BBA Economic Digest: We Are Better Than This
We are Better Than This
“The heart of the question is whether all Americans are to be afforded equal rights and equal opportunities, and whether we are going to treat our fellow Americans as we want to be treated. … One hundred years of delay have passed since President Lincoln freed the slaves, yet their heirs, their grandsons, are not fully free. They are not yet free from the bonds of injustice, they are not yet free from social and economic oppression. And this nation for all its hopes and all its boasts will not be fully free until all its citizens are free.” – President John F. Kennedy, June 3, 1963
"And for those who have been talking about protests, just remember, this country was founded on protest. It is called the American Revolution," he said. "And every step of progress in this country, every expansion of freedom, every expression of our deepest ideals, has been won through efforts that made the status quo uncomfortable. And we should all be thankful for folks who are willing in a peaceful, disciplined way to be out there making a difference." – President Barack Obama, June 3, 2020
"It remains a shocking failure that many African Americans, especially young African-American men, are harassed and threatened in their own country. It is a strength when protesters, protected by responsible law enforcement, march for a better future. This tragedy -- in a long series of similar tragedies -- raises a long overdue question: How do we end systemic racism in our society? The only way to see ourselves in a true light is to listen to the voices of so many who are hurting and grieving. Those who set out to silence those voices do not understand the meaning of America -- or how it becomes a better place." –President George W. Bush, June 2, 2020
"No one deserves to die the way George Floyd did. And the truth is, if you’re white in America, the chances are you won’t. That truth is what underlies the pain and the anger that so many are feeling and expressing—that the path of an entire life can be measured and devalued by the color of one’s skin. Fifty-seven years ago, Dr. King dreamed of a day when his “four little children would be judged not by the color of their skin, but by the content of their character.” Today, that dream seems even more out of reach, and we’ll never reach it if we keep treating people of color with the unspoken assumption that they’re less human." – President Bill Clinton, May 30, 2020
"As a white male of the South, I know all too well the impact of segregation and injustice to African Americans. As a politician, I felt a responsibility to bring equity to my state and our country. In my 1971 inaugural address as Georgia’s governor, I said: “The time for racial discrimination is over.” With great sorrow and disappointment, I repeat those words today, nearly five decades later. Dehumanizing people debases us all; humanity is beautifully and almost infinitely diverse. The bonds of our common humanity must overcome the divisiveness of our fears and prejudices…. We need a government as good as its people, and we are better than this." – President Jimmy Carter, June 3, 2020
What Have We Learned?
On January 29, 1943, Robert Hall was arrested at his home in Baker County, Georgia, charged with the theft of a tire. Three white police officers drove him to the county courthouse, where they pulled him from the squad car and beat him for nearly 30 minutes until he fell unconscious.
Hall was dragged through the street to a cell where he died. Four years later, a panel established by President Harry Truman, submitted a 178-page report, including Hall’s story, which spoke of America’s civil rights failings and “lawless police action.”
“Negroes have been shot, supposedly in self-defense, under circumstances indicating, at best, unsatisfactory police work in the handling of criminals, and, at worst, a callous willingness to kill,” the committee wrote.
Fast forward to July 12, 1967, John Smith, a black cab driver, was pulled over and badly beaten by the police in Newark, N.J., within sight of the residents of a large public housing project, sparking five days of riots that resulted in 26 deaths.
Smith’s story was included in a report the following year by the National Advisory Commission on Civil Disorders, also known as the Kerner Commission.The commission was charged with explaining what led to so called race riots in 159 cities.
Not surprisingly, it found the police had “come to symbolize white power, white racism, and white repression.” To its credit, the commission recommended investing billions in programs to alleviate housing segregation, and reforming the police, recommendations that were all but ignored.
Fast forward to March 3, 1991, when four white police officers beat Rodney King in the middle of the highway in Los Angeles, resulting in his skull being fractured. Video of the incident surfaced four days later.
In April, then-mayor Tom Bradley created the Christopher Commission to examine the practices of the LAPD. The commission found that a significant number of officers repetitively used excessive force against the public and persistently ignored the written guidelines of the department regarding force.
The following year, the four officers involved in King's beating were acquitted of assault. Five days of unrest followed, with more than 50 riot-related deaths — including 10 people who were shot and killed by LAPD officers and National Guardsmen. More than 2,000 people were injured, and nearly 6,000 arrested.
Fast forward to Nov. 15, 2018, the U.S. Commission on Civil Rights released a report entitled, “Police Use of Force: An Examination of Modern Policing Practices.” The report stated “the best available evidence reflects high rates of use of force nationally, and increased likelihood of police use of force against people of color …”
We've seen this movie before, played over and over again, marked by the same analysis, the same conclusions and the same recommendations, decade after decade.
What was said in 1947 by the President's Committee on Civil Rights, was essentially said by the Kerner Commission in 1968, the Christopher Commission in 1991 and the U.S. Commission on Civil Rights in 2018.
Quoting from the 1968 Kerner Commission report: "White society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it.”
Those words resonate today just as they did more than 50 years ago. The Kerner Commission warned of a nation fractured into two radically unequal societies—one black, one white.
In many ways, the economic gap between blacks and whites is still as wide in 2020 as it was in 1968. In the decades since, white wealth has soared while black wealth has stagnated.
In 1968, a typical middle-class black household had $6,674 in wealth compared with $70,786 for the typical middle-class white household, according to data from the historical Survey of Consumer Finances that has been adjusted for inflation. In 2016, the typical middle-class black household had $13,024 in wealth versus $149,703 for the median white household, an even larger gap in percentage terms.
“The historical data reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years," wrote economists Moritz Kuhn, Moritz Schularick and Ulrike I. Steins in their analysis of U.S. incomes and wealth since World War II.
“Everybody knows that people of color are at an incredible economic disadvantage, but few realize it’s as bad or worse than it was before Civil Rights,” Karen Petrou, managing partner of Federal Financial Analytics told The Washington Post. “Black Lives Matter has shown that we don’t have Selma Bridge anymore, but the situation today is profoundly troubling.”
As individuals, we seem to be increasingly tolerant. In 1969 only 17 percent of white Americans approved of black-white marriage. As of 2013 it was up to 84 percent.
And yet racism remains baked into our body politic, institutions, and business models.
If history teaches us anything, it is that when it comes to black civil rights, promised ever since Reconstruction, those in power often seek to create bodies to study problems rather than to solve them.
We saw it again this past week when the Business Roundtable, comprised of the nation's top CEOs heading companies, called for the creation of a committee to study the matter. Of the Fortune 500 CEOs, only four are black.
So, too, did Sen. Rob Portman, R-Ohio, who called for the formation of yet another national commission on race, just as President Lyndon Johnson did, which resulted in the previously mentioned Kerner Commission in 1968.
Little has changed in terms of the fundamental issues. America society in 1968 was plagued by bad policing, an biased justice system, unscrupulous consumer credit practices, poor or inadequate housing, high unemployment, voter suppression, and workplace discrimination.
In 1968, I was 14 years old, but even as a kid could sense the country in turmoil. I remember gathering around the television every evening with my parents to watch scenes of cities burning across America and of a little country on the other side of world, Vietnam, burning. It was where my brother was.
I distinctly remember the assassinations of Martin Luther King and Robert Kennedy and the Tet Offensive, which turned my parents against the war. I remember watching Chicago police beat protesters who came to gather outside the Democratic Party National Convention. It was later accurately termed "a police riot." Back then, as today, black people were trying to get white America to understand what was going on in black America due to systemic racism. They're still trying.
This past week saw a slew of big companies, CEOs, politicians, and non-profit organizations put out statements of support for the black community following the killing of George Floyd in police custody.
Showing deep concern and solidarity with the Black Lives Matter movement is nice, and commissions and committees can make all sorts of well-meaning recommendations. Recommendations are, after all just, words. They ring hollow if not acted upon. History shows they've largely not been acted upon.
“Lots of really eloquent and heartfelt statements which, without action, amount to the ‘thoughts and prayers’ we hear from our elected officials after gun violence. Nice but not particularly helpful,” an anonymous CEO told Fortune. “I’d be much more interested in hearing the actions that these executives and their organizations are taking to help make our country a safer place for black people.”
Because we have seen this movie before, many black people look at promises to do better askance.
Said Kareem Abdul-Jabbar in an interview with CNBC: “The black community is used to the institutional racism inherent in education, the justice system and jobs. And even though we do all the conventional things to raise public and political awareness — write articulate and insightful pieces in the Atlantic, explain the continued devastation on CNN, support candidates who promise change — the needle hardly budges.”
If the needle is to budge, it will require sustained action from federal, state and local governments. It will also require the business community to step up in ways they never have before.
To date, I am most impressed with those in Corporate America who are committing resources and hopefully for the long term -- Bank of America ($1 billion), Walmart ($100 million) stand out.
“This conversation’s got to be longer-term and more lasting,” Walmart Chief Executive Doug McMillon told CNBC. “When we have events like this, sometimes there’s a surge of energy and passion and emotion and people will give money, which again is good, but then we get distracted and we move on to something else and the lasting change doesn’t happen because we didn’t do the work to get through complexities.”
Attacking racism seems to be a daunting problem, one beyond the grasp of America to solve. But I am reminded of an old saying, "How do you eat an elephant? One bite at a time."
Said Morehouse College President David Thomas in an interview with CNBC on Friday: “The leaders of most organizations in our country are not prepared to lead the kind of conversation that needs to be taking place.”
I believe Dr. Thomas is right in his assessment. Many if not most white Americans shun talking about race and racism, fearful of revealing their profound ignorance. Saying "All Lives Matter," a mantra among some whites, reveals an unwillingness to learn and have a meaningful conversation.
“I think all of us would serve this issue if we can make friends with someone who doesn’t look like us. I think that is a key issue here, that too much of people’s humanity and their right to be a part of the American dream, that’s not recognized all the time, and that’s very unfortunate,” Abdul-Jabbar said.
David Robinson, an NBA Hall of Famer and now leading a $1.5 billion private equity firm, says education is key.
"Part of the challenge is to help people understand that this is not just happening now. It's bubbling to the surface more, but black people are aware of this all the time," Robinson said. "If you are not giving us a good education then what options do you have?" Robinson asked. "Black people are running a 400-meter race when everyone else is starting at the 200-meter line, It's all built into the system and that is not something that escapes us."
Even when the economy is good, black-owned small businesses often are more vulnerable financially than others, with smaller cash reserves to carry them through in tough times. One obvious and critical way to help them survive is to shop and eat at black-owned establishments.
If you're not sure which businesses are black-owned, there are directories. Check with your local black or African-American Chamber of Commerce.
"Now is the time for Americans to demonstrate they really appreciate inclusion. Spend money on less fortunate and disadvantaged businesses, where it can have an immediate impact. Be conscious where you're spending your money," said Kenneth Kelly, chairman of the National Bankers Association, a voice for minority banks aiming to help revitalize economies in underserved areas.
It is important that economic developers inform owners of small black businesses of grant or loans programs being made available from a state or local government or a private organization. Actually, I believe it is incumbent on economic developers to form such programs.
The Local Initiatives Support Corporation has an ongoing small business grant program open to anyone, but has a special interest in supporting minority owners who operate in underserved areas.
The National Business League, founded by Booker T. Washington in 1900, is about to go live with a digital platform for all black-owned businesses to find contracting opportunities, funding opportunities and private and public sector clients looking for suppliers.
The platform will launch on June 19, known as Juneteenth, which commemorates the ending of slavery. Economic developers should jump on this as an opportunity to serve their black small business community.
Increasing black home ownership is one substantial way to decrease the racial wealth gap between black and white America. Companies can donate to and economic development organizations can establish local programs with the National Association of Real Estate Brokers.
The trade group's realtors specialize in helping African Americans purchase properties, selling 20,000 homes to black purchasers in 2019 alone. Consider contributing to NAREB's "House Then The Car" program targeting black millennials, whose economic struggles and consumer behavior changes have fueled a record decline in black home ownership.
Economic developers can be having ongoing conversations with local banks and mortgage companies about better ways to increase black home ownership.
Companies need to do a better job of recruiting and retaining black leaders. A Stanford Graduate School of Business report on C-suite diversity at Fortune 100 companies found black professionals made up just 3 percent of the CEOs, 1 percent of the CFOs and 3 percent of the division leaders in 2020.
There are just four black Fortune 500 CEOs.In 2018, black professionals made up just 3.3 percent of all executive or senior leadership roles, according to the US Equal Employment Opportunity Commission.
Hiring more black executives is crucial for companies that want their leaders to better reflect the communities they serve. Kelly, the National Bankers Association board chairman, told CNN Business that companies sincere about combating systemic racism must make commitments that persist even when the issue is not national news.
“It must be a value system that they embody and not a temporary item that they use to check a box,” he said.
And therein lies my greatest fear -- that when this issue of white superiority, and that's exactly what we're talking about, dies down, when the protests stop and news coverage subsides, when the committees have turned in their reports, that things will revert to the way they were.
As a 65-year-old white man, who may have some insight by being married to an African-American woman, I see us all in one proverbial boat together. But we remain a nation divided, not that much different than in 1968.
Racism has limited the promise of America since the days of slavery. It has also limited our nation's capacity for economic growth by writing off people as being incapable or unworthy. My God, we are so much better than this.
Listen to the Fisk Jubilee Singers perform Wade in the Water