Go Lean Commentary:
The United States of America has been the best economic manifestation in the history of mankind, (as declared in the book Go Lean…Caribbean Page 67), yet the experience has not been the same for all of its citizens. This definitely applies to the “black and brown” populations. The Caribbean Diaspora fits this classification and their experience fits 100% to the events related in the below news article.
The US is the “land of the free and the home of the brave”, but some restrictions apply. This reality is not new, as racial disparities have long existed in the history of America. But after a major social revolution in the 1960’s, positive change came to American minorities, following by decades of progress.
Then 2008 happened …
That year saw the crisis of the Great Recession where American society lost $11 Trillion in net worth; then later regained $13.5 Trillion; (Go Lean book Page 69). According to the foregoing article, the Great Recession losses were not evenly distributed; nor was the subsequent recovery – those who lost the net worth (Middle Class) were not the ones who recovered (One Percent).
How the recession turned owners into renters and obliterated Black American wealth.
By: Jamelle Bouie
In 2005, three years before the Great Recession, the median black household had a net worth of $12,124. Yes, this was far behind the median white household—which had a net worth of $134,992—but it was a huge improvement from previous decades, in which housing discrimination made wealth accumulation difficult (if not impossible) for the large majority of African-American families.
By the official end of the recession in 2009, median household net worth for blacks had fallen to $5,677—a generation’s worth of hard work and progress wiped out. (The number for whites, by comparison, was $113,149.) Overall, from 2007 to 2010, wealth for blacks declined by an average of 31 percent, home equity by an average of 28 percent, and retirement savings by an average of 35 percent. By contrast, whites lost 11 percent in wealth, lost 24 percent in home equity, and gained 9 percent in retirement savings. According to a 2013 report [a] by researchers at BrandeisUniversity, “half the collective wealth of African-American families was stripped away during the Great Recession.”
It was a startling retrenchment, creating the largest wealth, income, and employment gaps since the 1990s. And, if a new study [b] from researchers at CornellUniversity and RiceUniversity is any indication, these gaps are deep, persistent, and difficult to eradicate.
In the study, called “Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009,” sociologist Gregory Sharp and demographer Matthew Hall examine the relationship between race and risk in homeownership. Simply put, African-Americans are much more likely than whites to switch from owning homes to renting them.
“The 1968 passage of the Fair Housing Act outlawed housing market discrimination based on race,” explained Sharp in a press release. “African-American homeowners who purchased their homes in the late 1960s or 1970s were no more or less likely to become renters than were white owners. However, emerging racial disparities over the next three decades resulted in black owners who bought their homes in the 2000s being 50 percent more likely to lose their homeowner status than similar white owners.”
This wasn’t a matter of personal irresponsibility. Even after adjusting for socio-economic characteristics, debt loads, education, and life-cycle traits like divorce or job loss, blacks were more likely to lose their homes than whites.
If you’re familiar with American history and housing policy, this shouldn’t come as a surprise. The explicit housing discrimination of the mid-20th century has left a mark—arguably a scar—on the landscape of American homeownership. The combination of red-lining, block-busting, racial covenants, and other discriminatory measures means that, even now, a majority of blacks live in neighborhoods with relatively poor access to capital and mortgage loans. What’s more, this systematic discrimination has left many black households unable to afford down payments or other housing costs, even if loans are available.
And in the event that black households are able to save and afford a home, they aren’t as financially secure as their white counterparts. To wit, middle-class African-Americans are more likely to belong to the lower middle class of civil servants and government workers—professions that, in the last five years, have been slashed as a consequence of mass public-sector downsizing [c]. All else being equal, a black schoolteacher who loses her job to budget cuts is less likely to have savings—and thus a safety net—than her white counterpart.
But this isn’t just a story of legacies and effects. In addition to showing the consequences of past discrimination, Sharp and Hall argue that African-Americans have been victimized by a new system of market exploitation. Banks like Wells Fargo steered [d] blacks and other minorities into the worst subprime loans, giving them less favorable terms than whites and foreclosing on countless homes. In a 2012 lawsuit [e], the ACLU and National Consumer Law Center alleged that the now-defunct New Century Financial, working with Morgan Stanley, pushed thousands of black borrowers into the riskiest loans, leaving many in financial ruin. As early as 2005, the Wall Street Journal reported [f] that blacks were twice as likely to receive subprime loans. And in a New York University study published last year [g], researchers found that black and Hispanic families making more than $200,000 a year were more likely to receive subprime loans than white families making less than $30,000.
Together, all of this means that—according to Sharp and Hall—African-Americans are 45 percent more likely than whites to lose their homes. That means they’re more likely to lose their accumulated wealth and to slide down the income ladder, and less likely to pass the advantages of status and mobility to their children.
Apropos of that observation, recent data from the Bureau of Labor Statistics [h] shows an incredible level of youth unemployment for blacks and Latinos. More than 21 percent of African-Americans aged 16 to 24 are out of work, compared with a national average of 14.2 percent. For black teenagers in particular, joblessness soars to nearly 40 percent. It’s a catastrophe with serious economic consequences. The Center for American Progress estimates [i] that the young adults who experienced long-term unemployment during the worst of the recession will lose more than $20 billion in earnings over the next 10 years. And given the slow recovery, odds are good they’ll never recover those lost earnings.
It’s tempting to treat these as subsets of broader problems: poor assistance to homeowners and too much austerity. But they’re not. Even during the boom economy of the 1990s, black employment lagged behind the national average. And the racial wealth gap is a persistent fact of American life.
Likewise, the challenges of black homeownership are a function of discriminatory housing policy [j], as are a whole host of other problems, from mass incarceration and overly punitive policing to poor air quality [k] and food access. These challenges are heavily location-dependent, which is another way to say they are heavily racialized and most prevalent in the segregated, working-class or low-income communities that characterize life for most African-Americans [l], even those with middle-class incomes.
For reasons both political and ideological, it’s nearly verboten in mainstream conversation to argue that racialized problems require race-conscious solutions. Knowing what we know about the demographics of foreclosures, for example, we should ensure any program to help underwater homeowners includes a specific measure to assist black victims of predatory lending, who may need additional help to get on sure footing.
For more than anyone else, this is a message for liberals and progressives, who—for all of their racial sensitivity—are still reluctant to tackle the economic dimensions of racism, even as they represent the vast majority of nonwhite voters and draw critical support from African-American constituencies. It’s how Elizabeth Warren could give “11 Commandments for Progressives” [m] —and receive huge applause—without mentioning the deep problems of racial inequality. One of her commandments is “that no one should work full-time and still live in poverty, and that means raising the minimum wage.” But solving this problem for African-Americans and Latinos—who tend to live in areas that are segregated from job opportunities—is very different than solving it for whites.
While conservatives and Republicans can play a role here, it’s Democrats who are committed to reducing income inequality and bringing balance to our lopsided economic system. Success on those fronts requires a return to race-conscious policymaking, from programs to increase the geographic mobility of low-income workers—relocation grants for individuals or transportation grants for communities with a spatial mismatch between jobs and housing—to public works programs aimed at low-income minority communities, to race-based affirmative action as a way to boost a flagging black middle class.
There’s little in American life that escapes the still-powerful pull of past and present racism, and effective policymaking—to say nothing of effective problem-solving—requires a response to that racism. Otherwise, we entrench the same disparities for a new generation.
Jamelle Bouie is a Slate staff writer covering politics, policy, and race.
The Slate – Daily Magazine for the Web – Posted 07-24-2014; retrieved 08-04-2014
The points of this foregoing article aligns with the Go Lean book and the collection of blogs/commentaries. The book posits that the crisis persists for the Caribbean and their Diaspora in North America and Europe. What’s more, this movement asserts that this crisis, any crisis, is a terrible thing to waste.
The Caribbean Diaspora have fled their Caribbean homelands over past decades in search of better economic opportunities. It is now the conclusion that many of these “lands of refuge” are rigged in favor of certain ethnic groups; those groups do not include the “black and brown” of the Caribbean. This commentary has relayed, repeatedly, that this Caribbean-bred demographic can do better at home … in the Caribbean. The following are related previous posts:
Unfortunately for the Caribbean, this societal abandonment has continued. Analysis by the Inter-American Development Bank asserts that the Caribbean continues to endure a brain drain of 70% among the college educated population; (http://www.goleancaribbean.com/blog/?p=1433).
This blog entry depicted how the Caribbean Diaspora that fled to Great Britain has not fared well; (http://www.goleancaribbean.com/blog/?p=1683)
In addition to economics, there is the concern for security and justice. This blog entry (http://www.goleancaribbean.com/blog/?p=546) related the dual standards of justice in the US, where all men are treated as equals (wink-wink), just some are more equal than others.
Yes, as the old adage relates: “the grass is not greener on the other side”. See this VIDEO here (Part 1 of 2):
(Click on first continuation video for Part 2 of 2 or click here: https://www.youtube.com/watch?v=gOS3BBmUxvs)
The assertion of the book Go Lean…Caribbean is that once the proposed empowerments are put in place, the Caribbean Diaspora should consider repatriating to their ancestral homelands.
Social Scientists maintain that when animals/mammals are confronted with threats, they have to choose between (stand and) fight or flight. For 50 years, the Caribbean citizens have defaulted to flight. Change has now come to the Caribbean. The book Go Lean…Caribbean serving as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), hereby presents “stand and fight” options. This roadmap will spearhead the elevation of Caribbean society. The prime directives of the CU are presented as the following 3 statements:
- Optimization of the economic engines in order to grow the regional economy & create 2.2 million new jobs at home.
- Establishment of a security apparatus to protect the resultant economic engines.
- Improve Caribbean governance to support these engines.
The book posits that the improved conditions projected over the 5 years of the roadmap will neutralize the impetus for Caribbean citizens to flee, identified as “push and pull” factors. This point is stressed early in the book (Page 13) in the following pronouncements in the Declaration of Interdependence:
xix. Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores. This repatriation should be effected with the appropriate guards so as not to imperil the lives and securities of the repatriated citizens or the communities they inhabit. The right of repatriation is to be extended to any natural born citizens despite any previous naturalization to foreign sovereignties.
xx. Whereas the results of our decades of migration created a vibrant Diaspora in foreign lands, the Federation must organize interactions with this population into structured markets. Thus allowing foreign consumption of domestic products, services and media, which is a positive trade impact. These economic activities must not be exploited by others’ profiteering but rather harnessed by Federation resources for efficient repatriations.
This foregoing article highlights the new realities ushered into the world as a result of the events of the Year 2008. The Go Lean book focuses heavy on this subject, even identifying this as a motivation in the same Declaration of Interdependence early in the book (Page 13):
xxv. Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.
The Go Lean roadmap proposes a community ethos in which economic principles are recognized as playing a crucial role in the chain-of-events that led to fight-or-flight decisions for Caribbean Diaspora. (These principles were always the reality, just not professionally managed as such). These principles are identified and qualified (Page 21) as follows:
1. People Choose
2. All Choices Involve Costs
3. People Respond to Incentives in Predictable Ways
4. Economic Systems Influence Individual Choices and Incentives
5. Voluntary Trade Creates Wealth
6. The Consequences of Choices Lie in the Future
These principles cannot be glossed over or handled lightly; this is why the Go Lean book contains 370 pages of finite details for managing economic change in the region. In addition to the assessments of the region’s standings, the book contains the following sample of community ethos, strategies, tactics, implementations and advocacies to impact the Caribbean homeland:
|Community Ethos – Job Multiplier||Page 22|
|Community Ethos – Lean Operations||Page 24|
|Community Ethos – Return on Investments||Page 24|
|Community Ethos – Ways to Impact the Future||Page 26|
|Strategy – Competition – Remain Home –vs- Emigrate||Page 49|
|Strategy – Agents of Change – Aging Diaspora||Page 57|
|Tactical – Growing the Caribbean Economy to $800 Billion||Page 67|
|Tactical – Separation of Powers – Versus Member-States Governments||Page 71|
|Implementation – Year 1 / Assemble Phase||Page 96|
|Implementation – Ways to Deliver||Page 109|
|Implementation – Ways to Better Manage Debt||Page 114|
|Implementation – Trade Mission Objectives||Page 116|
|Implementation – Reasons to Repatriate||Page 118|
|Anecdote – Experiences of a Repatriated Resident||Page 126|
|Planning – 10 Big Ideas for the Caribbean Region||Page 127|
|Planning – Lessons Learned from 2008||Page 136|
|Advocacy – Ways to Grow the Economy||Page 151|
|Advocacy – Ways to Create Jobs||Page 152|
|Advocacy – Ways to Improve Credit Ratings||Page 155|
|Advocacy – Ways to Improve Housing||Page 161|
|Advocacy – Ways to Impact Wall Street||Page 200|
|Anecdote – Experiences of Diaspora Member Living Abroad||Page 216|
|Advocacy – Ways to Impact the Diaspora||Page 217|
|Advocacy – Ways to Help the Middle Class||Page 223|
|Appendix – Caribbean Emigration Statistics||Page 269|
|Appendix – Credit Ratings Agencies Role in 2008||Page 276|
The Go Lean roadmap has simple motives: fix the problems in the homeland to make the Caribbean a better place to live, work and play. We want to keep Caribbean citizens in the Caribbean. There should be no need to go abroad and try to foster an existence in a foreign land. There is heavy-lifting wherever a person resides. Let’s do the “lifting” here, where at least we are at home and we are treated equitably.
Too many people left, yet have too little to show for it. Now is the time for all of the Diaspora (those in the US, and other countries) to lean-in for the empowerments described in the book Go Lean … Caribbean. We understand your pain, we have been impacted too. (The publishers of the book were entrenched in the Wall Street culture in 2008). This Big Idea now is to use the same energy and innovation to create solutions for Main Street – but not Main Street USA, rather Main Street Caribbean.
This is a dramatic change for the Caribbean, one that is overdue, an invitation to build an elevated society in the Caribbean that many had fled to find elsewhere, yet failed. We can make the Caribbean a better place to live, work and play. We can succeed here.
Download the book Go Lean … Caribbean – now!
a. Retrieved from https://www.evernote.com/shard/s4/sh/2f378f98-d21b-4f5b-89d4-c3a47419b0ad/479f14e61917697b135246e01d20f85f
b. Retrieved from http://news.rice.edu/2014/07/22/african-american-homeownership-increasingly-less-stable-and-more-risky-2/
c. Retrieved from http://www.epi.org/publication/public-sector-job-losses-unprecedented-drag/
d. Retrieved from http://articles.baltimoresun.com/2012-07-12/news/bs-md-ci-wells-fargo-20120712_1_mike-heid-wells-fargo-home-mortgage-subprime-mortgages
e. Retrieved from http://www.citylab.com/housing/2012/10/did-big-banks-subprime-mortgage-crisis-violate-civil-rights-law/3598/
f. Retrieved from http://online.wsj.com/news/articles/SB111318092881303093
g. Retrieved from http://www.citylab.com/housing/2013/08/blacks-really-were-targeted-bogus-loans-during-housing-boom/6559/
h. Retrieved from http://www.npr.org/blogs/codeswitch/2014/07/21/329864863/the-youth-unemployment-crisis-hits-african-americans-hardest
i. Retrieved from http://www.americanprogress.org/issues/labor/report/2013/04/05/59428/the-high-cost-of-youth-unemployment/
j. Retrieved from http://www.thedailybeast.com/articles/2014/03/13/how-we-built-the-ghettos.html
k. Retrieved from http://grist.org/climate-energy/before-repairing-the-climate-well-have-to-repair-the-impacts-of-racism/
l. Retrieved from http://www.slate.com/articles/news_and_politics/politics/2014/04/desean_jackson_richard_sherman_and_ black_american_economic_mobility_why.html
m. Retrieved from http://www.vox.com/2014/7/21/5918063/elizabeth-warrens-11-commandments-for-progressives-show-democrats