily subsidized transit systems. As the ghetto noose expands inside, whites have to commute farther to get into the central city, and Negroes have to travel farther to jobs in outlying areas. Public transit in the ghetto is normally inadequate. (The McCone inquiry cited it as a prime reason for unemployment in Watts.) The trip from ghetto to suburban job is normally difficult, costly, time-wasting.

Mr. Kain has a nice statistical table showing population changes, 1950-60, in 11 big cities. Into the "central city" of Chicago, for example, have poured 320,000 Negroes; out of it have emigrated 399,000 whites. The "suburban ring" of Chicago, meanwhile, has added 1,076,000 whites; only 34,000 Negroes. This situation erupts in riots, approaching revolution. The garrison suburbs buy guns and blame the rioters. Los Angeles Mayor Yorty, for example, protested to the Ribicoff Senate committee against "politicians running around and making promises which they cannot keep," to the ghetto dwellers. "It's created an intolerable situation for the police," he complained. Ronald Reagan agrees. He blames Watts on social workers' promises. Latest unemployment figures show white unemployment down (3.4 percent); Negro unemployment up (8.2 percent). The gap widens. Unemployment for teen-age Negroes is 27 percent. They're the ones who throw rocks at motorists. (You would, too, if you lived between street corner and jail.) So now we come to the Senate opposition to the housing section of the civil rights bill. It is led by Republican Everett Dirksen and the Southern segregationists. The bill has been diluted, but it would still outlaw segregation in about 40 percent of the nation's living quarters. If you owned an apartment house with more than four apartments, you could not forbid a Negro to rent a suite. If you built a house for sale you could not turn down a legitimate

Negro buyer. In short, it would breach the ghetto by scattering Negroes out through the garrison suburbs of American communities. Revolutionary? Yes, in essence; we think Dirksen is right in that. It gives us a choice: surrender the garrison, or more riots. Which thought do we hate most? 

Insurance Squeeze

Life insurance is a $30-billion-a-year industry which recruits, exploits and ejects 95 percent of its 110,000 "agents" each year. We hadn't realized how neat a trick it all is till we read Pay Now, Die Later, James Gollin, $5.95, Random House. Gollin writes coolly, as an insider on America's richest, strangest, private enterprise. The recruitment thing is called the American Agency System. The huge companies don't actually employ these salesman innocents. They are hooked by branch office managers, who lure them in by glowing advertising; "Sales, Prudential Insurance Co. Immediate salary and training.

$6,000-$9,000," In legal terms, they are independent contractors. Once in, the sheep loses its wool. They are "agents" now, they are told, and should go out to sell insurance to friends, relatives, acquaintances. Every contact they have is squeezed out of them. Discouraged, they realize soon that the "salary" is really a deduction in advance of future possible commissions. They use up their easy-mark contacts. Ninety percent of the agents leave business within 90 days.

This is a queer system of white-collar exploitation! With this kind of salesmen it's no wonder that one out of every four policies lapses within 13 months; an estimated out-of-pocket loss of $2 billion annually. Yet the industry is so gigantic that it invests $150 million every working day ($34 billion in 1964). Total assets, over $150 billion. It's just about the biggest money power in the nation. One guess is that 1,000 men control the investment of the 200 top companies. High time, we think, that some congressional committee took a look at it. 

President's Club

There's nothing that sends a Republican politician faster into a Democrat's arms than proposing to reform campaign contributions. After election, both hastily drop the subject. For years reformers have suggested tax exemption for small contributions to either party and a realistic ban on big contributions; most politicians resist.

Now the Democrats have come up with a real gusher, the President's Club. You are eligible if you contribute $1,000 a year. You get a fancy Diners' Club type card, and get to shake Mr. Johnson's hand. Best of all is the opportunity to say casually, "Didn't think old Lyndon was looking so well last week when I dropped in," That's worth a grand, to anybody. Republicans angrily charge that the club promotes fat contracts in the big city. Maybe so; they haven't proved it.

Stop Press

 "Giving business the 7 percent investment tax subsidy is like paying a child to eat candy." TRB, August 13.

"I recommend that the Congress make the 7 percent investment credit inoperative." President Johnson, Sept. 8.

This article originally ran in the September 17, 1966 issue of the magazine.

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