In this article I continue to discuss motivational factors that must be taken into account to develop different ideas for helping black Americans improve their position in the American economy. Decades of government programs and trillions of dollars have not achieved acceptable outcomes. Some black American demographics are worse now than when massive government programs started in the mid-1960’s, involving increased family breakup and increased number of children born out of wedlock by teenagers. Different knowledge must be applied to develop different approaches that will achieve acceptable outcomes.
This article, and several that follow, discuss a major motivational factor relating to people understanding the significance of what they do. People who understand the importance of their actions will strive harder to do better. To understand the importance of their actions black Americans, along with all common Americans, have to increase their knowledge and understanding of history.
News reports recently stated that Americans know little about history. Having extensive university course work and decades of independent reading in the social sciences, including history, reviewing high school and university history textbooks brings to mind the possibility that little governmental or media effort is directed toward Americans knowing much about the real past. Uninformed, uneducated people, kept ignorant of their past, are easily fooled and herded for the political and economic benefit of a few wealth people. People, who study the social sciences across the broad scope of history, can see this pattern. It has existed for thousands of years and is designed to control the many for the benefit of a wealthy few. The pattern continues to exist throughout the world but is little discussed in textbooks or publicized through media news or programs.
Because of our American representative/democratic form of government it is more difficult for a few wealthy people to control our government as opposed to other nations like England, China, Russia, Angola, Mexico, etc. These other nations’ governments recognize different classes of people within their populations either legally or on a practical basis. They are established based on the assumption that a few wealthy people will control the government and economy and these few people will stay wealthy generation after generation while most people will remain uneducated, uninformed, politically powerless, poor, and a source of cheap labor.
Throughout thousands of years the wealthiest nations have been class-based made up of a few people who controlled governmental power and structured the economy for their personal benefit. During the last 500 years a movement has gained traction based on the idea that all people should be first-class citizens. The American founding documents included words about people being created equal and having equal rights, etc. Our history has included progress toward making these words a legal and practical reality, but only since the mid-1950’s has our Supreme Court and Congress institutionalized these concepts into legal practice. This progress must be seen as a continuation of the American Revolution but progress has not been uniform or continuous. It has been a “two steps forward but one step back” activity. Our efforts to continue this revolution must continue today.
A normal, human impediment to continuing the American Revolution involves efforts by the already wealthy to control government for their benefit and pass their riches from generation to generation. Based on our democratic system and practical implementation of a classless society during the last 60 years, wealthy Americans must resort to other means to control government and the economy as opposed to those used in other nations. Today to maintain this control, the wealthy own media outlets including television and radio networks, newspapers, news websites, movie and television production companies, and contribute massive masses of cash to political campaigns.
The following articles briefly discuss several elements of this strategy, including passage and enforcement of laws and government regulations that encroach on civil rights and liberties and imprison large segments of Americans, overemphasis on the need for government and government protection, increased taxes for common Americans, and implementation of approaches that foster divisiveness among the common people. This strategy involves governmental pronouncements and manipulation of news and historical information designed to keep common Americans in their place. Of course, black Americans continue “in their place” where they have been for 400 years, but for them to do anything meaningful about this they have to better understand their past and devise new approaches to accomplish different results from that that have been resulting for the last 60 years.
Joseph L. Bass, Ed.D. is a retired business/organizational consultant, seeking to improve society using his decades of experience enhancing corporations and government agencies. What is a society other than a large, complex organization created by a people for their own betterment? He is executive director of the non-profit ABetterSociety.Info, Inc.
Showing posts with label african american wealth. Show all posts
Showing posts with label african american wealth. Show all posts
Monday, June 20, 2011
Thursday, June 9, 2011
Organizational and Motivational Factors
In this article I explore assumptions about the relationship between business and government organizations, our national economy, and different approaches for helping black Americans. What is a society other than a large, complex organization created by a people for their own betterment? This article begins a series discussing different approaches designed to achieve different conclusions for black Americans.
In a previous article I quoted Dr. Watkins who wrote the following in “Why Black Men Continue to Suffer, and Why It Must End Now” that was published in Your Black World on June 1, 2011. “… the state of black male existence and employment is at a 40-year low. But this 40-year low is preceded by a 400-year old problem. If we continue to address the problem in the same ways we have in the past, we will continue to reach the same conclusions and find the same faulty solutions. It’s time for a new day in black male America and that day must come right now.”
I agree with his words but think the issue should be expanded to include both black males and black females. Black Americans represent one of our greatest challenges that must be overcome. As everyone knows, these challenges come from the fact that black people were used as a source of legally-enforced cheap labor in the American economy from 1619 up until the mid-1950’s. If you are in doubt about this last date, see http://www.slaverybyanothername.com/. A quote from this website reads, “Across the South, a new variety of slavery emerged after the Civil War. Laws were rewritten to criminalize African-American life. The judicial system was retooled to provide cheap forced labor to mines, farms, timber camps, turpentine makers, railroad builders and entrepreneurs large and small. Tens of thousands of men, the vast majority of them black, found themselves pulled back into slavery.”
In previous articles I wrote about the on-going pattern of dramatic swings in our economy that help a few (Wall Streeters and bankers) and do not help the many in the long run. This is particularly true of black Americans who have been at the bottom of the economic ladder for 400 years. As Dr. Watkins wrote, to rectify this situation we have applied the same faulty solutions that have not resulted in desired conclusions. The bottom line is that none of what has been done has successfully addressed the real issues regarding black American’s employment, health, wealth, and retirement.
As an introduction to this series, this article discusses organizations and their relationship with our national economy. Before I retired I worked as a business/organizational consultant for corporations, government agencies, and non-profits. In virtually all cases, each organization I was asked to help was experiencing challenges related to employee/organizational productivity and motivation. Some of them were in such bad shape I represented their last-ditch effort to not close their doors and go bankrupt. My job was to determine why each organization was experiencing challenges and help them see how to overcome them. (Without pulling a muscle in my old shoulder while patting myself on the back, I can say I was quite good at doing this.) And it is my firm belief that the approaches I used with these organizations can be applied to our national economy. From my point of view the failed approaches attempted to help black Americans did not take into account knowledge that today is applied to business and governmental organizational improvement.
To develop different ideas for helping black Americans, as Dr. Watkins says we should, we have to apply different knowledge and develop different approaches. From my experience, the failed approaches were designed like a circuit board that didn’t have its power cord plugged in. Every improvement program I have studied and observed involved acquiring money, establishing goals, hiring staff, developing work processes and activities, advertising availability, and opening the doors. Not one program was established taking into account the electricity that makes human society successfully function – human motivation. Not one included group-process activities designed to foster the involvement and participation of the people the program was supposed to help. Not one included any determination of what the people the program was supposed to help would have to do themselves to insure program success. How can any human society successfully function without taking into account human motivational factors?
There will be more about this in future articles.
NOTE: If you are interested in knowing more about organizations and motivation read about Abraham Maslow’s hierarchy of needs and his 1954 book Motivation and Personality (See http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs), Frederick Herzberg’s motivational approaches and his book Work and the Nature of Man (See http://en.wikipedia.org/wiki/Frederick_Herzberg and http://en.wikipedia.org/wiki/Two-factor_theory), and J.R. Hackman’s and G.R. Oldham’s job satisfaction approaches and their book Organizational Behavior and Human Performance in a chapter titled Motivation through the Design of Work (See http://en.wikipedia.org/wiki/Job_satisfaction) These were my primary references for my doctoral dissertation at the University of Southern California.
Joseph L. Bass, Ed.D. is a retired business/organizational consultant, seeking to improve society using his decades of experience enhancing corporations and government agencies. What is a society other than a large, complex organization created by a people for their own betterment? He is executive director of the non-profit ABetterSociety.Info, Inc.
In a previous article I quoted Dr. Watkins who wrote the following in “Why Black Men Continue to Suffer, and Why It Must End Now” that was published in Your Black World on June 1, 2011. “… the state of black male existence and employment is at a 40-year low. But this 40-year low is preceded by a 400-year old problem. If we continue to address the problem in the same ways we have in the past, we will continue to reach the same conclusions and find the same faulty solutions. It’s time for a new day in black male America and that day must come right now.”
I agree with his words but think the issue should be expanded to include both black males and black females. Black Americans represent one of our greatest challenges that must be overcome. As everyone knows, these challenges come from the fact that black people were used as a source of legally-enforced cheap labor in the American economy from 1619 up until the mid-1950’s. If you are in doubt about this last date, see http://www.slaverybyanothername.com/. A quote from this website reads, “Across the South, a new variety of slavery emerged after the Civil War. Laws were rewritten to criminalize African-American life. The judicial system was retooled to provide cheap forced labor to mines, farms, timber camps, turpentine makers, railroad builders and entrepreneurs large and small. Tens of thousands of men, the vast majority of them black, found themselves pulled back into slavery.”
In previous articles I wrote about the on-going pattern of dramatic swings in our economy that help a few (Wall Streeters and bankers) and do not help the many in the long run. This is particularly true of black Americans who have been at the bottom of the economic ladder for 400 years. As Dr. Watkins wrote, to rectify this situation we have applied the same faulty solutions that have not resulted in desired conclusions. The bottom line is that none of what has been done has successfully addressed the real issues regarding black American’s employment, health, wealth, and retirement.
As an introduction to this series, this article discusses organizations and their relationship with our national economy. Before I retired I worked as a business/organizational consultant for corporations, government agencies, and non-profits. In virtually all cases, each organization I was asked to help was experiencing challenges related to employee/organizational productivity and motivation. Some of them were in such bad shape I represented their last-ditch effort to not close their doors and go bankrupt. My job was to determine why each organization was experiencing challenges and help them see how to overcome them. (Without pulling a muscle in my old shoulder while patting myself on the back, I can say I was quite good at doing this.) And it is my firm belief that the approaches I used with these organizations can be applied to our national economy. From my point of view the failed approaches attempted to help black Americans did not take into account knowledge that today is applied to business and governmental organizational improvement.
To develop different ideas for helping black Americans, as Dr. Watkins says we should, we have to apply different knowledge and develop different approaches. From my experience, the failed approaches were designed like a circuit board that didn’t have its power cord plugged in. Every improvement program I have studied and observed involved acquiring money, establishing goals, hiring staff, developing work processes and activities, advertising availability, and opening the doors. Not one program was established taking into account the electricity that makes human society successfully function – human motivation. Not one included group-process activities designed to foster the involvement and participation of the people the program was supposed to help. Not one included any determination of what the people the program was supposed to help would have to do themselves to insure program success. How can any human society successfully function without taking into account human motivational factors?
There will be more about this in future articles.
NOTE: If you are interested in knowing more about organizations and motivation read about Abraham Maslow’s hierarchy of needs and his 1954 book Motivation and Personality (See http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs), Frederick Herzberg’s motivational approaches and his book Work and the Nature of Man (See http://en.wikipedia.org/wiki/Frederick_Herzberg and http://en.wikipedia.org/wiki/Two-factor_theory), and J.R. Hackman’s and G.R. Oldham’s job satisfaction approaches and their book Organizational Behavior and Human Performance in a chapter titled Motivation through the Design of Work (See http://en.wikipedia.org/wiki/Job_satisfaction) These were my primary references for my doctoral dissertation at the University of Southern California.
Joseph L. Bass, Ed.D. is a retired business/organizational consultant, seeking to improve society using his decades of experience enhancing corporations and government agencies. What is a society other than a large, complex organization created by a people for their own betterment? He is executive director of the non-profit ABetterSociety.Info, Inc.
Tuesday, June 7, 2011
Wall Streeter Games
In this article I explore assumptions about Wall Streeter and banker games that do not help black Americans. The information provided is designed to question underlying assumptions. It is provided to help readers think critically and participate in an online dialogue. We all want effective programs that truly help black Americans, but successful programs have to be based on valid assumptions. Programs based on invalid assumptions will not achieve desired results.
To explore these assumptions it is first necessary to discuss what is meant by “wealth.” Consider the following example. Two business people have $100,000 of their own money and borrow another $100,000 to create a business. Start-up costs include: renting a facility, securing business licenses and permits, paying for facility remodeling, paying for advertising, purchasing equipment, hiring staff, purchasing inventory, paying for power, heat, air conditioning, etc. They operate their business for one year. All start-up expenses created jobs for the people from whom they purchased goods and services, for the people they hired, and for themselves through paying themselves a monthly salary. At what point do they make a profit? At what point do they create wealth?
A reasonable business answer is: They make a profit, they create wealth, when they are able to pay their bills, pay their employees and themselves a monthly salary with benefits, and pay off the $200,000 used to start the business. When these conditions are met and they make one more dollar, they have made a dollar in profit (created $1.00 in wealth). If during the first year of operation the business were to fail, the partners have artificially stimulated the economy and artificially created jobs but created no wealth. When the business fails the partners have lost their investment and still have to pay off their debt or go bankrupt.
This example outlines the standard situation for any small business owner. One of the great challenges for small business owners, including black Americans, is that we continue to experience dramatic swings in the economy. These swings hinder effectively doing anything about the fact that many black Americans live on the bottom of the economic heap. When the economy swings up and black Americans do better, we hear “a rising tide raises all ships,” and the media and government cheer! When Wallstreeters’ and bankers’ house of cards falls many black Americans lose their jobs or businesses and their homes. And media and government focus is on rebuilding the same house of cards so we can do the same thing all over again.
One of the factors in these swings is that government allows large corporations to operate on different standards from those describe above for small businesses. For example, on April 26, 2011, the New York Times reported that Ford Motor Company made a quarterly profit of $2,550,000,000 ($2.55 billion). The same article reported that Ford’s chief executive is being paid $26,500,000 ($26.5 million) a year. (See http://www.nytimes.com/2011/04/27/business/27ford.html?_r=1&ref=fordmotorcompany). But it requires much internet searching to discover that Ford had a long term debt of $101,640,000,000 ($101.64 billion) on 3/31/11. (See http://ycharts.com/financials/F/quarterly_balance_sheet) How can a business claim to make a profit of $2.55 billion while still owing $101.64 billion in debt? And it is not uncommon for corporations with similar debts to pay share holders a dividend when the corporation hasn’t really made a profit. This practice allows corporations to channel borrowed money to share holders.
Why play this game or any of the other shell games played by Wall Streeters and bankers? The fundamental issue is that they want people to buy and sell “things” in their markets. Their “things” include stocks, bonds, derivatives, etc. They don’t care about the fundamental value of what they sell. The more attractive they can make purchasing their “things,” the more fees they can charge. The more ups and downs in the markets the more people buy and sell.
Regardless of the real value of what they sell, fees are their source of income. Their income is used to pay Wall Streeters and bankers huge salaries and bonuses. As long as these people are allowed to play their games, they will continue to channel money into their personal accounts while not creating real wealth for the American people. And they will do nothing to provide meaningful help for advancing black Americans into the mainstream economy.
Using the money from their personal and corporate accounts these people donate large amounts to political campaigns. They donate to candidates in both parties and, to a certain extent it doesn’t make any difference who wins. They have great influence with either candidate going into an election. Without regard for what should be done for black Americans, Wall Streeters and bankers only care about maintaining their games and the very large sums of money that flow into their personal accounts. As long as voters continue to allow themselves to be distracted by meaningless fringe issues that make up most campaign noise, economic swings that benefit a few will continue. Until American voters make it clear to politicians that changes must be made, nothing meaningful will be done for black Americans. What do readers think about this? Joseph L. Bass, Ed.D.
To explore these assumptions it is first necessary to discuss what is meant by “wealth.” Consider the following example. Two business people have $100,000 of their own money and borrow another $100,000 to create a business. Start-up costs include: renting a facility, securing business licenses and permits, paying for facility remodeling, paying for advertising, purchasing equipment, hiring staff, purchasing inventory, paying for power, heat, air conditioning, etc. They operate their business for one year. All start-up expenses created jobs for the people from whom they purchased goods and services, for the people they hired, and for themselves through paying themselves a monthly salary. At what point do they make a profit? At what point do they create wealth?
A reasonable business answer is: They make a profit, they create wealth, when they are able to pay their bills, pay their employees and themselves a monthly salary with benefits, and pay off the $200,000 used to start the business. When these conditions are met and they make one more dollar, they have made a dollar in profit (created $1.00 in wealth). If during the first year of operation the business were to fail, the partners have artificially stimulated the economy and artificially created jobs but created no wealth. When the business fails the partners have lost their investment and still have to pay off their debt or go bankrupt.
This example outlines the standard situation for any small business owner. One of the great challenges for small business owners, including black Americans, is that we continue to experience dramatic swings in the economy. These swings hinder effectively doing anything about the fact that many black Americans live on the bottom of the economic heap. When the economy swings up and black Americans do better, we hear “a rising tide raises all ships,” and the media and government cheer! When Wallstreeters’ and bankers’ house of cards falls many black Americans lose their jobs or businesses and their homes. And media and government focus is on rebuilding the same house of cards so we can do the same thing all over again.
One of the factors in these swings is that government allows large corporations to operate on different standards from those describe above for small businesses. For example, on April 26, 2011, the New York Times reported that Ford Motor Company made a quarterly profit of $2,550,000,000 ($2.55 billion). The same article reported that Ford’s chief executive is being paid $26,500,000 ($26.5 million) a year. (See http://www.nytimes.com/2011/04/27/business/27ford.html?_r=1&ref=fordmotorcompany). But it requires much internet searching to discover that Ford had a long term debt of $101,640,000,000 ($101.64 billion) on 3/31/11. (See http://ycharts.com/financials/F/quarterly_balance_sheet) How can a business claim to make a profit of $2.55 billion while still owing $101.64 billion in debt? And it is not uncommon for corporations with similar debts to pay share holders a dividend when the corporation hasn’t really made a profit. This practice allows corporations to channel borrowed money to share holders.
Why play this game or any of the other shell games played by Wall Streeters and bankers? The fundamental issue is that they want people to buy and sell “things” in their markets. Their “things” include stocks, bonds, derivatives, etc. They don’t care about the fundamental value of what they sell. The more attractive they can make purchasing their “things,” the more fees they can charge. The more ups and downs in the markets the more people buy and sell.
Regardless of the real value of what they sell, fees are their source of income. Their income is used to pay Wall Streeters and bankers huge salaries and bonuses. As long as these people are allowed to play their games, they will continue to channel money into their personal accounts while not creating real wealth for the American people. And they will do nothing to provide meaningful help for advancing black Americans into the mainstream economy.
Using the money from their personal and corporate accounts these people donate large amounts to political campaigns. They donate to candidates in both parties and, to a certain extent it doesn’t make any difference who wins. They have great influence with either candidate going into an election. Without regard for what should be done for black Americans, Wall Streeters and bankers only care about maintaining their games and the very large sums of money that flow into their personal accounts. As long as voters continue to allow themselves to be distracted by meaningless fringe issues that make up most campaign noise, economic swings that benefit a few will continue. Until American voters make it clear to politicians that changes must be made, nothing meaningful will be done for black Americans. What do readers think about this? Joseph L. Bass, Ed.D.
Monday, June 6, 2011
Creating Jobs vs Creating Wealth
In this article I explore assumptions people have about “solutions” for making life better for black Americans. I explore several assumptions about creating jobs as opposed to creating wealth, stimulating the economy artificially, and “a rising tide raises all boats.” The information provided is designed to question underlying assumptions. It is provided to help readers think critically and participate in an online dialogue. We all want effective programs that truly help black Americans, but successful programs have to be based on valid assumptions. Programs based on invalid assumptions will not achieve desired results.
Dr. Watkins wrote the following in “Why Black Men Continue to Suffer, and Why It Must End Now” that was published in Your Black World on June 1, 2011. “… the state of black male existence and employment is at a 40-year low. But this 40-year low is preceded by a 400-year old problem. If we continue to address the problem in the same ways we have in the past, we will continue to reach the same conclusions and find the same faulty solutions. It’s time for a new day in black male America and that day must come right now.”
I couldn’t agree more. Since Lyndon Johnson in the mid-1960’s we have applied the same “solutions” that have either partially worked, not worked, or made things worse. Too many activists campaign for more of the same programs that have not accomplished desired goals. And we have continued to allow financial practices that result in dramatic swings in the economy. Every time it goes down, like right now, black Americans suffer the most.
We can explore destructive welfare programs later, but suffice to say, like those in Europe, American versions provide sops for those not taking part in the mainstream economy. The sops are supposed to placate the poor while others make billions.
When the economy has been artificially stimulated, the media makes much of the supposed-improved lot of black Americans who temporarily have more jobs, make more money, etc. And this is when we hear “a rising tide raises all ships.” All this reinforces continuing to do the same things, allowing a few to put billions in their personal accounts while temporarily creating jobs that are not based on creation of wealth. Of course, this financial house of cards always falls and many black Americans lose their jobs and their homes. And media and government focus is on rebuilding the same house of cards so we can do the same thing all over again.
There are a number of ways to artificially create jobs without creating wealth. The most recent fiasco is a good example. As our American population grew people needed a place to live. People designed rental property or houses, other people built them, other people sold them, and other people made loans to those desiring to purchase. All of this created wealth as long as the renters and purchasers could pay their rent or make mortgage payments. In the past banks held the mortgages until they were paid off, making their money from interest.
But Wall Streeters and bankers are full of creative ways to make money for their personal accounts that create no additional wealth for the rest of us. Their questionable financial practices result in dramatic swings in the economy. These practices need to be examined and changed so that we can stabilize the economy and focus on the systematic problems that cause black Americans to be at the bottom of the heap. Until this is done, the economic swings and welfare sops will continue and many black Americans will continue “in their place.”
As is often the case, a Wall Streeter/banker “gimmick product” got us into our current mess. Instead of continuing the time-tested practice of bankers holding onto mortgages until paid off, they came up with the idea of packaging various types of mortgages and selling them on the market as separate products. These “products” were divorced from the wealth associated with houses and loans. Selling those produced fees used for Wall Streeters’ and bankers’ salaries and bonuses but created no additional wealth. The huge salaries and bonuses resulted in some of this “funny money” flowing into the economy, artificially stimulating the economy and artificially creating jobs. But all of this was divorced from the original wealth created through building rental buildings and houses.
Today stocks and other gimmick products are owned for seconds instead of being owned for years. This is true of your 401 (k) retirement package, which allows those handling your retirement money to buy and sell “things” as much as they want. This generates more and more fees that generated higher Wall Streeters’ and bankers’ salaries and bonuses.
As everyone knows there are other issues in the black world that need to be examined and addressed. But it will be extremely difficult to do so as long as we experience artificial economic stimulation, “boom or bust” economic swings, and a few making billions. Joseph L. Bass, Ed.D.
Dr. Watkins wrote the following in “Why Black Men Continue to Suffer, and Why It Must End Now” that was published in Your Black World on June 1, 2011. “… the state of black male existence and employment is at a 40-year low. But this 40-year low is preceded by a 400-year old problem. If we continue to address the problem in the same ways we have in the past, we will continue to reach the same conclusions and find the same faulty solutions. It’s time for a new day in black male America and that day must come right now.”
I couldn’t agree more. Since Lyndon Johnson in the mid-1960’s we have applied the same “solutions” that have either partially worked, not worked, or made things worse. Too many activists campaign for more of the same programs that have not accomplished desired goals. And we have continued to allow financial practices that result in dramatic swings in the economy. Every time it goes down, like right now, black Americans suffer the most.
We can explore destructive welfare programs later, but suffice to say, like those in Europe, American versions provide sops for those not taking part in the mainstream economy. The sops are supposed to placate the poor while others make billions.
When the economy has been artificially stimulated, the media makes much of the supposed-improved lot of black Americans who temporarily have more jobs, make more money, etc. And this is when we hear “a rising tide raises all ships.” All this reinforces continuing to do the same things, allowing a few to put billions in their personal accounts while temporarily creating jobs that are not based on creation of wealth. Of course, this financial house of cards always falls and many black Americans lose their jobs and their homes. And media and government focus is on rebuilding the same house of cards so we can do the same thing all over again.
There are a number of ways to artificially create jobs without creating wealth. The most recent fiasco is a good example. As our American population grew people needed a place to live. People designed rental property or houses, other people built them, other people sold them, and other people made loans to those desiring to purchase. All of this created wealth as long as the renters and purchasers could pay their rent or make mortgage payments. In the past banks held the mortgages until they were paid off, making their money from interest.
But Wall Streeters and bankers are full of creative ways to make money for their personal accounts that create no additional wealth for the rest of us. Their questionable financial practices result in dramatic swings in the economy. These practices need to be examined and changed so that we can stabilize the economy and focus on the systematic problems that cause black Americans to be at the bottom of the heap. Until this is done, the economic swings and welfare sops will continue and many black Americans will continue “in their place.”
As is often the case, a Wall Streeter/banker “gimmick product” got us into our current mess. Instead of continuing the time-tested practice of bankers holding onto mortgages until paid off, they came up with the idea of packaging various types of mortgages and selling them on the market as separate products. These “products” were divorced from the wealth associated with houses and loans. Selling those produced fees used for Wall Streeters’ and bankers’ salaries and bonuses but created no additional wealth. The huge salaries and bonuses resulted in some of this “funny money” flowing into the economy, artificially stimulating the economy and artificially creating jobs. But all of this was divorced from the original wealth created through building rental buildings and houses.
Today stocks and other gimmick products are owned for seconds instead of being owned for years. This is true of your 401 (k) retirement package, which allows those handling your retirement money to buy and sell “things” as much as they want. This generates more and more fees that generated higher Wall Streeters’ and bankers’ salaries and bonuses.
As everyone knows there are other issues in the black world that need to be examined and addressed. But it will be extremely difficult to do so as long as we experience artificial economic stimulation, “boom or bust” economic swings, and a few making billions. Joseph L. Bass, Ed.D.
Saturday, August 1, 2009
Illinois Files Discrimination Suit Against Wells Fargo
CHICAGO (Reuters) -- Illinois Attorney General Lisa Madigan filed suit Friday against Wells Fargo & Co., accusing the second-largest mortgage lender of steering blacks and Latinos into high-cost subprime loans.
"As a result of its discriminatory and illegal mortgage lending practices, Wells Fargo transformed our cities' predominantly African-American and Latino neighborhoods into ground zero for subprime lending," Madigan said in a statement.
High foreclosure rates resulted from the illegal sales practices, the state's attorney general said.
Sunday, February 1, 2009
Black Financial Scholar Says The Economic Turndown Might Not Be Such A Bad Thing
By Dr. Boyce Watkins
I hate being the doctor who has to tell the patient he has cancer, but the truth usually sets you free (or so my mother told me): We are in the midst of an economic bloodbath. It’s tough to argue that an economy which shrinks by an annualized rate of 5% is still healthy. It’s hard to tell someone that 7.2% unemployment, with the most job losses since 1945, is a good thing. A 4,000 point drop in the Dow is nothing to sneeze at, even if you have plenty of tissue. Times are tough, we know that.
But if we focus hard enough, we might be able to find a few bright sides to all this. With hopes that no one chooses to kill the messenger, I am going to give it a shot.
1) It could always be much worse.
The United States has, according to some, the strongest economy in the world. Our economy could shrink like Rush Limbaugh’s body on drugs and still be disgustingly rich compared to the rest of the world. Don’t believe me? Consider the “fast-growing” Chinese economy, the one that everyone thinks is going to outpace the United States in the next few years. Our annual tax revenues are nearly 4 times greater than China’s ($2.5 Trillion vs. $670 Billion) and they have over 4 times more people than we do (300 million vs. 1.3 Billion). In other words, our per capita tax receipts are over 16 times greater than China’s. So, we’re far better off than most of the world, even when we’re broke.
2) If there were ever an argument for getting out of Iraq, this might be it.
It’s hard to declare war on random countries if you don’t have the money to do it. War is big business and attacking other countries is a huge financial investment. If you don’t think war is about money, then you may want to take a couple of Political Science and History classes. Perhaps these troubles at home will keep us from creating trouble abroad, since Americans have lost patience with irresponsible, arrogant war-mongering. The Obama stimulus plan is asking for over $800 Billion dollars to boost our economy. We’ve already spent nearly $600 Billion in Iraq. Rather than declaring War on Terror, President Obama has declared War on the Recession, which seems to be a far better investment.
3) If you want to buy cheap stocks or real estate, this is the time to do it.
When the market rises, everyone wants to buy stocks. People forget that you shouldn’t buy stocks when prices are high, you buy when the prices are low. Companies with plenty of cash are grabbing investment and real estate bargains that were hardly available a year ago. You should be doing the same if you can afford to do it. Investors who purchase stocks after major market declines tend to do much better than those who buy during booms. You hear me Warren Buffet?
4) Struggle makes us FOCUSED.
Although I tend to be a hardcore capitalist, a part of me misses the activism of the 1960s, when people cared about more than making a dollar. OK, I wasn’t around in the 1960s, but I’ve watched enough old movies. Going through tough times not only teaches one to pursue a higher purpose in life, it also leads individuals to more carefully scrutinize the state of affairs in our government. In fact, I dare to argue that the financial crisis was just what Barack Obama needed to secure his election over John McCain. Economic prosperity allows us the luxury of choosing our politicians based on silly issues, like gay marriage (as we did in 2004). When we are worried about putting food on the table, we look beyond the silliness and choose the most qualified and most intelligent person for the job (after ensuring that he knows Africa really is a continent). Finally, tough economic times make you more responsible in your own money management, as the threat of financial insecurity keeps us all on high alert.
Those are my points, so again, please don’t kill the messenger. I certainly do not celebrate a weak economy, but I am a firm believer that focusing too much on the door that shuts keeps us from appreciating the ones that just opened. There’s always light at the end of the tunnel, a pot of gold at the end of every rainbow, and….well, you get the point. It’s the toughness of tough times that make the good times good. Keep hanging in there, it’ll be ok.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in ways that Feel Good.” For more information, please visit www.BoyceWatkins.com.
Saturday, January 31, 2009
Money Expert, Boyce Watkins, Says There May Be An Advantage to the Economic Downturn
By Dr. Boyce Watkins
http://www.boycewatkins.com/
I hate being the doctor who has to tell the patient he has cancer, but the truth usually sets you free (or so my mother told me): We are in the midst of an economic bloodbath. It’s tough to argue that an economy which shrinks by an annualized rate of 5% is still healthy. It’s hard to tell someone that 7.2% unemployment, with the most job losses since 1945, is a good thing. A 4,000 point drop in the Dow is nothing to sneeze at, even if you have plenty of tissue. Times are tough, we know that.
http://www.boycewatkins.com/
I hate being the doctor who has to tell the patient he has cancer, but the truth usually sets you free (or so my mother told me): We are in the midst of an economic bloodbath. It’s tough to argue that an economy which shrinks by an annualized rate of 5% is still healthy. It’s hard to tell someone that 7.2% unemployment, with the most job losses since 1945, is a good thing. A 4,000 point drop in the Dow is nothing to sneeze at, even if you have plenty of tissue. Times are tough, we know that.
But if we focus hard enough, we might be able to find a few bright sides to all this. With hopes that no one chooses to kill the messenger, I am going to give it a shot.
1) It could always be much worse.
The United States has, according to some, the strongest economy in the world. Our economy could shrink like Rush Limbaugh’s body on drugs and still be disgustingly rich compared to the rest of the world. Don’t believe me? Consider the “fast-growing” Chinese economy, the one that everyone thinks is going to outpace the United States in the next few years. Our annual tax revenues are nearly 4 times greater than China’s ($2.5 Trillion vs. $670 Billion) and they have over 4 times more people than we do (300 million vs. 1.3 Billion). In other words, our per capita tax receipts are over 16 times greater than China’s. So, we’re far better off than most of the world, even when we’re broke.
The United States has, according to some, the strongest economy in the world. Our economy could shrink like Rush Limbaugh’s body on drugs and still be disgustingly rich compared to the rest of the world. Don’t believe me? Consider the “fast-growing” Chinese economy, the one that everyone thinks is going to outpace the United States in the next few years. Our annual tax revenues are nearly 4 times greater than China’s ($2.5 Trillion vs. $670 Billion) and they have over 4 times more people than we do (300 million vs. 1.3 Billion). In other words, our per capita tax receipts are over 16 times greater than China’s. So, we’re far better off than most of the world, even when we’re broke.
2) If there were ever an argument for getting out of Iraq, this might be it.
It’s hard to declare war on random countries if you don’t have the money to do it. War is big business and attacking other countries is a huge financial investment. If you don’t think war is about money, then you may want to take a couple of Political Science and History classes. Perhaps these troubles at home will keep us from creating trouble abroad, since Americans have lost patience with irresponsible, arrogant war-mongering. The Obama stimulus plan is asking for over $800 Billion dollars to boost our economy. We’ve already spent nearly $600 Billion in Iraq. Rather than declaring War on Terror, President Obama has declared War on the Recession, which seems to be a far better investment.
It’s hard to declare war on random countries if you don’t have the money to do it. War is big business and attacking other countries is a huge financial investment. If you don’t think war is about money, then you may want to take a couple of Political Science and History classes. Perhaps these troubles at home will keep us from creating trouble abroad, since Americans have lost patience with irresponsible, arrogant war-mongering. The Obama stimulus plan is asking for over $800 Billion dollars to boost our economy. We’ve already spent nearly $600 Billion in Iraq. Rather than declaring War on Terror, President Obama has declared War on the Recession, which seems to be a far better investment.
3) If you want to buy cheap stocks or real estate, this is the time to do it.
When the market rises, everyone wants to buy stocks. People forget that you shouldn’t buy stocks when prices are high, you buy when the prices are low. Companies with plenty of cash are grabbing investment and real estate bargains that were hardly available a year ago. You should be doing the same if you can afford to do it. Investors who purchases stocks after major market declines tend to do much better than those who buy during booms. You hear me Warren Buffet?
When the market rises, everyone wants to buy stocks. People forget that you shouldn’t buy stocks when prices are high, you buy when the prices are low. Companies with plenty of cash are grabbing investment and real estate bargains that were hardly available a year ago. You should be doing the same if you can afford to do it. Investors who purchases stocks after major market declines tend to do much better than those who buy during booms. You hear me Warren Buffet?
4) Struggle makes us FOCUSED.
Although I tend to be a hardcore capitalist, a part of me misses the activism of the 1960s, when people cared about more than making a dollar. OK, I wasn’t around in the 1960s, but I’ve watched enough old movies. Going through tough times not only teaches one to pursue a higher purpose in life, it also leads individuals to more carefully scrutinize the state of affairs in our government. In fact, I dare to argue that the financial crisis was just what Barack Obama needed to secure his election over John McCain. Economic prosperity allows us the luxury of choosing our politicians based on silly issues, like gay marriage (as we did in 2004). When we are worried about putting food on the table, we look beyond the silliness and choose the most qualified and most intelligent person for the job (after ensuring that he knows Africa really is a continent). Finally, tough economic times make you more responsible in your own money management, as the threat of financial insecurity keeps us all on high alert.
Although I tend to be a hardcore capitalist, a part of me misses the activism of the 1960s, when people cared about more than making a dollar. OK, I wasn’t around in the 1960s, but I’ve watched enough old movies. Going through tough times not only teaches one to pursue a higher purpose in life, it also leads individuals to more carefully scrutinize the state of affairs in our government. In fact, I dare to argue that the financial crisis was just what Barack Obama needed to secure his election over John McCain. Economic prosperity allows us the luxury of choosing our politicians based on silly issues, like gay marriage (as we did in 2004). When we are worried about putting food on the table, we look beyond the silliness and choose the most qualified and most intelligent person for the job (after ensuring that he knows Africa really is a continent). Finally, tough economic times make you more responsible in your own money management, as the threat of financial insecurity keeps us all on high alert.
Those are my points, so again, please don’t kill the messenger. I certainly do not celebrate a weak economy, but I am a firm believer that focusing too much on the door that shuts keeps us from appreciating the ones that just opened. There’s always light at the end of the tunnel, a pot of gold at the end of every rainbow, and….well, you get the point. It’s the toughness of tough times that make the good times good. Keep hanging in there, it’ll be ok.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in ways that Feel Good.” For more information, please visit http://www.boycewatkins.com/.
Thursday, November 20, 2008
Wednesday, October 8, 2008
Dr Boyce Watkins: Fighting with Bill Collectors
One of the groups that was not bailed out during the recent financial crisis has been the American consumer. Congress took care of the firms on Wall Street, but they didn’t take care of the millions of Americans forced to confront the realities of bankruptcy, foreclosure and uncomfortable confrontations with menacing bill collectors. It appears, sadly, that every man and woman must find their own way through this financial tragedy.
Bill Collectors really want their money, like the rest of us. Some of them seem to feel that it’s O.K. to resort to flat out thuggish intimidation to get their money back. That might work on The Sopranos, but it shouldn't work in real life.
Part of the reason abusive bill collectors can have their way with the public is because many citizens do not know their rights. Bill collectors prey on the uninformed in a terrible way: They may threaten to have you arrested, harass your relatives, call all hours of the night, and engage in other types of atrocious behavior to get their money out of your hide.
One woman successfully sued a rogue bill collector after he called her repeatedly with threatening language. The woman, a senior citizen, was told by the man to "Stop with the sob stories and pay your god d*m bill!" This kind of behavior is not acceptable, and bill collector harassment doesn’t have to keep you up at night.
The Federal Trade Commission states that complaints against bill collectors are rising, reaching the highest level they've seen in the past 3 years. Most of the complaints focus on vulgar language, trying to collect more than the amount of the true debt, and extra fees, such as court costs.
You have rights that can protect you from bad and malicious bill collectors. You want to keep these in mind as you work yourself out of debt:
1) There is something called "The Fair Debt Collection Practices Act". If you are not familiar with this document, get familiar with it. You can read it by clicking here.
2) A bill collector cannot contact you at work if your employer does not approve of the contact. Let the bill collector know that this is the case and they must legally stop contacting you at your job.
3) Bill collectors cannot call you before 8 am or after 9 pm. The only exception is if you give them permission to do so.
4) A bill collector can only contact your friends and family if they are trying to find a way to get in touch with you. However, some of them may do this in order to harass or embarrass you. If that is the case, you may want to tell your friends to tell the bill collector, "She does not live here and I do not know how to get in touch with her. Please don't call here anymore." Then, get the bill collector's information from your friend and reach out to them when you can.
5) You can get bill collectors to stop contacting you altogether by sending them a letter telling them to stop. You still must pay the debt, but they won't be calling you during dinner.
6) The bill collector cannot curse at you or use foul language and they must tell the truth about how much you owe. They cannot threaten to sue unless they are serious about it, and they can't touch your 401k or IRA.
7) If the bill collectors call you, you can demand that they send you a written notice of the amount you owe and who you owe the money to. If you do not believe that the debt is yours, you can write a letter to them stating that this is not your debt. They must then send you proof that the debt is actually yours.
If you feel that a debt collector has violated any of these rules, you can contact the Federal Trade Commission at www.ftc.gov. Remember that you are not powerless in this situation.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of Financial Lovemaking 101: Merging Asset with Your Partner in Ways that Feel Good. He does regular commentary in national media, including CNN, CBS, NBC and BET. For more information, please visit www.BoyceWatkins.com. This information does not constitute legal advice. For legal advice, please consult your attorney.
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