Blog: Mistaken Identity
By Dr. Eugene Stovall
“When white folks get a cold, black folks get pneumonia …” Malcolm X
The long running television series, Law and Order, was one of the better TV dramas, portraying blacks as people not puppets. In the Law and Order episode, ‘Identity’, a black homeowner becomes the victim of a computer programmer who lost his job in the economic downturn. The computer programmer meticulously searched property records until he found a home valued at $500,000 and owned free and clear by a black man. Assuming the black man’s identity, the white man took out a $100,000 mortgage on the black man’s property. After obtaining the proceeds of the loan, the identity thief bought two diamonds worth $300,000 and then resold the diamonds for $400,000. Of course, this was just a television drama, but it offers many things for a black person to ponder … including the utter impossibility that a black person could have leveraged a $100, 000 mortgage into a $400, 000 cash bank deposit.
In the past quarter, 169,000 new jobs were created in the United States, but few, if any, went into the black community. The fact is, that for black people, Obama’s “economic recovery” is virtually nonexistent. This fact is no better illustrated than the disastrous impact the “economic downturn” has had on African-American-owned housing. Bloomberg reports that African-American home ownership hit an 18 year low in 2013. The root cause of Black America’s housing crisis was the high cost loans that some 40% of African-American borrowers took out during the housing bubble. The banks conspired with Wall Street to bundle sub-prime, high cost mortgages targeted at the African-American and Latino communities as derivative securities. Wall Street and banks made billions by selling these sub-prime mortgages as highly rated securities to pension funds and investment houses overseas.
In 2012, Wells Fargo, the nation’s largest home mortgage lender, agreed to pay $175 million to settle cases where its brokers discriminated against African-American and Hispanic borrowers. But these monies did not go to the Black and Hispanic homeowners who were victimized by the scams, but to the European investors who bought the derivatives. Not wishing to upset Barack Obama, civil rights and the faith community stood by and did nothing to support those thousands of black people who lost their homes or those communities like Detroit and San Jose that have lost millions in the property tax revenues necessary to maintain essential services. The black legislative leaders were too busy “marching on Washington” to assist the victims of the bank and Wall Street housing scam, but the Obama administration compensated Wall Street and the banks for the monies paid to the Europeans ____ and gave them several more millions to boot.
For blacks in the U.S., 18 years of economic progress has vanished, with a rebound in housing slipping further out of reach and the unemployment rate almost twice that of whites. The homeownership rate for blacks fell from 50 percent during the housing bubble to 43 percent in the second quarter, the lowest since 1995. The rate for whites stopped falling two years ago, settling at about 73 percent, only 3 percentage points below the 2004 peak, according to the Census Bureau.
And yet the housing catastrophe that hit the black community could have been averted had blacks exercised any collective intelligence. Years ago, a black investment group opened The Bank of Oakland across the bay from the financial center of the Pacific Rim, San Francisco. However, after only three years, The Bank of Oakland closed. Had this bank been successful and had it followed ethical lending practices, hundreds of black property owners could have been spared foreclosure on their homes when the housing bubble burst. Why did the Bank of Oakland fail? And why are there no successful black banks anywhere in the United States? Certainly, black people have enough money to open banks. In Oakland, alone there are three major sports franchises: the Golden State Warriors, the Oakland Athletics and the Oakland Raiders. If the black professional ball players in Oakland deposited their salaries into a black-owned bank such as the Bank of Oakland, it would have made a dramatic difference in the economic, as well as the social situation of this community. However Oakland’s black leadership has a very limited imagination. Their big idea is inviting the daughter of George Wallace into Oakland to discuss her father, the arch-segregationist governor of Alabama, and his role in the civil rights movement.
From the end of 2008 to the middle of 2013, during Barack Obama’s tenure in office, total U.S. wealth increased from $47 trillion to $72 trillion. About $16 trillion of that was from stocks and other financial instruments. The richest 1% of Americans own 38% of the stocks, and 50% of the non-stock financial assets. Under Obama the richest 1% of Americans gained $6.1 trillion. The richest Americans number 1.2 million households and under Obama each household increased its wealth by over $5 million. The next richest 4%, 4.8 million households, gained $5.1 trillion which is over a million dollars for each of their households. At the same time under the “first black” president, black families, one after another, lost their jobs and had their homes foreclosed on while the civil rights leaders, religious authorities and elected politicians did absolutely nothing. For the black community, the problem was one of ‘mistaken identity’. Black people believed that the man in the white house was the president when in reality he was only the butler.
A new study conducted by the Center for Responsive Politics discovered that for the first time, more than half those in the House and Senate are millionaires. Each year lawmakers are required to declare their financial assets to the public. The CRP study, based upon disclosures filed in 2013, found that the median net worth for the 530 current lawmakers in Congress as of the May filing deadline was $1,008,767. This was an increase from last year, when the average lawmaker’s wealth was $966,000. Congressional Democrats had a median net worth of $1.04 million. I wonder if that includes the Congressperson from Oakland’s 7th Congressional District. No matter … it seems that the black community has a bad case of pneumonia and white folks don’t even have a cold.