Friday, December 28, 2012

The Second Emancipation

On January 1, 1863 the Emancipation Proclamation became effective. This was an order that had previously been signed by President Abraham Lincoln that declared that “all persons held as slaves within any State or designated part of a State, the people whereof shall then be in rebellion against the United States, shall be then, thenceforward, and forever free; and the Executive Government of the United States, including the military and naval authority thereof, will recognize and maintain the freedom of such persons, and will do no act or acts to repress such persons, or any of them, in any efforts they may make for their actual freedom.” The year 2013 marks the 150th anniversary of its institution.

While all freedom loving people will appropriately recognize and celebrate this historic moment in American history, the current economic status of African Americans presents a dilemma as daunting as the slavery addressed in 1863.

Consider these facts:
  •  The FDIC reports that 54% of African Americans are unbanked - have no bank account (21%), or are underbanked – use alternative financial services such a payday loans, check cashing stores and rent to own (33%).
  • According to the Pew Research Center the net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. The same report stated that median net worth for white families was $113,149 in 2009 or twenty times greater than blacks. 35% of blacks have either zero or negative net worth.
  • In 2007 Demos reported that over 90 percent of African-American families earning between $10,000 and $24,999 had credit card debt.
  • In 2006 the Boston Federal Reserve Bank published a study revealing significant differences in credit card terms based on the racial makeup of the users' neighborhoods. The practice of redlining later was associated with the subprime mortgage crisis, which kicked off the latest recession.
  • The Center for Responsible Lending reports that “Payday lenders are nearly eight times as concentrated in neighborhoods with the largest shares of African Americans and Latinos as compared to white neighborhoods, draining nearly $247 million in fees per year from these communities.” 

Of course crass consumerism and economic injustice are not the exclusive plight of black people. But the history of African Americans and the economic disparities revealed by all available data indicate that the matter is more urgent for blacks than any other group. Especially since the strategy of choice that many blacks have chosen for racial uplift is to expect solutions to come from the government programs.

I believe in government-funded safety nets and strategically utilized public resources that address economic problems. But so much of the dilemma that stifles the economic progress of black people cannot be solved by any government program or proclamation. No law can make someone save money or live within his or her means. No government can inspire someone to work 18 hours a day building a business that they own. No president can convince a parent that they should not spend $315 on a pair of basketball sneakers for a fifteen year old. I repeat what I say in my book: There was a time when we tried to keep up with the Joneses; now we are trying to keep up with ourselves.

Yes – blacks are disproportionately targeted for predatory products like payday loans. But no one forces us sign agreements to pay 400 - 600% interest on debt trap loans.

What made the abolition and civil rights movements so powerful was that they represented people who wanted to be free and to enjoy their human rights. My fear is that today too many of us are satisfied with being financial slaves and have no desire to be free. I hope I am wrong.

Next year while we celebrate the Emancipation Proclamation, I will be travelling the country issuing my own proclamation: Let’s take control of our finances and free ourselves from this new slavery! We have had phenomenal success with politics and protest - but we are still disproportionately poor and economically stuck. Let’s protect the rights that we have gained. But let us also take responsibility for our financial futures and sign our own emancipation proclamations.

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