This is Dominic Pino filling in for Jim Geraghty.
On the menu today: The multi-billion-dollar, unconstitutional racket that is race-based government contracting, and how a Presbyterian family in California grows the fruit used in rituals for the ongoing Jewish holiday of Sukkot.
Trump Administration Takes on Race-Based Contracting
In 2023, the Supreme Court ruled that affirmative action in college admissions is unconstitutional. That was the culmination of a decades-long conservative legal battle to overturn the practice. The argument is best summarized by Chief Justice John Roberts, who wrote in a different case: “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”
Undoing decades of affirmative action in college admissions is hard enough, but it’s also arguably not the most important form of affirmative action. It only really matters for the small fraction of colleges that are highly selective (colleges that admit most students who apply aren’t discriminating much, by definition).
Still widespread is affirmative action in government contracting. A federal judge has ruled that the Supreme Court precedent in the college admissions case “is not limited to just those programs” and would apply to minority-preference contracting rules as well. Undoing those will require executive and legislative action.
On October 3, the Department of Transportation (DOT) published an interim final rule that “removes race- and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution” from contracts that it awards. This follows in the wake of Trump executive orders to prohibit “DEI” in the federal government, but these programs far precede contemporary DEI practices.
Racial preferences in government contracting go back at least to the presidency of Lyndon Johnson, and they were championed by Richard Nixon as part of his campaign to promote “black capitalism.” Like other government efforts to subsidize capitalism, it has ended up promoting a lot of cronyism.
“In 1977, Congress began enshrining minority preferences in law, passing a public works act that required ‘at least’ 10 percent of contract funds to go to minority businesses,” Judge Glock wrote in a 2023 article for City Journal. The practice has grown significantly since then, and the federal government has myriad ways to guide contracts based on race and sex.
As a result, it has become very lucrative to be a minority-owned government contractor. The federal government is the largest purchaser of goods and services in the world. In 2024, the Biden administration was bragging about how it had made $76.2 billion in government contracts with “small disadvantaged businesses.”
These are the same businesses that have been preferred in government contracting for decades, so how are they still considered “disadvantaged”? Glock explains how governments hire firms that specialize in writing “disparity studies” with the purpose of finding that they discriminate against minorities. Once their supposed racism is established, they can go about giving contracts based on race.
In a blog post, David Ditch of the Economic Policy Innovation Center looked at one of the programs that the DOT rule is targeting, the Disadvantaged Business Enterprise (DBE) category for infrastructure projects. DBEs are small businesses owned by women or individuals from racial minorities. In the 1982 highway bill, Congress set a goal of 10 percent of transportation funding going to DBEs. It also gave state and local governments lots of room to define their own DBE goals.
Later rulemaking by the DOT said that DBE goals can be met through “race-neutral” or “race-conscious” means. “Race-neutral” means include any practices that target small businesses in general, some of which will inevitably be DBEs. “Race-conscious” means include targeting just DBEs.
Government entities publish DBE plans that state how they will meet their targets. Ditch finds that it is common for race-conscious means to dominate race-neutral means in meeting DBE goals:
- The Chicago Transit Authority sets a target of 21 percent for DBEs, 15.36 percent by race-conscious means and 5.64 percent by race-neutral means.
- The Los Angeles County Metropolitan Transportation Authority reports DBE attainment of 19.2 percent, 15.8 percent race-conscious and 3.2 percent race-neutral.
- The Southeastern Pennsylvania Transportation Authority targets 19 percent, 13.8 percent race-conscious and 5.2 percent race neutral.
- The Washington Metropolitan Area Transit Authority targets 21 percent, 16 percent race-conscious and 5 percent race-neutral.
- The New York state DOT’s plan for highway projects includes a 14.98 percent DBE target, 14.12 percent race-conscious and 0.86 percent race-neutral.
“Even if DBE plans do not contain explicit race- or identity-based quotas, they clearly point to de facto quotas, as ‘conscious’ efforts have outsized shares of DBE goals,” Ditch concludes.
These efforts ought to be considered unconstitutional, especially in light of the Supreme Court’s affirmative action decision. But these programs will not go away simply by the stroke of the justices’ pens. The Trump administration has the right idea to reduce these programs where it can with executive actions (since they were in large part built through executive actions by previous presidents). Congress, too, should remove these requirements from statutes.
The Manhattan Institute has published model legislation that would wipe out the specific parts of federal contracting laws that authorize racial preferences. As Ditch points out, Congress will have opportunities to act on this issue soon. The DBE program was reauthorized in the 2021 infrastructure bill, which Congress can amend whenever it wants. Congress will also need to pass a new highway bill next year, at which point everything transportation-related will be on the table. Ending racial preferences in contracting should be near the top of the list of priorities.
America’s Etrog Farmer
(First, a hat tip to Phil Klein for turning me on to this topic.) The Jewish holiday of Sukkot began at sunset on Monday and continues until nightfall next Monday. Following Yom Kippur, it is celebrated by building a temporary structure, called a “sukkah,” outside, where Jews eat meals and say prayers. You can read more on the holiday’s history and practices from the Jerusalem Post here.
The important aspect of Sukkot for the purposes of this newsletter is the etrog, a type of citrus fruit that looks like a large, bumpy lemon. Holding an etrog is part of the prayer ritual for this holiday, and this holiday only. The fruit doesn’t taste good and is generally not eaten. So that means once a year, observant American Jews, a tiny fraction of the U.S. population, need to purchase one etrog to practice their religion.
Not only that, the etrog needs to be grown and sold in a specific way to meet Jewish purity laws. Rabbis supervise the farming and certify compliance. The stem of the etrog needs to be intact, and the skin can’t have blemishes.
Most etrogim are imported from Israel or elsewhere. But the one guy in the U.S. who grows them is named Greg Kirkpatrick.
As you can probably tell from his name, he is not Jewish. His father, John, was the one who started the etrog business. The Kirkpatricks are a prominent family of California citrus farmers going back a few generations, and they’re Presbyterians.
A 2011 Tablet story recounts how John first learned of the etrog in 1980 when an Orthodox Jewish man from Brooklyn named Yisroel Weisberger contacted him about growing the special fruit. “I found out that although I’m an expert citrus grower, I was not an expert etrog grower,” John said. “It’s easier to grow 2,000 acres of oranges or lemons than to grow one acre of etrogs.”
He had to learn the religious terminology associated with the fruit, such as the “pitom” or stem. After a few tough years, he mastered the crop in the late ’80s. David Wiseman, an etrog distributor quoted in the Tablet article, said he was a pleasure to work with and knew the laws well; “If anything, he’s more stringent than he needs to be.”
John died in 2023 at the age of 92, and his son Greg now runs the farm. He has sought to uphold his father’s legacy and continues to work with distributors and rabbis to follow Jewish law.
The Los Angeles Times reported in 2023 that Greg’s farm, Lindcove Ranch, has found its market niche in growing etrogim. Larger-scale operations specialize in growing more popular citrus fruits, and it’s hard for a smaller farm to compete with them. But there’s plenty of room for Lindcove Ranch to specialize in growing the finicky etrog using the knowledge the Kirkpatrick family has built up over decades.
Markets help people find ways to help each other. American Jews had a need, and the Kirkpatrick family had expertise in meeting it. They don’t need to believe the same faith to make each other better off.
ADDENDUM: This is my last piece as the economics editor of National Review. I will be starting a new job as an editorial writer for the Washington Post in November. You may have heard that the owner over there wants to move the paper in a more free-market direction. They wanted me to help with that, and I’m excited to be able to help shape the new opinion section. Washington needs more free-market arguments. I’m not going away completely, as I will be remaining on the NR masthead as a contributing editor and continuing to write the Stat feature for the magazine each month. I’m very grateful to NR. I have dreamed about working here since high school, and I applied for the summer internship twice before getting it on the third try. It’s an incredible place with amazing colleagues, many of whom have become friends. And it sounds cheesy to say, but it’s true: NR’s readers are fantastic. Whenever I have interacted with readers, I have always been impressed by their dedication to NR and their genuine interest in the future of conservatism and the country. I will miss working here, even as I look forward to my new job. In the 1955 mission statement of NR, Buckley wrote, “The competitive price system is indispensable to liberty and material progress.” NR still believes that, I still believe that, and getting more people to see the truth in that statement will continue to be my mission.