There is no better lens than a review of the American housing and stock market over the last 10 years through which to view the BlackElectorate.com ‘Business and Building’ Community Black Bank Initiative For Wealth Creation, Financial Literacy, and Community Development.
There is no greater (or worse) story that gives the three-dimensional picture of why a well-coordinated political, cultural, and economic mass movement in these three areas is needed.
Wealth Creation
While many Black Americans participated in the stock market and became homeowners for the first time, 10 years after those gains began to materialize, they have almost entirely evaporated.
Black homeownership, according to the U.S. Census Bureau went from 44.8% in 1997 to a peak of 49.1% in 2004, before settling at 47.2% in 2007. According to the Ariel-Schwab Survey, Black stock ownership spiked from 57%, in 1998, the first year of the survey, to 74% in 2002. By 2007 it was back at 1998 levels – 57%.
Financial Literacy
The sub-prime loan crisis has been full of accounts of individuals 1) who signed documents they did not understand and 2) who were deceived (by individuals posing as financial experts) into accepting unfavorable terms and conditions.
These stories are compounded by case after case of persons who have been caught in a personal debt spiral and pyramid due to their ignorance of the consumer lending industry and the many traps of the consumer lending industry.
Community Development
The dramatic rise in the ownership of paper assets over the last 10 years has not lead to the real development of our communities. Leaving aside all of the latest terms, formulas, concepts, and models of community development promoted by financial gurus, activists, elected officials, government agencies, economists, and even some traditional community-based organizations; community development always revolves around the basic unit of any society – the individual, and the institutions they construct to evolve and steward life activity, like businesses and schools.
If one were to define community development in these basic terms, it is clear that the wealth created on paper, through the stock market and housing market over the last ten years has not led to a significant improvement in the quality of life of the masses of Black Americans as evidenced by Black entrepreneurs (over 80% of which still have no more than a single employee); incarceration rates and crime statistics (with alarming murder rates in Black communities); improved educational institutions (illiteracy, graduation rates, and standardized test scores paint the picture) and employment (Black male and teenage unemployment figures are staggering and the Black unemployment rate, which was 7.6% in December of 2000, stands near its 1997 levels – 9.7%, as of May of 2008 according to official Department of Labor statistics.)
So what do we have to show for the last ten years?
Certainly, financial gains and success stories for a minority of Black America, but more importantly, painful but powerful lessons that can inform and fuel a future economic renaissance.
While there is a 400-year old historical context that explains what has taken place over the past 10 years – as well as many local and global political, cultural, and financial factors – there is currently no dedicated or coordinated effort to find a single economic institution where all of these factors meet and connect, enabling the widest cross section of Black Americans, regardless of age, religious background, geographical location, political ideology, partisan affiliation, class status, educational level, or occupation to understand the dilemma we are in, identify their enlightened self-interest, and participate in a viable solution.
That institution is the Black-Owned Bank – which consists of our formal commercial lending institutions across the countries as well as informal institutions of cooperative economics like investment clubs and ethnic strategies for pooling of capital through rotating credit associations.
The study and analysis of the history and current condition of our Black-owned institutions of financial aggregation and intermediation – banks and cooperative economic pools – and a mass movement to engage and strengthen them in mutually accountable relationships is a winning strategy to improve the quality of life in Black America.
This website is dedicated to providing a spark to ignite that effort and inform that strategy.
