Monday, April 06, 2009

Financial Engineering Is The Key For Detroit by Akindele Akinyemi

Detroit is currently under siege from poverty-stricken leadership. Insane individuals such as Detroit City Councilwomen Monica Conyers, Barbara Rose-Collins and even JoAnn Watson are pushing a higher level of mental illness.

Urban conservatism through a silver rights platform can cure the illness here in Detroit. However, this will not be an easy task. Most urban planners have predicted that Detroit will not be back on track until 2035. That means most of our leadership will have to die off before we can see some real significant change. But we can start planting the seeds for change today.

Frederick Douglass understood that slavery is maintained by ignorance. If that’s true, then in an economic era we have to all be about understanding money, and financial engineering education for our children, economic education and ownership for us all. In the 21st century, the fight for equality and justice will not be waged and won in the streets, but the suites; from corporate boardrooms to inner-city classrooms. In the 21st century, education will be the ultimate poverty eradication tool.

Detroiters in 2009 must embrace city, county and state leadership that focus on developing a Silver Rights Movement. There are many people discussing this including John Hope Bryant and James Covington. This movement, that is fused with global education and rebuilding strong families will in turn develop a network by making capitalism and the free enterprise system work for poor people. That the issue in Detroit and the rest of urban Michigan– poverty. For conservatives and the GOP here is where we can start fresh in entering urban communities.

U.N Ambassador Andrew Young is on record saying how capitalism, with no true access to capital, is nothing more than a sophisticated form of slavery.

The free-market and capitalism is not our enemy. Poverty and people who are leading the masses with a poverty-stricken mentality are the enemy. The ones who want a hand-out instead of a hand-up. The ones who refuse to work hard to get ahead. The ones who have allowed poverty to settle into our educational system to create a failing system. The very ones who are suffering adult illiteracy.

Our problem with the free enterprise system is that not enough of our people understand it. Under my GOP Urban Agenda I discuss how cities like Benton Harbor, Inkster, River Rouge, Ecorse, Muskegon/Muskegon Heights and Flint are gold mines for re-development. One, cities like Flint, Pontiac and Saginaw are General Motors areas. Since GM will go bankrupt anyday now and the UAW is in decline this would be the perfect opportunity for anyone who is a silver rights worker to go into these communities and set up shop. Whether you set up a charter school, a private school, even a laundromat these communities will eventually go through a transformation. The more we increase our educational attainment the more viable the community becomes.

Inskter, Michigan does not have a major grocery store. Not even an Aldi or Save-A-Lot. Residents have to go to Westland or Dearborn to shop. The city's population is 25,000 and is 95% Black. Their elementary school is good but their middle and high school programs need work. 80% of the students in the Inkster Public Schools come from Detroit. The major development in this city is housing and that is being handled by the Crosswinds Community.

Detroit is no better. A city of 871,000 we only have two movie theaters, two bowling alleys and NO APPLIANCE STORES. No mass transit program and when the discussion of merging D-DOT with SMART buses the unions cry foul. There is no place for unions in the Silver Rights Movement.

Dr. King said in 1968, with the birth of the Poor People’s Campaign, “you cannot legislate goodness, or pass a law to force someone to like or respect you. … (that) the only way to social justice in a capitalist country is economic parity.

In this case he was telling the truth. Places like Detroit need city leadership that will focus
on empowering our community by converting check cashing customers into banking customers, renters into homeowners, small business dreamers into small business owners, minimum wage workers into living wage workers, and the economically uneducated into the economically empowered. Moving Detroiters up and out of poverty. From the poverty rolls to the payrolls, and hopefully the tax rolls too.

There are some people who have ran for office in the past have told me that they would work hard to keep Wal-Mart out of Detroit. Of course, I had a blank look on my face. In my opinion, keeping Wal-Mart out of Detroit is not a smart idea. Not only because shopping there saves the average family $2,500.00 a year (that’s 10% for a family making $25,000 a year), but them entering our communities creates much needed competition for many businesses. The closest Wal-Mart located next to Detroit is in Dearborn, MI.

Detroit is not an island. It is part of the global community.
After we deal with the crisis in our own finances we need to quickly turn our attention to the issue of Detroit’s long-term competitiveness in the world.

We cannot charge ourselves into a brighter future, nor can we simply cut personal, corporate and governmental budgets into a brighter future. Plain and simple, we need to grow ourselves into a bright future by growing our economy again; that means real jobs, reasonable wages, real opportunity (for all), real savings, a real plan for our future, and real, sustainable investments that pay dividends beyond the next quarter on Wall Street. Investments, such as the education of our children. If we are not careful, our youth will be the next group of under-performing assets that we are forced to deal with.

In an information age and a knowledge economy, we are failing. We are lazy, and now China, India and other countries, where education is a top priority, are cleaning our educational and economic clocks.

Today the high-school drop-out rate in America is 30% across the board, but pushing close to 70% in Detroit. 30% is breath taking but 70% is an economic death sentence for many students in Detroit. 70% of those who drop out of high school end up in our penal system, while individuals who finish high school earn a quarter more than those who do not, and those who go on to finish college earn more than double those who finish high school.

Our children are dropping out of high school because they don’t believe that education is relevant to their futures. The way to make education relevant to their futures is to show kids how to become wealthy, and do well, legally. That’s financial literacy, free enterprise and capitalism, ownership, and for those with a public record, entrepreneurship. We need to make education sexy again.

For our social conservatives, instead of screaming about abortion rights let's discuss pro-life issues from a holistic approach. (1) Explain how we all should strive for life (unborn, born and elder), putting down the gun and picking up the book, eliminating domestic violence in front of our children and (2) explain the financial impacts of issues such as abortion in urban communities. Most people do not know. Marriage is not just a ministry but also a financial connection. Divorce is high in our community because of the lack of financial literacy. The faith-based and non-profit communities must be engaged in changing our community. The old way of legislating social engineering is over. We are moving into financial engineering concepts so if social conservatism fits into that platform then here is your chance to explain it. People are eager to learn new ways of communicating their message to those who may not know.

Meanwhile, fiscal conservatives should stress the importance of
how the private sector need good leadership, and good, responsible capitalism.

The markets should incorporate financial engineering as a basis of all future responsible less than prime mortgage lending, auto loans, student loans, consumer loans and most of all, credit cards. What would happen if we actually rewarded customers for taking a certified financial engineering course with a modest reduction in their outstanding balance, or a reduction in interest rate over time for those who pay their bills on time? All the incentives are on the wrong side of the transaction. Let’s empower individuals and treat customers like long term relationships, instead of one time financial transactions.

K-12 institutions should make financial literacy (9th-12 grade financial engineering) a requirement for all children by the 8th grade.

We should make an electronic, debit card accessed, FDIC insured bank account a legal human right for each and every American. Why should the poor pay a 10% tax to get their own money by going to unscrupulous check cashiers and predatory payday lenders. An electronic account means safer money and lower costs for the poor and the under-served, and increased bank deposits for FDIC insured banks when they need deposits most, which is now.

We should make funding available to certified financial literacy counseling organizations,as well as school districts, cities, and states that make financial literacy policy and financial literacy excellence a priority. This is how we begin to bring back Detroit and other urban communities.

Finally, a global adoption of financial engineering by government, civil society and the private sector, will only help fuel our increasingly interdependent world economy, while strengthening global consumer confidence.

If we are not pushing financial engineering and new developments for our future then Detroit will remain in the condition its in. We will continue to elect poverty-stricken people to office and our city will fall further behind the times. This is why urban conservatism through silver rights is needed in urban areas today.

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