Why Do They Persist In Being So Damn Poor?
While I don't believe the most paranoid rumors (that the levees were purposefully breached, that aid was slow because white people wanted black people to die), I am convinced that race was a factor in the tragedy of New Orleans, and that race continues to play a factor in the poverty in the United States, if only because people who were excluded from the earlier phases of capitalism have a whole lot of catching up to do in the later stages of capitalism.
In the early 20th-century, many black Americans in the South worked as tenant share-croppers, all said and done. They weren't slaves, but they weren't citizens, by any means. Many black people who stepped out of place were reminded of where they belonged, either indirectly or violently.
So, the Civil Rights Act comes along in 1964. Remember: the white "Greatest Generation" have become heroes by now. The black veterans, who often fought in segregized troops, are still trying to gain access to voting privileges, if not for themselves, then for their mothers and grandmothers, who might be the illiterate children of former slaves.
Okay, so I think of that African-American timeline, and then I contrast it with my knowledge of how American financial practices have developed over the past century.
I used to work for a company that bought and sold historical documents. One exhibit that I had a major hand in setting up displayed turn-of-the-century stock certificates. They were beautiful, with hand-wrought etchings of the company name, logo, and officials, but what grabbed everyone’s attention was the coupons. Stock certificates, until some time in the early 1900s, were issued with detachable coupons—bits of paper with recognizable engravings—that could be redeemed for cash. In the historical document trade, an early 1900s unclipped stock certificate from a successful company would be considered rare and valuable.
My grandad grew up in that era of clipped coupons. He believed in dividends and in not touching one's capital, and he died feeling poor although his portfolio and his real estate value said otherwise.
Ok, next generation. That grandfather's son learned the wisdom of trading on value, rather than dividends. My father targeted companies he saw as comers, invested in them, and set an optimal price for selling out. He has multiple degrees, one of which is in math.
Next generation: me. I have little interest in statistics, but having inherited some capital, I feel an obligation to try. My grandfather gave me shares in stocks for Christmas--some of them were shares in worthless goldmines, some of them were profitable shares in drilling companies (all Canadian!). My father is almost resolutely middle-class and gave me advice accordingly; he was very receptive to my crise de conscience that ended with my investing in a Calvert fund.
This tangent is actually my point: even though I am not rich, per se, I have access to an understanding of how to understand capital, investment, dividends, interest, stock value, and all of the apparatus of wealth. My grandad was dirt-poor during the Recession--but he was white. He invested in mines and in the broader Canadian index. He suffered during the late 90s and early 00s because of his profound belief that touching capital was wrong; he lived like a pauper out of the obstinant belief that the companies he'd invested in should be paying dividends that amounted to something. And that's a comparatively well-to-do white family! Imagine for a second what your family story would look like if your grandad was dirt-poor during the Recession and was black. My grandad believed in the market, but it surpassed him in abstraction; I doubt very much that African-American people in my generation had grandfathers with anywhere near as much faith that their futures could be so improved. This generational involvement in the abstract means of wealth-generation has real implications over time.
Back to the financial market today. Did you know that black and Latino people were twice as likely as Asian or white people to be victims of identity theft? That's according to the Council of Better Business Bureaus and Javelin Strategy & Research, as reported by USA Today. Should it really be a surprise that the people who have the least access to education are the most vulnerable to fraud?
Sebastian Holsclaw, a conservative thinker whom I respect, recently suggested, quite rationally, that reasons besides race could explain the specific rates of denial of mortages to minorities. I agree that this analysis is entirely true, given present conditions.
I would however argue that expecting people who have been discriminated against on every level to suddenly understand the mechanisms of modern finance so as to leverage Google stocks against their S&P500 holdings would be simply insane. It would be simply insane in the privileged middle-classes as well, and I hope people are scaling back their expectations accordingly.
But tell me: how many people whose wealth is based on the share price of tech stocks are willing to imagine what the sons and daughters of sharecroppers see in their future? How many people whose wealth is based on the careful management of 401Ks can think of what retirement looks like to union workers? Remember how Mike Tyson burned through his fortune? How he's trying to fight, well past his prime, because he's in debt? Even if we leave to one side all of the legal fees from the man's well-deserved wife-beating indictments, the guy made millions and wasn't educated enough in money to stay out of the hole.
Maybe Tyson is a bad example. Let's take instead the 40-something African-American woman I ran into outside the El Cerrito DMV, a few years ago. She had a job, not one that paid her much, but she insisted that she was a working woman. She was filing to renew her driver's license, as I was, and she was pissed off because somebody had been using her name to write checks. It was complicating her renewal, as I recall. I asked her whether she'd checked her credit, as it was clear that someone had stolen her identity. She had never even thought about that possibility. She'd had money stolen directly out of her account, she'd had mail lifted, and she didn't have the abstract financial thinking to wonder about her credit record. She worked for her living and insisted that she was an honest woman. All I could think to say was that maybe she should google "identity theft," and go from there--but I doubt she was familiar with computers, and I doubt very much that she was familiar with google. So what is this lady going to do? Her lack of experience with the apparatus of modern scams, finance, banking, ID protection, etc, is probably going to set her back far further than the average middle-class white person would, in the same situation.
My point? The mechanisms of modern capitalism require a competence that more often than not comes from being around people who have money. A few people will always prevail against the cycle, sure, but they are the exceptions. Now remember again how recently the Civil Rights Acts was passed, how recently Affirmative Action measures started to have teeth.
How ready are you to blame poor black people for being poor?