Church, Government, Banks and the Poor
I recently had a conversation with a friend of mine who is African American, works at a very large bank in Los Angeles and who has a unique perspective on economics in this nation.
Editor
How has the church educated African Americans in terms of finance and personal finance? Has this in any way affected an average African American’s view of banks and the global banking system?
Friend
Sadly, many Af-Am church goers seem to accept economic conditions without questioning them too deeply. In many parts of the inner city, “hyphenated folks” have been experiencing a decades long recession beginning with America’s broad-scale de-industrialization shortly after the Civil Rights era. We’re on the front lines of any downturn. There remains a stubborn element of economic cynicism.
Many churches, (largely mega churches due to the fading prosperity movement), have offered education, seminars, and counseling on home purchasing, credit, and personal finance. The influence has been beneficial for many, if not instrumental in awareness and activity. Global finance, banking policy, and Wall Street remain afar from most Americans; this I say in my experience as investment consultant, working with everyone under the sun.
The black underclass and many members of the lower class distrust banks because of fees, check deposit availability, and collateralized lending. Sadly, check cashing offices outnumber banks in the ‘hood.
Editor
In your opinion, is the Federal and or State government doing anything to assist African Americans in developing their financial IQ? And is the distrust of banks justified?
Are you sure it is a matter of race and not of class? In Indiana, a very “white” state, check cashing institutions are as numerous as Peyton Manning jerseys. To me, it’s a matter of the sad state of the lower class’ economic IQ.
Friend
The federal and/or state governments aren’t taking any measure to promote financial literacy for ANYONE. The only individuals that possess any savvy are the ones have interest ($$$) or enough exposure to care. Rather than teaching Home-Economics, our educational system should teach personal finance……AF-Am’s trust of just about anything is justified. LOL!
Banks kept a share of unfair and unequal lending policies in practice for years; redlining, predatory lending. Even currently Af-Am’s check are more likely to be placed on hold when depositing! When Af-Am’s come into a branch for service, everyone dodges them!!!
Class is largely the issue. However, class also has a high correlation to race. Whites in the Midwest felt the ill effects of deindustrialization just as blacks did. Many working class constituents feel they do not possess enough money to keep in a bank or distrust their personal responsibility in keeping their account in positive standing. Honestly, I have co-workers that are reading personal finance books like the Holy Scriptures and inside I’m thinking: “Why??? Most of the advice given is for individuals far above their income level.” It ’s like playing monopoly without owning anything on the board.
Editor
At the same time though, poor blacks and whites (and even a fair amount of the middle class) have financial IQ’s so low that every time credit is thrown their way they jump at it. How many Americans understand that credit actually means debt? It’s the same as people who load up on junk food at McDonalds, but then hit the gym for 35 minutes (like me). While it’s sad they can’t stop eating the garbage, the workouts are probably what’s keeping their hearts from exploding. People might be missing the point with their personal finance worship, but I’d rather that effort be made than the wave of bankruptcies that have occurred in the last two decades.
Friend
Sadly Capitalism, as it has been conducted, has disenfranchised the American Worker, leaving inflation to eat away at wealth, and credit as the financial Anti-Savior. Credit is a crutch; it has been one that Americans have been leaning on right and left. What we just went through….scratch that….what we’re going through right now is the epitome of financial indiscretion. America became house flippers and turned dwelling places into commodities. 300% increases in some areas in terms of price……IN FIVE YEARS!!!! Can you really expect that to continue??? Now we’re all back-broken and cash strapped. The funny thing is somebody got paid by selling. Was it you? It definitely wasn’t me.
Editor
Then what’s the solution? How does America, specifically the working and lower classes, go from an overwhelming debt and no “real” upward mobility to a place of freedom?
Friend
They’ll need some support from our economic policy. We need a place for people to work; we can’t expect everyone to obtain a graduate degree. We need a small to mid-scale return to the manufacturing sector and the trades. Our Midwest can be revitalized with some “protectionism”. We need small businesses to be supported. We need families to remain intact. Discipline, discipline, discipline. e all need to reject the temporary thrill of spending money and make a serious commitment to paying off habitual debt. ( i.e. credit cards, medical bills, etc.) Americans need to relearn to cook and not spend $30/day eating out.
Editor
Who should take the lead here though? Governments trip all over themselves, and churches tend to be very hot and cold in leading anything economic. Conservatives will complain about protectionism and about government intervention in the economy. Democrats, specifically the liberal side, will complain about too much church intervention into the economy, especially if it’s aided by the government. I’m thinking churches can incorporation personal finance classes (the basics) to their members through government provided speakers (for free). The government could possibly create a program for American factory workers/supervisors, heading to Mexico, China, and other third world nations to act as ambassadors and consultants on safety and how the factory should run. On factory and manufacturing work though, I don’t know if we can seriously revive that industry without serious tariffs, which would relive the mistakes made after black Friday in 1929.
Friend
Its a all-hands-on-deck effort. It can’t be unbalanced. Conservatives are ill and democrats are sick……everyone wants results, but everyone wants their philosophy to provide the solution.
We need the church to preach the word:
“A good man showeth favor and lendeth; he will guide his affairs with discretion” “If thou lend money to any of My people who are poor among thee, thou shalt not be to him as a usurer, neither shalt thou lay upon him usury. “Ye shall not therefore oppress one another, but thou shalt fear thy God; for I am the LORD your God.”
We need the government to be the elected officials of the people and not corporations and industries. I feel that we can tilt the scale a bit to protect our workforce. One, by giving tax incentives to companies that employ Americans; two, by suspending some tax breaks for companies that outsource, or produce multinationally.
We, as individuals need to watch less T.V. and stop falling prey to the onslaught of advertisements and materialism that it projects. Credit shouldn’t be leverage, it should be a lifeline.
Good stuff, any thoughts from the readers?
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