Rebuilding the American Economy from the Ground Up

In the midst of a financial crisis and a foreclosure crisis, it is difficult for Americans to take a moment, step back and look at the big picture. But that is what we must do to if we really wish to restore the country to economic health. Even if we effectively address the foreclosure and financial crises, another economic crisis will be waiting for us down the road because the fundamentals of the American economy are weak.

America has been competing in an increasingly global and integrated world economy—and losing badly. America’s losses can be measured by the wages of American men. Since the late 1970s, the wages of American men in the bottom 60 percent of the wage distribution have declined in inflation-adjusted dollars. Black wages are lower than average. So, if 60 percent of American males generally have seen declining wages then more than 60 percent of black male wages have declined. These losses are the result of the American economy shedding high-wage jobs due to global competition.

From the 1940s through the 1960s, male wages increased and American living standards followed these increases. Since the 1970s, living standards have increased largely because American women have worked more and at better jobs. But overtime, more and more American households have reached the limit of income gains from women’s work. For these households, the next means of increasing income was to go into debt.

In recent years, the American economy has been growing not on American earnings, but on American debt. In the report Borrowing to Make Ends Meet, Jose Garcia of the Dëmos think tank states that “between 1989 and 2006, Americans’ overall credit card debt grew by 315 percent from $211 billion to $876 billion (2006 dollars).” Also, “from 2001 to 2006, homeowners cashed out $1.2 trillion in home equity, often in an effort to cope with mounting credit card debt and to cover basic living expenses (2006 dollars).” The financial and foreclosure crises ultimately are the result an American economy built on debt—debt absent of the growing incomes needed to repay loans.

We need an American economy where the earnings of average workers—male and female—increase enough so that Americans can pay off their debt and save. This means we need a strategy for competing in the global economy. We cannot continue to simply watch high-wage jobs disappear without having a plan to replace them.

There are many things that we need to do. We need fair trade agreements, not free trade agreements. We need labor and tax policies that aid average American workers, not just CEOs and major shareholders. We need to make repairs and improvements to America’s infrastructure so that it can support a growing economy. We need to improve our educational system especially as it serves black and Hispanic students. We need a health care system that is as inexpensive and as good as our European competitors. These policies just level the playing field for the United States with its global competitors.

Additionally, we need a national economic strategy and a “coach” for the American economy. In other words, we need political leaders who will see that business leaders build an economy to meet tomorrow’s challenges and not only to make a quick buck today. The key example of this failure was when the American auto industry decided to settle with building gas-guzzling SUVS and trucks while the Asian auto industry invested in developing hybrid technology. There was no reason why the U.S. auto industry was not out in front on hybrid technology.

All the signs are that the energy future is clean and green, but once again the United States is lagging. We still have political leaders who get excited about drilling for oil—yesterday’s energy—when they should be devising a plan for how we will compete with Germany, Spain and Denmark in clean and green energy production. There a lots of opportunities for the United States to develop high-wage jobs manufacturing products for the world’s future needs, but we are not taking advantage of them.

We can fix the financial crisis and the foreclosure crisis, but that will still leave us with a country with a broken economic engine. Male wages are declining and household debt is increasing. We cannot have a growing economy when each year the average household has less and less real income to spend.

The Republican Party’s Race Problem

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

Purchase Getting It Wrong: How Black Public Intellectuals
Are Failing Black America by Algernon Austin
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The Republic Party has a big problem. The current election has reinforced the idea that the Republican Party is a party of racially prejudiced white people. The country is becoming increasingly non-white. The Census Bureau estimates that by 2042, the nation will be majority non-white. The McCain-Palin campaign has stoked animosity to the Republican Party among non-whites. Even if John McCain and Sarah Palin were able to win the election, the Republican Party would still appear to be on the wrong side of history.

With Barack Obama as the Democratic nominee, this would have been a difficult year for the Republican Party among non-whites regardless. Obama is a charismatic, centrist, "post-racial" politician. Exactly the type that or person who could peel away the votes and support of Hispanic, black and Asian independents and conservatives from the Republican Party. It is not suprising that the Republican convention was the whitest one in recent history, because Obama was able to secure strong non-white support.

The Joint Center for Political and Economic Studies found that the Republican convention had "the lowest black representation in 40 years" due to "Senator Obama's historic candidacy, the deep and genuine enthusiasm for him in the black community, and Senator McCain’s association with President Bush, an exceptionally unpopular figure among African Americans."

Instead of running a high-minded campaign, the McCain-Palin ticket has resorted to playing with racism and xenophobia in an effort to excite its conservative base. It has also made baseless charges of voter fraud against an organization that registers primarily poor and non-white people. It has challenged other policies and officials in what looks like an effort to suppress or disqualify the votes of primarily poor and non-white people.

Since whites are still a large majority of the population and are more likely than non-whites to be registered to vote, a political campaign based on securing white votes only can still win. But the overall demographic and political trends make this a losing strategy over the long term.

The Republican Party can recover from these strong negatives with non-white voters. It is not the first time that the Party has played on racial prejudices to win votes. If the Party makes a concerted effort immediately after the election for several years, it can once again make inroads in minority communities. The question is will the leadership of the Party recognize its race problem and act to address it. Or will the reactionary forces, keep control of the Party and continue to pursue a strategy based on reinforcing prejudice against people of color.


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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.

What Does Obama’s Post-Racialism Mean for Black America?

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

Purchase Getting It Wrong: How Black Public Intellectuals
Are Failing Black America by Algernon Austin
Barnes & Noble.com Amazon.com
________________________________________________________________________


The Obama campaign has treated “race” and “blacks” as words best not mentioned in polite company. Even when it would have been natural or expected for Obama to discuss race or the needs of black communities, he has sidestepped the issue. The most blacks received were occasional lectures about personal responsibility which could have been uttered by Bill Cosby or Bill O’Reilly.

Only when cornered by opponents’ references to Reverend Jeremiah Wright did Obama speak seriously of racial discrimination. Even then, all of the issues Wright raised were treated as issues from the past that had no relevance for today. On the other hand, Obama has made passing references to gender-based discrimination as something existing today.

This strategy is very smart for trying to get a black man elected. Obama has to navigate two minefields to win. He has to deal with conscious and overt anti-blackness as well as subconscious anti-black bias. A recent study has suggested that about a third of Democrats have some degree of overt anti-black attitudes. About 50 percent of Americans have subconscious anti-black attitudes. These individuals think that they are free of racial prejudice, but in specific instances they behave with anti-black bias. Also, white Americans are more likely to subconsciously associate blacks with being non-American. These conscious and subconscious attitudes make one less likely to support Obama.

To win, the Obama campaign has avoided anything that could make Obama seem like a candidate concerned about black people. The stronger Obama’s association with black people and black issues, the more likely he would trigger conscious and subconscious anti-black attitudes in the American electorate and lose the election. Thus, the Obama campaign has treated race like superman deals with kryptonite. The further away from the topic Obama stays the better his political health. This means that, ironically, because of anti-black prejudice in American society, Obama has to pretend that there is no anti-black prejudice, if he wishes to win.

This strategy took Obama far, but it did not seem to be enough. A month ago, it seemed like a significant portion of Democrats were still more swayed by anti-blackness than by their political beliefs. Only about 70 percent of Democrats supported Obama while 85 percent of Republicans supported McCain. Apparently, it took the most severe economic crisis since the Great Depression and missteps by the McCain campaign to finally produce a commanding lead for the Obama campaign.

Assuming that Obama wins, what does this post-racial stategy mean for blacks? Ironically, a black president automatically presents significant obstacles for addressing the needs of black communities. If elected, Obama will surely wish to be re-elected. This means that he has to continue with post-racialist politics. The best blacks can hope for is a few more “Cosby” speeches. Also, the highly-organized Republican attack machine will look for any opportunity stroke anti-black attitudes and racial fears in the American public. Any overtly racial policies will be condemned by the right-wing pitbulls. In other words, race will continue to be kryptonite.

People concerned about racial justice and justice specifically for blacks will need to be at least as organized and effective as the right-wing, if they hope to see any race-specific progress under an Obama administration. The bad news is that this is not likely to happen. The good news is that Obama’s centrist Democratic policies will still be far better for blacks than the policies of George W. Bush or of a president John McCain.


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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.

Is Black America Too Important to Fail?

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

Purchase Getting It Wrong: How Black Public Intellectuals
Are Failing Black America by Algernon Austin
Barnes & Noble.com Amazon.com
________________________________________________________________________


“I’m still waiting for my 40 acres and a mule,” my friend said as we talked about the $700 billion bailout of Wall Street. We both worried that once again black America would not receive the full economic assistance that it needs. While the nation’s attention has been drawn to the economic crisis generally, there seems to be little attention to the even worse economic news for black communities. Since no one is paying attention, my friend and I had little hope that black communities facing more extreme troubles would benefit from direct aid anytime soon.

On many measures, it is clear that blacks are being hit the hardest by the declining American economy. The Joint Center for Political and Economic Studies had already informed us that blacks and Hispanics were about twice as likely as whites to receive a subprime loan. This fact would lead one to think that blacks would have about twice the foreclosure rate as whites. If that were true, that would be bad enough. But a new report by AARP [PDF] finds that blacks and Hispanics have foreclosure rates about three times that of whites.

Last August, the black unemployment rate was 7.7 percent. That is a low rate—for blacks. In the past 10 years the white unemployment rate never rose beyond 5.5 percent. This August the black unemployment rate reached 10.6 percent. In September, the black unemployment rate increased again, to 11.4 percent. The white unemployment rate was 5.4 percent in August, and it stayed at 5.4 percent in September. America’s past nine months of declining jobs have had a greater negative affect on black communities than on white communities.

Since 2000, the white family poverty rate is up 0.5 percentage points. The black family poverty rate has risen 2.8 percentage points. For white children, the poverty rate is up 1.0 percentage point; for black children, 3.3 points. The most startling rise is for black families headed by an unmarried male—yes, male. These families have experienced an increase in their poverty rate of 9.4 percentage points. White single males heading a family have only seen a 1.1 percentage point increase in their poverty rate. Americans of all races are hurting, but the level of economic pain is above average in many black communities.

Washington D.C., my hometown, is a good bellwether for black communities generally. The city is majority black, and it has a sizable poor black population. The Washington Post reports that the percent of people receiving food stamps in the District is up 9.2 percent from July 2007 to July this year.

Now that the Wall Street bailout has passed, the issue for blacks to be especially concerned about is that fiscal conservatives of both political parties will use the immediate cost of the bailout as a justification to cut programs that directly benefit average Americans. The argument will be that we cannot afford program X or spending Y because we are $700 billion dollars deeper in debt. This argument is not acceptable.

We still need to effectively address the foreclosure crisis, and we still need economic stimulus policies that will help pull the country out of the current economic recession. Economic growth is ultimately necessary for the country to regain financial stability. Economic growth that reaches black communities is desperately needed.

For a very long time black communities have needed investments, job creation and economic development. The government finds money for bridges to nowhere, missile defense shields of dubious effectiveness, ill-advised wars, Wall Street bailouts and everything else deemed too important to fail. When will our leaders decide that black communities are too important to fail economically?



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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.