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::Excuse Me, Can You Spare Some Change?:: By Norm Bond "You see Washington has been telling us to wait for decades, even as the problems have grown worse.” I watched with great interest President Obama’s first State of the Union Address. It was a well delivered speech and had many good points for America as a whole. He hit on many areas including financial reform, encouraging American innovation, exporting more American goods, refinancing for homeowners, education and national security. But Mr. Obama was dead on when he said “it begins with our economy.”
Oddly our first African American president delivered his address without once specifically referring to or using the words “Black” “African American” or even “poor”. When we heard about the renewed efforts of the Civil Rights Division, specific groups were mentioned. They included “women” “gays” and fixing our “broken immigration.” The group that forced the creation of the Civil Rights Bill – Black people was omitted. This is further vexing because 2010 is the year of the decennial census (also not mentioned). The U.S. Commerce Department received an extra $3 billion in its budget because 2010 is a census year. President Obama stated the number one issue going forward is “our economy.” Well according to most economists the segment most negatively impacted by the economy remains African Americans. In December 2007, we started the recession – in a recession. African Americans pre-recession unemployment rate was 8.6% while whites were at 4.8% according to population data from the U.S. Census Bureau. In December 2009, the Congressional Black Caucus (CBC) boycotted a financial reform vote, demanding that more be done to support “suffering Black communities being hardest hit by the recession.” Just this month the Boston based research group United for A Fair Economy (UFE) released its seventh annual Martin Luther King Jr. Day report. This year it is entitled “State of the Dream 2010: Drained –Jobless and Foreclosed in Communities of Color.” According to Brian Miller, Executive Director of UFE, “Our report contains ample evidence to conclude that without targeted policies, such as those proposed by the CBC, we will never reduce the wide gaps of income and wealth between races.” The report can be downloaded at www.FairEconomy.org/dream. This is why it is insidious or ludicrous – to omit the African American segment specifically from such a wonderful address as was delivered by the president. Mr. Obama is fond of stating “a rising tide lifts all boats.” However, many top economists use a different analogy. They say that fixing the economy is more akin to dealing with a “potential flu epidemic.” Says Mike Prokosch, a UFE Board Member, “We give vaccines to the most vulnerable populations first. Economic policies should follow the same approach.” Now let’s get to these big banks - please. Mr. Obama said, “I’m not interested in punishing banks, I’m interested in protecting our economy.” Well these same banks WERE interested in punishing African Americans. Gary A. Dymski is an economist and the author of “The Political Economy of the Subprime Meltdown.” In this research paper he states, “Subprime lending originated when lenders created predatory mortgages – that is, mortgages with excessively high fees, penalties, and interest rates – and began to market them to higher-risk households who had restricted access to other sources of credit, especially low-cost credit. Lenders marketing of these loans focused on redlined areas, and on households that had traditionally been denied access to credit.” Sixty percent of the African Americans who received sub-prime loans actually qualified for regular loans. However, they were steered to these sub-prime products by sellers who received higher commissions, banks who received higher fees and companies who made greater profits by selling them a product that was more risky. African Americans have experienced the largest loss of wealth in modern history with many falling out of the middle class as a direct result of being targeted victims of Americas profit driven bankers who were then bailed out by the government. These banks replaced racial exclusion with racial exploitation. The NAACP has filed a class-action lawsuit charging systematic racial discrimination by more than a dozen banks, including: Accredited Home Lenders, Inc., Ameriquest Mortgage Co., Bear Sterns Residential Mortgage Corp. d/b/a Encore Credit, Chase Bank USA, Citimortgage, First Franklin Financial Corp., First Tennessee Bank d/b/a First Horizon National Corp., Fremont Investment & Loan, GMAC Mortgage Group, LLC, GMAC ResCap, Long Beach Mortgage and SunTrust Mortgage. In addition, these banks and their intermediaries created and financed the payday loan market. Unheard of in 1990, this industry has grown very fast. Now some 22,000 store locations offer payday loans. This is the practice of advancing workers a portion of their money they stand to earn from their paychecks. In the 37 states that allow this practice, there is a market volume of $40 billion. The average fee for a $100 check is $18 and in 2001 the average store earned $173,310 in fees. Nearly a third of the payday customers (30%) earn less than $25,000 per year, and 52% earn $25-50,000 per year. African Americans are over-represented. Reverend Jesse Jackson recently told the Black Press of America (NNPA) that “the payday lender is the back door of the bank.” But what about jobs? The president admits that even with the proposed jobs bill and other measures he discussed “these steps won’t make up for the seven million jobs that we’ve lost over the last two years.” In fact, most of the job-creation projects in the American Recovery and Reinvestment Act (ARRA) – also know as “the stimulus” is not stimulating the African American community. These investments in transportation infrastructure, “green” building retrofits, construction, and education are important for America – but they are bypassing those most impacted by the Great Recession. And there is very little dialogue and even fewer solutions being put on the table to correct these imbalances. Even African American entrepreneurs are being short-changed by the government. On June 15, the SBA, using money from the $787 billion American Recovery and Reinvestment Act, launched the ARC program, America's Recovery Capital, giving banks and credit unions 100 percent guarantees so they're taking no risk when they make loans of up to $35,000 to previously successful, currently struggling small businesses to help them ride out the recession. The Obama Administration does not report the racial breakdown of who's benefiting from these loans at Recovery.gov, but data obtained by New America Media from the SBA found that of the 4,497 ARC loans where the race of the borrower was reported, 4,104 (over 91 percent) went to white-owned firms, 140, (3 percent) went to Hispanic-owned businesses, and 151 (3 percent) went to Asian- or Pacific Islander-owned businesses. Only 65, (1.5 percent) went to black-owned firms. In December 2009, President Obama said it would be wrong for him to narrowly focus on the troubles Blacks face in the recession, rejecting criticism from the Congressional Black Caucus that the government was ignoring the economic plight of minorities. “I will tell you that I think the most important thing I can do for the African-American community is the same thing I can do for the American community, period, and that is get the economy going again and get people hiring again,” the president told Richard Wolf of USA TODAY and Justin Hyde of the Detroit Free Press in an exclusive joint interview. Some predict it will take six to ten years for the jobs to catch-up. Can African Americans wait that long? Are there any bright spots? Any reasons to hope? Well, yes. The hope is that we realize that now is the time for African Americans to turn to ourselves. Now is the time to work together. Now is the time to build relationships throughout the African Diaspora. Now is the time to utilize technology in an empowering way. Now is the time to explore relationships with other ethnic groups that are mutually beneficial. Now is the time to support and build our own businesses either brick-and-mortar or online. Now is the time for those in our community with business knowledge, education, and technical skills in the emerging “green economy” industries of solar and clean energy to make themselves known. Now is the time to come up with creative financing and venture capital strategies to fund our own projects. Now is the time to tap into our $980 billion plus in consumer spending and demand equitable and reciprocal relationships from the companies with whom we spend our money. Now is the time to apply the creative genius that has led us to this historic moment. We’re going to have to figure out how to create, develop and sustain our own economic solutions. If we want a better future for our children, an improved quality of life in our communities, and to close the income and wealth gap; we must develop these new skills and strategies. We’re going to have to think differently. We can still keep the pressure on the government and try to “get in where we fit in” – but we can’t sit this one out. Look no further than Katrina and Haiti to see real world examples of the consequences of having an inadequate infrastructure. The devastation continues. As the president said, “Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations -- they're not standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure.” Black America needs to model these nations and get-off the sidelines. We can’t afford to wait any longer either. Norm Bond is the National President of the National Alliance of Market Developers, Inc. (NAMD) founded in 1953. He can be reached at www.namdntl.org or www.normbond.com |
e: info@normbond.com
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