Higher borrowing rates and a shortage of assets to be passed from previous generations continue to create instability in America's black middle class, a problem that often is overshadowed by severe urban poverty but that Congress should not ignore, Rep. Artur Davis (D-Alabama) said yesterday at a Congressional Black Caucus legislative conference. Speakers said many middle-income blacks struggle financially because they own few assets such as real estate or stocks, and frequently pay more for home mortgages, auto loans and other big-ticket items.
The panelists said that home ownership is a critical issue, pointing to government programs in the early 20th century that helped build the country's middle class by providing low-interest home loans requiring little or no down payment. "African-Americans were denied, for the most part, the early fruits of that legislation. That has set the cast for segregated communities across the country," said Melvin Oliver, a sociologist at the University of California-Santa Barbara. "You get ahead on your assets."
Asked about it by Rep. Davis, the speakers said black liberal comedian Bill Cosby's high-profile criticism of consumerism in modern-day black culture was off the mark. "There's always a kernel of truth to what he's saying but it's very unnuanced," said the Rev. Raphael G. Warnock, senior pastor of Ebenezer Baptist Church in Atlanta, where the Rev. Martin Luther King Jr. preached. "We have to challenge our own people, but we have to find a way to do that without beating people down." One major impediment is discrimination in mortgage lending, insurance costs and other basic expenses, the speakers said. Davis, a member of the House Financial Services Committee who has backed proposals to crack down on high-interest mortgage loans and predatory lending, said churches and community groups should get more involved in pressuring Congress to act. "A lot of people think the middle class just happened because of the strength of our economy. Yes, the economy had a lot to do with it ... but there were government policies that made a difference," Rep. Davis said, citing programs such as student loans, the GI Bill and Social Security. "That tells me that government can be relevant."
My response: Can fiscal liberals meet without discussing government as sole savior? How about an emphasis on of black folks as our primary saviors for a change? While discrimination in lending is an issue, that is hardly the primary issue. Black Americans have money, as our $780 billion GDP that would make us the world's 16rh largest economy on our own shows. The major issue is what we do with our money. As a group we consume beyond our means, and (1) don't save and invest enough (and generally don't do so at the various black-owned banks); and (2) jack up our credit rating through bad financial choices, which leaves "predatory" lenders as the only other option for many folks. Not to mention that the current Social Security system generates a low return, when privatizing it would generate higher returns for us coloreds. That is where the overwhelming majority of focus should lie.