Income and Untenable Choices

Problems confronting the economically ill-informed is not an absence of money, but the manner in which money in their possession is utilized.  Pervasive challenges germane to income, wealth, savings, net worth, debt, credit and investments is self-inflicted and curable. African Americans have no plausible reason to look to extraneous sources to resolve their financial challenges. Economic deprivation for an economic minority is predominantly self-engineered and can only be cured from internal action with practical spiritual input.

Some fifty years ago, there were two major ethnic groups in America: African Americans and Caucasians. African Americans received no measureable economic consideration to boost their economic standing such as access to capital and contracts to develop viable business enterprises.  Based upon the 2013 US Census as reported by Atlantic in September 16, 2014, there are four major ethnic groups in America competing for a piece of the economic pie. Asians are at the apex of the economic strata with a median per annum household income at $67,065; whites at $58,270; Hispanics at $40,963 and Blacks at some $34,500.  These figures have to be tempered by factors such as age, education, length of employment, skill sets and training that exist for each racial group.

The established order of the American economic system has not been affable to Black and Brown Americans. As the economy continues to expand stake, for disenfranchised groups, it continues to dwindle. A multitude of reasons exist for this condition but, in most instances, where pain and agony are self-inflicted, it’s difficult to be remediated. Initially, one must consider marketing strategies employed by the rich and super rich to convince buyers to give up their money.

Every moment of the day, market strategists for the rich are employing tactics to influence buyer behavior. Paradoxical as it may seem, strategies employed by an economic majority are viable when it comes to an economic minority spending the money they don’t have, acquiring items they don’t need and attempting to impress people that don’t have their best interest at heart. Blacks and Hispanics/Latinos will labor at a task for some thirty to forty years, meeting demands of their employer religiously, never miss receiving a paycheck, but expend all their earnings supporting someone else’s economy at peril of their own. 

Building a Market System

Doing business with Blacks requires an inordinate effort, but it’s a must if African Americans are to climb the ladder economically through saving, investing and wealth building. Currently, the buying power of the economically uninformed African American is typified by buying the most tantalizing beverages to alter their mental perspective, driving most extravagant automobiles which they can ill maintain or afford, wearing the latest designer clothing or attire branding names they can’t spell or pronounce and acquiring practically every non appreciable item in their scope.

Saving ten percent of gross earnings for more challenging times rarely comes to their mind; expending money with their ‘own kind’ appears to be immoral; buying real estate, stocks bonds and debentures and investing in 401 k plans will alway come next year. Unfortunately, next year never reaches fruition. Sometimes this can be attributed to death, disease, divorce, downsizing, accumulated debt or some other unforeseen calamity that impacts each person.

Economic promiscuity, however, is not only committed by the uneducated or untrained; it is more profusely displayed by educated and trained professionals because they command higher salaries to be expended recklessly. Learning to save, invest and develop wealth has been and continues to be a concept that escapes the grasp of Black and Brown people. As a result of secondary treatment in America, Blacks have not been able to develop a formal economy as other ethnic groups and this has unequivocally thwarted their spending, wealth building and growth.
  
Perhaps, one crucial factor omitted from the financial portfolio of the economically mis-educated is financial support to political candidates who reflect their value system. In an economic system that entails political, social, legal, labor, cultural, capital and productive markets in a geographic area interwoven to dictate supply and demand with two parties negotiating in their own best interest, price and profit have escaped most Black Americans. This has resulted in Blacks not understanding the legal and social environment of business which creates a panhandling mentality and minimal self-esteem. Absence of money, love and a healthy perspective in the midst of abundance can be self-destructive

One of the best methods for individuals to create wealth is with two incomes from a socioeconomic union called marriage and acquiring an owner occupied residence. But, this is often thwarted because the poor credit history of one or both parties actually increases risk.  Prior to embracing vowels of matrimony, interested parties should perform due diligence to ascertain credit worthiness and health history of their potential partner.

A FICO score of 650 is tolerable, but 750-800 is better to get best interest rates. “Trust, but verify” for domestic tranquility of each. If this action were taken in a more deliberate manner, divorce rates could be down substantially from 50% rate. Ascertain as much information as possible about your future mate before you take vowels of matrimony because courtship permits much more flexibility before marriage than after marriage. Entering into a union with a person that is a compulsive spender, gambler or infected with some adverse disease does not create most joyous way for one to spend their life.

Government Politics Economics and Education

Democracy, which is the form of government prevalent in America, boasts of rules emanating from the people, by the people and for the people. In this regard, the populace elects people by voting and, logically, they vote for people that represent their views, values and interest. Votes are tallied and individuals with highest number of votes are victorious. These individuals are permitted to promulgate laws and regulations to govern a populace. One fallacy with this methodology is that when enacted, there was no credible evidence Black, Brown and Indian people were available for their voices to be heard and opinions weighed, and subsequently, they were not considered and historically have been unintentionally ignored.

This kind of oblivious behavior has transpired from inception to fruition and is the foundation for much of the friction that exists in society between have and have not’s. Individuals that are elected for political office often time perform acts or deeds to assist friends, colleagues or associates that enabled them to ascend to an elected position. From a politico economic perspective, their friends, colleagues, constituents and associates have initial access to employment opportunities, to sit on boards, committees or commissions to determine a particular issue. In most instances they or their friends are well compensated for their services.

They are granted initial access to employment opportunities and contracts that are being negotiated or awarded for goods and services. When land was being subdivided and doled out to colleges and universities for agriculture and to develop transportation routes through railroads, Black and Brown people were not included.  As the country was being developed and the world was beginning to create a demand for extracts from sugarcane and garments from cotton, government handouts failed to include people of color.

Once it was ascertained by enterprise operators that land was essential to production and production required labor, only then was there a concerted effort to find someone to perform this labor freely and efficiently. This was done through slave trade being imported to America. Indians already occupied America and had site control, but they were too rebellious, warlike and refused to submit to oppressive elements of slavery. Bureau of Indian Affairs, a three billion dollar entity under the US Department of Interior, exist to provide and maintain health education and welfare to compensate Indians for land owned by Indians but under US jurisdiction.  American land owners were aware that in order for profits from land to reach fruition, labor capital, machinery and equipment were essential to this process.

Blacks, through slavery, were compelled to work on land without compensation for their labor. They were maintained in shanties on land for all of their natural lives and never had an opportunity to develop a life of their own. Slave masters were in supreme control the lives, health, safety, education or general welfare of slaves. This kind of treatment by slave master regarding Blacks and land compelled Blacks to develop a disdain for land, because they were compelled to work on land for slave masters. Blacks took a mass migration north in an effort to get away from plantation life because it represented from compulsive labor.

Colleges and universities provided research and development for manufacturing products from textiles, cotton, sugarcane, and timber for slave maters. These institutions have been fortunate enough to garner monumental remunerations from slavery and currently enjoy the luxury of huge endowments for program operation. In contemporary society, the process of developing a product or services and enabling that product to gain and maintain market dominance, land, labor, capital, debt, cash equity and coordination are compulsive ingredients. Subsequent to Blacks being deprived of an opportunity to develop a product for any conceivable benefit, they never learned facets of business development and how various forces of production are interrelated. Economic benefits that have been accrued and which continue to enhance rich and super rich from this kind of treatment is difficult to overcome.

Blacks have historically been denied an opportunity to embrace the most elementary mode of production relative to owning land, not to mention land with improvements thereon in the form of a house or building. Land ownership is a very rudimentary form of wealth creation. And, considering the historical degradation of blacks germane to land and being compelled to work for slave masters, land is an evil product. Being void of land, Blacks are void of capacity to comprehend elementary roots of wealth building. This commences with saving, investing, sacrificing, and doing business with people you know, look like you, and reflect your values and trust.

Expending money on junk items produced by rich and super rich provide Blacks with a psychological frame work of buying freedom from their master. During the period Blacks were enslaved, freedom was most prominent item on their mind. Freedom does not have to be purchased because it has already been granted, but the psychological devastation from effects of slavery has left an innate psychological impairment that thwarts economic salvation of poor Blacks, in particular, and impoverished people in general.  Buying freedom from slave masters was illusory during slavery just as buying frivolous items that have no appreciable value will gain freedom or acceptance for Blacks today.

Velocity of a Dollar

It has been purported that money turns over several times before it departs an Anglo, Jewish or Asian community. These groups are very adroit at controlling their dollars to enhance profitability for members of their group who own and operate businesses or provide services. An employee is paid wages to acquire goods and services from their own ethnic or cultural group such as octane, food, clothing, vehicles, etc. Such commercial behavior enables businesses to realize profits from transactions, contribute to their charitable organizations, and simultaneously provide employment opportunities for family, friends and associates. This also creates an environment in which businesses eventually grow. What may start out as a mom and pop business can grow into a multi-billion dollar conglomerate such as Walmart or Federal Express.  Failure to circulate dollars within your own ethnic group over an extended period of time depletes a people and community of viable resources necessary for growth and development.

When an ethnic community cannot support itself, individuals turn to governmental resources for assistance.  Here they are compelled to pass an exhaustive means test and become labeled as shiftless or lazy.  It is inconceivable to  define an individual or group as  lazy and shiftless while being compelled to work 18 hours per day, seven days a week without just compensation  food, clothing shelter transportation or health care.  It is also paradoxical to talk about social welfare to individuals without addressing corporate welfare accrued to friends and associates of an economic majority or the politically privileged.  While these conditions are prevalent, it does not justify behavior of an economic minority to allow themselves to be used as an economic door mat, exonerate themselves from spending money among each other or to protect their economic future.

Individuals who are economically depleted after being extended an opportunity to gain and maintain income from labor over a period of years have a tendency to seek acceptance or freedom from purchasing frivolous items. Impoverished people give money to merchants for goods and services that have no meaningful value to them other than allowing them to feel good or be recognized as a status symbol. They spend money to support family members who encounter continuous economic hardships. When an economic minority does not expend funds with their own people or in their own neighborhoods, this adversely impacts the velocity of a dollar.

Culture Revenue Centers

Blacks have a respectable real median household income of $34,598, Hispanics median income is $40,963, white’s median income is $58,270 and Asians median household income is $67,065 pursuant to report released by U S Census Bureau for 2013. This income base affords Black ethnic groups an opportunity to build culture revenue centers and a market based economy pursuant to venues where goods and services are produced and distributed void of obstruction and interference from others. This market place could  result from a set of processes and procedures that embrace culture, values, education, capital, political history, social organization, legal systems and natural resources prevalent to regulating price and production of goods and services pursuant to demand.

To be continued…..
By F. Eugene Mayo       
The author is a Real Estate Agent and Broker in Texas.