In a Wall Street Journal oped today, Naomi Schaefer Riley discusses federal policies toward American Indians:
There are almost no private businesses or entrepreneurs on Indian reservations because there are no property rights. Reservation land is held in trust by the federal government and most is also owned communally by the tribe. It’s almost impossible for tribe members to get a mortgage, let alone borrow against their property to start a business. The Bureau of Indian Affairs regulates just about every aspect of commerce on reservations.
Instead of giving Indians more control over their own land—allowing them to develop natural resources or use land as collateral to start businesses—the federal government has offered them what you might call a loophole economy. Washington carves out a sector of the economy, giving tribes a regulatory or tax advantage over non-Indians. But within a few years the government takes it away, in many cases leaving Indian tribes as impoverished and more disheartened than they were before.
I explored the same themes in a 2012 essay at DownsizingGovernment. My essay traces the history of Indian policies back to our nation’s founding and concludes:
American Indians and Alaskan Natives have a unique history and a special relationship with the federal government. However, subsidies and regulatory preferences are not a good way to create broad-based and durable economic growth for these peoples. Subsidies are also inconsistent with the movement toward Indian self-determination. A better way to generate a lasting rise in Indian prosperity is to make institutional reforms to property rights and tribal governance on reservations.
The problem is that Washington is a massive screw-up these days in so many ways. There is so much to repeal and reform, but members of Congress don’t seem to have the time, patience, or incentive to fix the failures that they have created, including the failures of Indian policies.