Too Rich to be Poor Creating Sustainable, Long Term Economic Wealth in the Black Community
Not long ago, President Trump reportedly referred to African nations as “s-hole” countries. Not even the most gifted public relations pundit could put a positive spin on being compared to a pool of human feces. Clearly, the president’s disdain for Black countries and Black people, in general, has long since been stripped of any disguise.
The impressions, which are apparently shared among many of his supporters, is no surprise given our nation’s long history of propagandized imagery depicting the African continent as nothing but diseased, corrupt, poverty-stricken, violent and insignificant. This narrative only serves to reinforce the biases and prejudices of those who find little value in Black people.
This article is not a meant to deny that most nations in Africa struggle economically; yet, this fact does not render them worthless? Most countries, including the U.S., have their struggles. Information and pictures have tremendous power – particularly when presented in such a one-sided approach. Propaganda, by definition, means philosophical assertions, ideology, rhetoricand imagery meant to harm a people, a culture or a nation. It has long since been the policy of the U.S. to exemplify destructive reflections of Black people no matter where we exist.
As with any message, there must be acounter narrative. Deception and manipulation arises when only one side of the story is presented. The truth is that nearly every country on the continent has thriving cities characterized by robust, burgeoning commerce and industry. It stands as a testament to the kind of economic activity needed to generate long term prosperity. Their richness in natural resources cannot be understated. For instance, The Democratic Republic of Congo has the largest deposit of cobalt in the world. The metal is used in numerous everyday products including the lithium-ion batteries needed to power cell phones and electric cars. Whimsically, it is a real-world version of Wakanda from the fictionalized feature film The Black Panther.
Any nation, the U.S. included with all our wealth, can be made to look like an “s-hole” country. Last year, representatives from the United Nations were shocked at the impoverished conditions in American southern state like Alabama – saying that they had never seen such conditions in the first world. It all depends on who’s telling the story and the angle from which the story is told.
With an overall GDP (Gross Domestic Product) nearing $4 trillion, the continent is primed to become the next frontier for development, expansion, growthand investment. Modernization projects are occurring all over Africa and what has traditionally been called the third world is beginning to catch up.
So what does that mean for Black people in the U.S.? Like here in America, any instance of wealth and success among Black people are routinely discarded in favor of representations of hardship, distressand indigence.
But what is the other side of the story for African Americans?
According to a recent report by Nielsen, black buying power will soon eclipse $1.5 trillion. This reality has prompted African American leaders to strategize about how best to leverage our dollars in an effort to build long-term sustainable growth. Central to the notion of building our fortunes is increasedhome ownership, business development and community investment.
The idea of building wealth in the Black community is not new. Efforts to extract ourselves from the grips of the dominant culture have existed since we were set free from bondage more than 150 years ago. As it turns out, our “separate but equal” truth, validated by the Supreme Court decision Plessy V Ferguson, in 1896 made it possible to build viable communities all around America. A considerable amount of our dollars were spent withBlack owned enterprises and contributed to a greater degree of wealth for Black Americans. Today, according to the Northwest University Graduate School of Management, only three percent of our dollars are spent with Black businesses. This has a direct correlation to our impoverished conditions today.
Over the pasthalf century, we have spent considerable time seeking inclusion, integration and diversity; some would argue, to our own detriment. As we became more intertwined within American society, so did our money.
When MaulanaKerenga, then professor and chair of Black studies at California State University, established Kwanzaa in 1966, he purposefully included the concept of Ujamaa (oo-JAH-ma) or collective economics to encourage African Americans to buy and spend with one another.
If the 2016 election has accomplished anything, it has made it crystal clear that there will be no help from the federal governmentin focusing on Black economic issues. The plain truth is we really don’t need government intervention if we adhered to the basic prescription that Karenga and others stipulated more than 50 years ago.
This has lead to the creation of a new movement called Black Wealth 2020 that has linked with our civil rights, civic and religious organizations to positively impact the economic outcomes of the African American community in the very near future. The group has three primary goals: 1. Increasehome ownership among African Americans; 2. Strengthen black-owned businesses; 3. Increase deposits in black banks. These represent the essential foundations of economic growth. The long term aim is to draw the community’s attention to the importance of wealth building.
Further, the organization is seeking to partner with established African American groups like the 224-year-old AME (African Methodist Episcopal) church. Founded in 1794, the AME church boasts a membership of some 3.5 million membersworld-wide. Specifically, the group wants to increase Black homeownership by 50 percent which would represent
approximately two million new homeowners. It seeks to grow the number ofBlack owned businesses from about 3.6 million to 5 million and raise gross receipts per business from $72,000 to $150,000. An app containing a listing of Black owned companies will be designed to help African American consumers target businesses.
The cornerstones of this newmovement, established two years ago, are unity, accountability and sustainability. It includes a variety of organizations from the Black Chamber of Commerce, the National Bankers Association, National Association of Black-Owned Broadcasters, The National Urban League, the NAACP and African American political leaders like Rep. Maxine Waters (D-CA). Others key members include Home Free USA, Zenviba Academy of Arts and Sciences, Collective Empowerment Group, National Association of Real Estate Brokers, Enlightened Inc., and Delta Sigma Theta Sorority, Inc.; among numerous others.
In an effort to learn from the lessons of the past, the organization insists that a broader approach is required. For example, leaders insist that the movement cannot depend upon a single individual or organization. Therefore, a tragedy like a death or assassination won’t derail the effort.
Critical to the success of this new endeavor will be the 38 Black banks and financial institutions around the country. They will be critical to stabilizing the financial health of Black communities. The ability of Black entrepreneurs to access the needed capital to create and grow a business is the single greatest challenge facing our business community. Simply redirecting 10 percent of our dollars could potentially create as many as one million jobs in our communities.
The financial entities will serve as the vehicles through which we funnel our wealth making in possible to borrow money to start a business, invest in property, buy stock, mutual funds and plan for a successful retirement. It will present the opportunity for greater controlof where our money goes and how it is being used. It will allow African Americans to create economic opportunities for ourselves and level the income gap between Black Americans which stands at $35,000 compared to a national average of $53,000 respectively.
The movement will also bolster the position of our black banks as they continue to struggle to recover from the devastating effects of the 2009 recession.
However, as we proceed, need to more closely define terms such as “buying power.” We should be careful, as the numbers may be a bit misleading. Many may confuse the concept of buying power with that of wealth building. There is a huge difference. Buying power is simply the total of what we purchase – wealth is what we save, invest and keep. So the $1.5 trillion dollars annually is what we give to others with virtually nothing in return.
Our greatest challenge is that most of us Black folk ascribe to a poverty creation way of life. In other words, we spend more than we make. It does not matter how much we earn. Many of us struggle even when we earn a good, livable salary. The conspicuous consumption of material items finds us spending on over-priced, depreciating,low value items like clothes, jewelry and expensive cars. We borrow needlessly, paying high interest rates and fees. Investing for long term wealth is not a priority. This has led to our overall lack of group wealth.
Conversely, in order to begin building realwealth we must learn to spend less than we make without regard to income. Use the Black banks and financial institutions to invest what is leftover. This will result in our earning interest, capital gains and dividends. We should be investing in appreciating assets like stock, bonds, property and mutual funds. Our habits must change to invest first and spend last.
So let’s not get lost with terms like buying power. It is merely a marketing phrase that refers to our ability to buy goods and services that companies want to sell us. There is no real relationship to how much money we actually have. Wealth refers to appreciating assets that are transferred from one generation to another. Therefore, Black Americans really have very little economic power in a capitalist system without the building of wealth over time; we just have the power to buy pre-determined items that others place in the market.
In fact, many argue that the term, “buying power” is nothing but a tool used to provide asmoke screen for the intentional and structural economic system designed to insure inequality and strategically keep Black people as poor as possible.
Here is the problem as we experience it. Financial institutions will provide loans for black people to buy, let’s say an automobile for $50,000 but will refuse that same consumer a loan to start a business, invest in property or engage in investments. Therefore, our “power” extends only as far as the purpose the bank deems worthy of a loan. That $50,000 is not money in my pocket for me to use as I see fit. If it were, that might align more closely with the notion of wealth.
As our population rapidly approaches 50 million in the U.S., it is crucial that we begin to build and sustain wealth or forever be left out of the so-called American dream. It becomes all the more important as others have long since demonstrated a lack of respect for the Black dollar, zero support forBlack owned businesses and Black spending power.
The Black Wealth 2020 Movement is a promising sign that takes a new approachon a familiar strategy. In the short term our communities stands to realize significant economic expansion. In the long term, we may finally achieve what we have sought for centuries—true freedom.