Jared A. Ball (2020)
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Preface
Page vii: This book indeed demonstrates Black buying power to be a concoction of a business and marketing class and propelled by a media force capable of evolving the myth to axiom. However, this book can also be read as a case study of our media environment, that of the United States, or an investigation into the political and social function of that media nationally, including their specific relationship to African America.
Page viii: What the book argues is that an initial concept of buying power developed by the US government and business elite to manage labor and product costs, as well as the social unrest which often accompanies increases in inequality, was taken by a mid-twentieth-century emerging Black business and media class and turned into marketing tools to procure more corporate advertising dollars for Black-owned and Black-targeted media.
Page viii: From there the myth has been propelled for decades by an implicit agreement primarily between a White and Black business class whose interests merge in this instance to project a Black material reality which has never existed.
Page viii: The popular claims that if Black people would spend differently the collective would be better off are the result of propagated myths which deny the role public policy plays in determining societal outcomes. Instead, resulting from the myth is a tendency to ignore policy in favor of personal or community financial habits. The underlying perniciousness of the claim then, specific in its application to Black America, is that poverty or inequality at all is the result of bad decision-making among the poor. With the least powerful then blamed for their own poverty little attention need be paid to the more difficult struggles around public policy which are truly what determine the financial success of any community or group.
Page viii: For example, public policy, laws, regulations, and so on determine what immigrant communities are given government incentives to develop businesses throughout the United States, incentives not afforded to Black Americans. However, rather than the more easily and popularly repeated condemnations of or negative comparisons to various groups of Asians, Jews, Arabs, Latin Americans, and so on, more appropriate focus would be the policies which support these populations working endlessly in small corner stores, restaurants, cleaners, and so on, to support many more unseen and from countries where there is as much or more inequality.
Chapter 1: Introduction
Page 1: Introduction Abstract Buying power as economic mythology developed within a broader effort to impose Black Capitalism as an alternative to political or social equality and citizenship.
Page 2: Interestingly, Jay-Z was born the day Chicago Black Panther Party members Fred Hampton and Mark Clark were killed. December 4, 1969 marks both the birth of one of the greatest rappers and entrepreneurs in history and the death of two members of one of history's most impactful political organizations; with Hampton targeted specifically for assassination in a coordinated effort led by the Federal Bureau of Investigation (FBI) and the Chicago Police Department.
Page 3: The crux of Ofari's argument in the end remains a centerpiece of what follows here; Black people do not have enough money or access to larger national and global economies to have what wealth does exist among Black people to in any meaningful way improve the material, economic, and lived conditions of the Black community as a whole.
Page 5: Like much of Jay's entire career catalog this more recent contribution, from one who reminds is "… not a businessman," but a "business, man…," suggests an economic potential which is only left unreached due to ignorance among the community, and reflects back a popularly disseminated fallacy that the poor, specifically the Black poor, do not take advantage of opportunities as others have. Jews, according to Jay, unlike Black people, "own all of the property in America" because of their ability to rise above petty dealings, "'gram holding," and understand the value of not "throwin' away money at a strip club." But this is just one more example of popularly circulating mythologies about North American capitalism, race, religion, ethnicity, and specifically, buying power, or consumption, as a pathway to either poverty or wealth, and the potential for Black Americans to mimic those patterns of behavior with similar degrees of success.
Page 6: Consumerism, spending habits, good or bad, do not determine collective wealth or an economic strength. No community becomes rich, nor can one become poor, as a result of their spending.
Page 6: Black people are not poor for having missed out on previous opportunities, or by choosing today, out of some form of cultural deformity, or intractable financial illiteracy, to, as Jay-Z suggests, foolishly give away potential communal wealth by shopping. Jay-Z, like most commercial artists and art, reflects a racial and class politics often masked by talent and performance. The art becomes an extension of the commercial, political, and ideological market(ing) forces who own the media product (often not the artists themselves) along with its means of production and distribution.
Page 6: Specifically, The Myth and Propaganda of Black Buying Power demonstrates • The claim that African America has roughly $1 trillion in "buying power" is popularly repeated mythology with no basis in sound economic logic or data.
Page 7: "Buying Power" is a marketing phrase that refers only to the "power" of consumers to purchase what are strictly available goods and is used as a measurement for corporations to better market their products.
Page 7: The myth of "buying power" functions as propaganda working to deny the reality of structural, intentional and necessary economic inequality required to maintain society as it is, one that benefits an increasingly decreasing number of people. To do this the myth functions to falsely blame the poor for being poor. Poverty, the myth encourages, is the result of the poor having little to no "financial literacy," or as resulting from their bad spending habits, when in reality poverty is an intended result of an economic and social system.
The suggestion that Black people lack "financial literacy" and, therefore, ignorantly refuse existing opportunities to advance economically obliterates the realities of capitalism as an economic and social system or conditions that system creates.
Page 8: Black America does not have an annual $1+ trillion that is collectively, by some choice, spent frivolously rather than harnessed to the betterment of the collective. Here we must develop upon the difference between power as economic strength as is conventionally understood and buying power, a concept developed by business, advertising, marketing, and government interests and where power is defined only as a group's ability to enrich those interests.
Genuine economic strength is measured in wealth, assets, land, stock, etc. and with a clarity in the differences between wealth and income, the latter being what one earns in exchange for labor, the former being income earned from the labor of others.
Chapter 2: Propaganda Versus Economics: Constructing a Myth
Page 13: Power, in the phrase buying power, is not what economists consider when assessing the economic health of a group or country. Buying power is not wealth, it cannot be invested at will and used to create more for its investors. Buying power is not stocks, bonds, or land, and is not even real estate, it cannot be built upon, renovated, or flipped. Buying power is not income, it is not earned in exchange for labor and it cannot be spent at will or used to pay one bill versus another. Buying power has its origins in government labor statistics meant to help assess where wages should be set relative to inflation but is now, today, mostly a phrase created and propagated by marketers in an attempt to assist the business community govern its advertising revenue.
Page 14: It is primarily through the practice of popular journalism and commentary that allows the word power, in the phrase buying power, to lose all meaning. The term "power" is redefined to mean shopping but works to confuse potentially powerful communities and energies into what advertisers want most which are consumers whose acts of generating wealth for others is magically redefined into a concept of individual and collective political, economic, or social power.
Page 15: The second reason for so heavily propagating the myth, far more popular, and far more mythological, is as a means of collective uplift or empowerment. Buying power largely then becomes a way for contemporary leadership or punditry to rebrand particular, and more conservative traditions of Black political struggle absent meaningful examination of the histories of these claims, their shortcomings, or criticism.
Page 18: New media technology such as smart phones and tablets, along with websites, personal web video channels, and the existence of various social media outlets often confuse the issue but it remains that our media environment is one largely constructed and run by the most elite corporations and private equity groups the world has ever seen.
Internet media are still delivered by a handful of corporate owners and these owners are themselves directly or indirectly, via interlocking boards of directors, politics, race, gender, and class bias, linked assuring that what we see, read and hear, even in the new media age in which we find ourselves, is carefully manicured.
Page 19: Similarly, further complicating the matter, so much of what is often dismissed as "entertainment" is itself the product of US intelligence agencies and public relations meaning that even our favorite television shows are often dramatized (or comedic) ideological, political advertising delivered between more overt commercial marketing.
Chapter 3: Buying Power Not Protest: The Myth Prevents Unrest
Page 23: It is a fascinating paradox that buying power as a concept originates in late nineteenth century tensions between US workers wanting to compel honest and accurate government assessment of their conditions, and government wanting to use that research to alleviate those concerns in an effort to prevent rebellion. Workers wanted proof of the actual value of their earnings to show whether they were indeed earning a wage commensurate with the value of what their labor produced and assurance that those wages could increasingly keep up with (if not surpass) the rising costs of goods and other services.
Working people wanted evidence that their incomes were enough to survive, if not advance, in a growing and changing national economy.
Page 24: Today, the concept of buying power is largely used against an advancing working-class consciousness with an effect that is primarily to falsely convince audiences of an economic reality which simply does not exist.
Rather than informing, in this case Black people of their actual condition relative to the economy, the actual value of money earned, and what that money can or cannot do within the national economy, buying power is used to weaken understanding while promoting a non-existent [economic] strength.
Page 25: From the start purchasing (buying) power has been meant as a measurement of what workers could buy and a measurement by which leaders of business and government could work in unison to assure that workers' wages were low enough to assure maximum profit for ownership while sufficient enough to buy what was produced.
Page 25: Keeping as low as possible the gap between what workers were paid and what that money can actually afford was seen from the start as essential to balancing inherent tensions between capital's desire to replicate itself as wealth for a tiny few and the work required from a largely impoverished and powerless class of working people to produce that wealth.
Page 25: From the start, the politics and methodology behind the development of purchasing power claims was challenged. However, today they are taken as rote, unquestioned, and even inherent to any process of advancing the economic, political, and social conditions of, at least one segment of, oppressed communities.
Page 26: The precedent of promoting an entrepreneurial class consciousness took new form with a previously unprecedented Black-owned and Blacktargeting media as a driving force. Rather than supporting calls from among Black political movements for radical redistribution of an existing tremendous national wealth, power was redefined away from political power, and redistribution, and toward consumption.
Page 27: For example, the singularly influential Black media owner John H. Johnson, famously of Ebony and Jet magazines, took to promoting what would one day be the form of Black power rebranded by Richard Nixon as entrepreneurialism and consumption and helped develop an approach to capturing Black consumers which remains dominant today. Johnson produced The Secret of Selling the Negro, a brilliant marketing video which, in 1954, launched an updated approach to the Black business tradition of political struggle, one focused on economics, and not politics, and with an emphasis on attracting White corporate advertising money.
Page 29: The Johnson media product meant, again, only to wed White corporations and advertisers with Black consumers, concretizes beautifully how the myth of Black buying power was developed and how it has been particularly deployed targeting Black audiences. The title is itself wonderfully explanatory. The secret was to convince White advertisers to spend money in Black/Johnson-owned media spaces, then also to convince both Black and White America that such myth promulgation would be the requisite solution to increasing material inequality. And finally, the film's secret was to convince Black people themselves that consumption is itself power or is a pathway to power.
Page 30: The wreckage of the second world war left the United States as the single dominant world power and Black people looking for a new role within that new world arrangement were confronted in part by new national messaging. The propaganda developed in the post-war era was itself repurposed psychological warfare meant as the communicative parallel to the economic shift in the country from military production to civilian consumption. And the exact same methods were used.
The great Allied campaign to celebrate (or sell) Democracy, etc., was a venture so successful, and, it seemed, so noble, that it suddenly legitimized such propagandists, who, once the war had ended, went right to work massaging or exciting various publics on behalf of entities like General Motors, Procter & Gamble, John D. Rockefeller, General Electric.
Page 30: For instance, Edward Bernays, who rebranded propaganda as public relations after World War II to divorce the latter from its connection via the war to Nazi Germany, was fast developing a post-war method of rebranding the concepts of capitalism and democracy as being inextricably linked. His position as a leading corporate marketer, and nephew to Sigmund Freud, situated him perfectly as one interested in his uncle's study of mass psychology to use that research to manipulate people into becoming good consumers, read: perpetually unhappy and unfulfilled.
Page 30: Bernays understood the power of public opinion and that it should be those who made him rich for promoting theirs who should wield such power. He also understood the need to target emotion, not logic, to get best results. The creation of citizen-consumers required his post-WWII work of conceptually collapsing into one, capitalism-democracy. Once capitalism as an idea was wedded forever to democracy. The new arrangement meant consumption would not only bring the promise of self-fulfillment but would become an implicit expression of patriotism and freedom. Shopping meant being free and being free meant shopping.
Page 31: Bernays understood the true meaning of buying power. Without the use of the phrase itself Bernays recognized that the role of the majority was to be ruled by an elite few whose power would be administered through messaging, and in this case, specifically targeted with militarily precise advertising designed to ease the transfer of money upward and outward. Propaganda, he argued, should be incorporated into every facet of society, from education, to politics, arts, sciences, to social service. The more freedom democracy promised the more propaganda was necessary to assure that freedom be defined along carefully prescribed parameters.
Page 32: As concerns pertained to post-war American capitalism media would need to play another role in helping expand the segmented category of "consumer" to include nearly everyone. As WWII ended the infrastructure which had been developed to produce materials for war were, rather than demolished, reconfigured to produce civilian goods for which there would need to be people able to buy them.
Page 33: Cold War procedures for handling traditional colonies, dissident populations, enemy combatants, and terrorist insurgents were applied domestically to Black America. This was done in part to create consumers but also largely out of fears that historical and persistent abuse might sway Black America toward rebellion and specifically toward a globally spreading communism. Surveillance, incarceration, infiltration of organizations, character assassination, marketing, and manipulation of popular image all were developed specifically for Black audiences/targets.
Page 33: Truman's concerns about the potential depressive effects of capital over labor at home was more than matched by his concerns of an apparent encroaching international "Red menace." Part of Truman's response was his signing in 1947 the National Security Act which led to the development of the Central Intelligence Agency (CIA) to turn its wartime predecessor the Office of Strategic Services (OSS) into a peacetime operation with much the same purpose. And it would be the CIA, along with other intelligence gathering agencies in the federal government, who would help fund early communication studies research and have elements of those studied conclusions applied broadly throughout commercial marketing, entertainment, media, academia, and as part of illegal operations targeting Black Americans and others deemed internal threats to national security. Some of these efforts would later be organized as part of the CIA's Project MK-Ultra and those initiated by the Federal Bureau of Investigation (FBI) under the Counter Intelligence Program (COINTELPRO).
Black capitalism is a fantasy which feeds and grows from social, political, and geographic separation. However, actual economic growth requires mobility and global access which can never occur in Black capitalist separatist illusions.
Page 41: Nixon's campaign made promises to support the development of Black capitalism, which involved government support for Black businesses through tax breaks and promises of investment, and though dismissed (accurately) by many as a mere tactic for election the pre and post-election focus on the project by the administration made a lasting impression.
Page 41: In 1969 Nixon's administration launched the Office of Minority Business Enterprise (OMBE) housed within the Department of Commerce but it was not long before lack of government investment, lack of Black businesses, and a lack of money within the Black community sufficient enough to propel those businesses meant that the project, as a method of improving the material conditions of Black people, could not succeed.
Page 41: As Baradaran said during our interview, "you can segregate people, but you cannot segregate money." Her's was a similar response to and critique of the claims still made today that Black people can improve themselves and their collective lot by shopping Black, investing Black, and "making the dollar rotate in our communities as it does in others." As Baradaran explained, wealth cannot be generated in this way because: (A) wealth is created by investments in the broader national and global economies, not by circulation within one isolated group or economy, and most relevant here, (B) Black people do not have enough money to generate, support, and sustain enough businesses who themselves can satisfy the consumer needs and wants of an entire Black community. When asked specifically, "has there at any point in Black history been a time when if all Black people pooled their wealth and used it collectively that they could have overturned their persistent inequality?" Her answer came quickly and was simple, "No"
Page 42: This is precisely what many critics of Nixon's proposal say was the true goal of his proposed Black capitalism; promise support, as Baradaran has said, offer only "tax breaks and incentives," but with no meaningful investment, "Wanting a black capitalism without capital is exactly Mr. Nixon's legacy…" Rebranding and propagating the myth of Black capitalism was more to, "… secure the support of white Southerners and to oppose meaningful economic reforms proposed by black activists" than it was meant as any meaningful attempt to redistribute access to resources or the wealth they produce Nixon's desire for "containment potential domestic Black radicalism" was simply his adherence to existing national policy. It was his internal Cold War. Already in motion was the Counter Intelligence Program (COINTELPRO), designed by J. Edgar Hoover and his Federal Bureau of Investigation (FBI), and which was designed to attack all varieties of Left politics. Targeted specifically at the Black liberation movement its expressed goal was to, in part, "prevent the long-range growth of militant black nationalist organizations, especially among youth," to "discredit" those deemed as "… [black] rabble-rouser leaders of these hate groups from spreading their philosophy publicly or through the communications media"
Page 43: The subsequent "law and order" policing and a "war on drugs" policies of the Nixon administration, which were only more recently admitted to be Nixon's targeting of his "two enemies: the anti-war left and black people," (Lobianco 2016) were only part of a broader interest in limiting the form Black politics would take.
Page 44: Though not alone, John H. Johnson's originating promotional materials and print media empire consisting of Ebony and Jet were followed a generation later by another Johnson, Robert, no relation. This Johnson, and his multimedia empire consisting of Black Entertainment Television, along with media mogul Cathy Hughes' Radio One and Television One networks, and with the assistance of popular media personalities most notably Tavis Smiley and Tom Joyner, the myth of Black buying power would somehow create a forced inherency of sorts, and a new powerful ubiquity.
Chapter 4: The Myth's Modern Purveyors: Reviewing Selig and Nielsen
Page 58: Wealth, not income, is a far better determinant of economic condition. Income is acceptable if the goals are ad revenue and not assessment or analysis. Which may explain why, even after close examination, the methods involved in arriving at the conclusions reached by the Selig report are no clearer than before.
Page 58: Quoting at length from the report's "Methodology:" Because there are no direct measures of the buying power of African Americans, Native Americans, Asians, Whites, and Hispanics, these estimates were calculated using national and regional economic models, univariate forecasting techniques, and data from various U.S. government sources.
Page 59: GDP only measures the value of goods and services purchased in a given year, meaning, GDP measures the wealth generated for those who own those goods and services and says nothing about the relative condition of those doing the spending. GDP does not measure inequality within any given national economy and, therefore, cannot measure the cavernous gaps between what Black people earn and then spend on goods and services produced by (White) corporations. In fact, as shown in the Pew Research chart below, inequality actually can and does increase as does GDP.
Page 59: When someone buys a sandwich, they have contributed to the national economy and GDP. But their relationship to the value created by that purchase is nothing compared to the owner of the sandwich shop or those who own the process of bringing food from farm to table, or processing lab to grocer shelf, and it is this difference which is not measured by GDP.
Page 60: Since 1979, the bottom 20 percent of earners saw their income increase by 18 percent.5 Over the same time period, the top twenty percent of earners saw their incomes increase by 65 percent and the top one percent saw their incomes increase by an astonishing 277 percent. The U.S. GDP, meanwhile, more than doubled over the last 30 years with no ability to reflect the growing income inequality.
Page 60: Buying power is a phrase developed by marketers to attract advertising revenue. The numbers read as immense and impressive but, in context, reveal themselves to be reflective only of what wealth is being generated for the owners of production.
Chapter 5: The Myth at Play: The Oh So Suitable Environment
Page 63: The century-long construction of our media environment designed to reduce and equate citizen to consumer has made all-but meaningless nominal differences in ownership with audience creation the perfect circus for buying power mythology to ringmaster.
Page 64: Nearly all we see, read, and hear is determined by corporations and/or private equity groups themselves interlocked and largely politically in accord with one another. It is precisely this problem, an arrangement of a commercial media environment and journalistic practice, that has aided, if not entirely propelled the myth of buying power.
Even when the national unemployment picture is good, the black unemployment rate is more than twice that of the white unemployment rate. This means that in what looks like good economic times nationally, most of black America is still experiencing a recession. When white America is in recession, black America is in an economic depression.
Page 67: Traditional class, business, or anti-labor biases in commercial media are often involved leaving plenty of room for public relations and marketing claims such as those promoting buying power.
The wealth gap is the most acute indicator of racial inequality. Based on data from the 2002 Survey of Income and Program Participation, white median household net worth is about $90,000; in contrast it is only about $8,000 for the median Latino household and a mere $6,000 for the median black household. The median Latino or black household would have to save nearly 100 percent of its income for at least three consecutive years to close the gap. Furthermore, 85 percent of black and Latino households have a net worth below the median white household. Regardless of age, household structure, education, occupation, or income, black households typically have less than a quarter of the wealth of otherwise comparable white households.
Page 71: McNeil, of course, did not discuss Dr. King's increasing radicalism, frustration with the lack of progress of boycotts and non-violent protest, or his evolving preference for socialism, or at minimum, massive government intervention in the redistribution of wealth. McNeil did not raise King's own published, and previously mentioned, critique of buying power, or his clear condemnation of consumerism as a pathway to equality. This demonstrates the power of propaganda and the myth's propulsion via both the myth's creators in commercial media and the myth's more easily and broadly digestible inherent politics.
Page 71: The practice of journalism has always involved forms of political, ideological, and commercial struggles, and it has not gone unnoticed that one feature of those contests is those which involve class or labor. The need for commercial presses to generate as much revenue from the business adbuying community has often set limitations on how much, and from which frame, issues of finance, and labor are covered. One outcome of this arrangement is that often these issues are reported from the perspective of business leadership or the commercial class leaving not a lot of room for nuance, depth, but plenty for the big, headlines and easily repeated simplifications, or myths.
Page 75: Baker recognized the histories of oppressed groups making use of boycotts and having Black, as he said, "purchasing power" effect some change. But he also acknowledged this as being "limited" in its impact and as having nothing to do with redistribution of wealth or the closing of income gaps. In fact, Baker said, that buying power and boycotts, have, "little to do with the overall economic state of the African American community in the United States."
Page 77: Most of what these UFE reports detail is what would be King's own often suppressed legacy of criticism of the limited progress made during the Civil Rights Movement, or his ultimate reference to his dream as having become a "nightmare." Part of King's conclusion was the result of his realization by 1968 that change had been more symbolic than material and that new levels of heightened struggle would be necessary if anything more meaningful was to take place.
Dreams are powerful things. Dreams reveal that which is most human about us: our hopes, our fears, and our vision for a better tomorrow. Even though it has been 51 years since Dr. Martin Luther King, Jr. famously shared his dream of an America made available to all, regardless of skin color or economic status, we are still fighting for many of the same principles that the Civil Rights Movement stood for—and many are seeing and experiencing much of the social strife that rises to the surface when people unite to challenge the status quo. We know exactly who today's dream killers are: banks on Wall Street, payday lenders, check cashers, auto title lenders, those in the student loan business—all the companies that drain the wealth of marginalized individuals in the name of profit or shareholder returns. The workers that are economically preyed upon—these dreamers—deserve better.
Page 79: According to the Institute for Policy Studies one need only count the top 100 wealthiest people in the country to eclipse all the wealth held by all of Black America combined.
Page 79: These comparisons are not meant to create a false standard of Whiteness, or material definitions of success. The contradistinctions find their greatest value in demonstrating what potential there is or is not. Tremendous accumulation of percentages of land, wealth, stock (as will be discussed below), and other assets, including income disparities, and previously described penalties for Blackness, such as over-policing, also limit potential. One cannot buy land that is already owned and not for sale even if one could theoretically afford its value.
Page 80: The origins of buying power in "Cost-Of-Living" surveys by the Bureau of Labor Statistics were meant to ease potential social unrest by alerting workers what their wages were actually worth in the national economy and making business and government aware to manage those wages and the prices of available goods to assure labor could afford products brought to market. This is perhaps the most insidious aspect of the myth in its current form. Now Black buying power is used to compel Black working people that persistent, even worsening, inequality is correctable by redirecting a non-existent pool of wealth into an equally non-existent place within the national economy.
Page 80: Black people could better use their incomes to improve their communities. During their special in 2016 for Labor Day, CounterSpin, the radio component to Fairness and Accuracy In Reporting (FAIR), discussed with Holly Sklar of Business for a Fair Minimum Wage, the growing concerns among corporations that working people could no longer afford to buy their products.
The biggest thing businesses have complained about in recent years is that they're just not seeing enough consumer demand; they're not seeing enough consumer buying power; they need more. You know, you need people to buy what they are making in order to sustain the business and to grow the business, and there's obviously a direct connection—I say obviously, but folks like Donald Trump, ideologically, don't want to see it as obvious—you need people to have enough wages to be able to buy what they need. And if you are going to have a growing middle class, you need people to be able to buy more than just the bare necessities, right? And that's what we've lost sight of.
Page 81: The propaganda promoting a mythological buying power is actually beginning to negatively impact those for whom the myth was originally intended; the companies seeking best use for their advertising dollars. People are not earning enough to buy all that they help produce and which the companies selling those products need bought. The heavy promotion of the myth of buying power increases ad expenditures, which increase sales expectations, and those expected sales are, of course, driven up to match the advertising dollars spent largely as a result of the promise of power held among those targeted by those ads to buy what is sold.
Page 81: Hanauer, while being clear not to equate his position with socialism, did say that those like him who are in power must raise the minimum wage closer to $21 an hour, and dismissed as a "trope" the claim of his elite colleagues who argue that raising wages "kills jobs." "Capitalism," he went on, "is a good system or it's not…," it can either allow working people to "lead stable and dignified, secure lives" or it needs to be replaced. He, of course, does not want that. What he does want, what benefits his class most, harkening back to Bernays, is a "secure middle class and a stable democracy." This, he says, demands strong buying power.
Page 82: More importantly, as both stories demonstrate well, buying power is defined, by dollar value, the ability of corporations and marketers to extract whatever dollars exist for their own enrichment or advanced influence.
Page 82: Black buying power cannot mean or reflect the possibility Black people have to overturn existing inequality as it is literally a measurement of the ability of Black people to enrich a minuscule Black bourgeoisie en route to truly helping a far more prominent, and mostly White, power structure further enrich and protect itself.
Page 82: Consider, in 2017, "the median annual earnings for full-time year-round black women workers was just over $36,000—an amount 21 percent lower than that of white women…," (Banks 2019). Further, collectively, "The immense disparity in wealth between white and black households has reached its highest level since 1989; for every dollar of wealth owned by the typical white family, the median black family owns only five cents." And for Black women, levels of education, experience and age to not come with commensurate levels of pay or access to wealth and at its most extreme, "black single mothers experience the largest wealth disadvantage with a median wealth of zero"
Page 84: There are many other associated fantasies packaged in claims of dollars circulating in communities, or, "keeping money in the community." Among others would be the fantasy that there are enough Black-owned businesses in Black communities large enough to serve the consumer needs and wants of that community. Again, buying power is a concept developed by advertisers for advertisers where the goal is not to have money remain in any given community but to move from that community into the pockets of the advertisers and the owners of the products being marketed.
Page 84: The "power of Black dollars" is in their ability to flow outward. There are few Black-owned companies and less capital in Black communities to develop them large enough to serve Black consumer needs. Buying power does not represent the potential within any community to develop business, procure assets like land or stock, or to invest in any developmental programs. Buying power represents the outflow potential to enrich owners of companies large enough to serve national populations.
In terms of types of financial wealth, in 2013 the top one percent of households had 49.8% of all privately held stock, 54.7% of financial securities, and 62.8% of business equity. The top ten percent had 84% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America; see Table 3 and Figure 2 for the details. The only category which is not skewed severely toward the upper class is debt.
Page 85: If 1% have nearly half of all the stock, and the top 10% have "84% to 94% of stocks, bonds, trust funds, and business equity," what is left for purchase? Similarly, the Black Enterprise piece answers its own contradiction and, in many ways, simplifies the entire argument over buying power. As the piece claims By the way, as of the 2010 U.S. Census, there were 42 million black people in America (including multiracial African Americans). That means $1.2 trillion equates to about $28,600 in spending power per person.
Page 85: This previously discredited formula simultaneously, dangerously misleads, adds to the myth's propulsion, and also demonstrates the myth's flawed logic. If Black median household income has only just reached $41,511 in 2018 (Berube 2019) it makes impossible the figure quoted above $28,600 per person in "spending power." First, of course, of the 40+ million Black people, not all are working age, or have their own income revenue. Secondly, the $1+ trillion figure is itself a figment, as previously described, of marketer imagination, survey data extrapolation, and curious math.
Page 86: What is evident here, again, is the power of the myth to create false realities and frames of reference from which proceed the most flawed arguments and conclusions. If the median household income is not quite $42 k annually, how then could it be described as "power" that each person would be said to then be spending nearly all they make?
Chapter 6: Freedom Was the Call but "Instead, They Got a Bank"
Page 91: Claims that Black people should pool their savings, assets, and wealth with the use of Black-owned banks has a long history of being shown as insufficient in addressing economic inequality.
Page 93: Among the paralleling themes challenging Black banks are, of course, centuries of exclusion from capital, paid labor, or public policy support for the establishment and protection of Black banks. There are issues of higher labor costs and servicing fees and rates of private versus government deposits.
Page 93: But essentially, while there is debate as to severity, impact or potential, the primary issues facing Black banks are similar to the underlying problem facing claims of Black buying power: Black people do not have enough money. Black people do not have enough to deposit, wealth to offer as collateral, nor the ability to circumvent persistent White supremacist devaluations of Black housing, land, or business to generate the kinds of banking (economic) strength required to serve the needs of a Black community.
The primary question here would then be, why should it be expected that any "small bank" could solve the very large economic problems faced for centuries by Black America?
Page 93: In her recent book The Color of Money: Black Banks and The Racial Wealth Gap (2017b), Mehrsa Baradaran details the many ways in which banking cannot solve economic disparities. In fact, as she points out, "Black banking has been an anemic response to racial inequality that has yielded virtually nothing in closing the wealth gap" (2). Summarizing several of her larger points is of value and speaks to the themes which are seen throughout the tradition of criticism of Black banking.
Page 93: The first is that Black banks cannot solve problems of inequality because of the very nature of banking, and ultimately the White supremacy, carried out through public policy, which both limits the income and wealth Black people have historically, and today, been able to accumulate, and which mitigates material gain by devaluing what Black people own. As she points out, for instance, Black people, by racist policy, earn less, and, therefore, have less to invest, or deposit.
Page 94: The property available to Black people and, due to racist devaluation, the property Black people end up with, cannot generate the kinds of profits banking home loans would be designed to bring back in returns. And because Black banks are too small, containing what is too little wealth held by Black people, the profit banks rely on that which would normally come from investing depositors' accounts in the global market, is also unavailable to these Black banks.
Page 94: Contrary to what is promised by popular calls to bank Black, because these banks are largely isolated from larger economies, and are often dealing with small, incremental deposits and savings, and historically have had less return on investments or loans, all of which costs banks to service, there is little that they can generate to actually perform the community uplift often ascribed to their potential. For instance, the call to deposit Black income in Black banks does not help small banks, Black banks as is assumed.
Page 94: Deposits, Baradaran points out, "are liabilities" to banks. Deposits become debt which banks must service with interest and have covered and available should any depositor want her money at any given time (Baradaran 2017a, November 4). Unlike larger banks working with much larger sums, and with full access to invest those sums in the global economy assuring greater returns, Black banks cannot cover, cannot afford to loan out, and do not recuperate loans at the same rate and with the same levels of profit, as described above.
Page 94: Black banks may want to self-promote as being one with political movements, and with the people, but they, as Baradaran noted, do not really find value in what most Black people can deposit.
Page 94: This was evidenced more recently, February 10, 2017, when it was reported that the Black-owned Seaway bank of Chicago closed and was sold off due to, "operations of an unsafe and unsound nature that resulted in inadequate capital to protect its depositors…" (Kenney 2017). As the story continues, "Prior to its acquisition by the State Bank of Texas, Seaway Bank had approximately $361.2 million in total assets and $307.1 million in total deposits, the FDIC's press release stated.
But the institution's heavy involvement in the #BankBlack movement last year still wasn't enough to secure much-needed depositors from the African-American community"
Page 95: But gaps in society play out at all levels and banking is no different. What myths of Black buying power, banking, capitalism, all deny, aside from real potential, are histories of previous critique.
Page 95: As has been the case with its smaller cousin buying power, Black banking has been supported by the full panoply of Black political varieties and for much the same reason; a fundamental misunderstanding of definition and function have many, even the well-meaning, to assume their ability to make use of these endeavors in ways perhaps even unintended by those who made them available.
From Frederick Douglass, Booker T. Washington, W.E.B. DuBois, Marcus Garvey, Martin Luther King, Jr., Malcolm X, Jesse Jackson, The Black Panther Party, to Barack Obama, all have, for various reasons, supported the value of Black banking. Today, the bank Black concept is championed by new pundits and leadership, such as, Killer Mike, T.I., and #BlackLivesMatter. But, as remains the case today, and is certainly the case with buying power, criticism of Black banking and capitalism have long suffered an inattention reserved only for those often dismissed as crushing hope or being marginal themselves.
Page 96: Once more, GDP is the value of all goods and services in any given country during any given year and is a value which goes to the owners of those goods and services. GDP is not a number depicting the economic strength of various communities within a country, nor is GDP, as Mitchell also said, a measurement of anyone's "income." When I alerted him to this fact, that buying power numbers are not derived from a Black national GDP, Mitchell, like most, unaware of the origins of his own claims, asked, exasperated, "… where do {those numbers} come from?"
Page 97: Mitchell explained that Industrial Bank "… made loans to the point where we need deposits…" to "fund" the loans made to other customers. Never mind that Mitchell's response seemed more to describe a classic pyramid scheme than any actual community wealth producing mechanism or process, but as stated, the limitations are inherent to the situation itself. Black people, as a result of a history of White supremacy and economic exclusion, earn less, have what little they own devalued as a result, and, therefore, are given less and more interest-laden loans, which appreciate less simply as a result of becoming Black property, and, therefore, also yield less in value, in no small part due also to the fact that Black people then, as consumers, have less to spend.
Page 97: So much of the power behind the impact of the myth on Black America is derived not from the myth itself but its messengers. Originating, in this iteration, with the Black commercial press, the myth is carried by the White mainstream back through punditry, even more grassroots media, and political activism, and permeates uncontrollably.
Page 99: No one investigates the claims of Nielsen, nor its method of surveying the spending habits of a relative handful of Black shoppers and, from there, extrapolating a power itself only defined, by them, as an ability to buy advertised products.
The claim of buying power's potential is merely then repeated as rote. If Black banks, Black media, and elite White media, government officials, and ad buyers all heavily support and promote a myth what chance do targeted audiences have?
Chapter 7: Conclusion: Policy and Organization Versus Economics
Page 102: The media environment created in the United States over the last century was developed precisely in order that it would produce new Americans as consumers who accept as inextricably linked the concepts of democracy, freedom, and capitalism.
Page 102: If domestic and global inequality are signs, then capitalism needs replacing because fewer every day are able to lead stable or dignified lives. There are obvious relative differences but capitalism cannot be said to be working for any entire racial, religious, or ethnic group, not even White ones. The effects are showing. As more of the wealth produced domestically and around the world redounds to an ever-shrinking number of (mostly White) people it still remains that even more Whites are finding it harder to keep within nearly any defined version of the "middle-class." Not unrelated is that more Whites are also reporting increasing rates of depression and suicide. And then they are also arming themselves and reinvigorating old tropes of blaming their worsening conditions on Black people and immigrants.
But no group has the myth of buying power so heavily promoted to it and from within its own business class making the concept so much more damaging to their political consciousness than Black America. Beyond promoting the mythology alone the propaganda contained encourages an almost unquestioned belief in the ability of capitalism, and the White supremacy around which it is organized, to produce positive results for the whole. When this inevitably does not occur the myth is there to step in and assure that any failure to materially advance is evidence of an inherent flaw with any given individual or the entire community.
Page 103: Nielsen also continues to rebrand "power" as the ability to buy products targeted for sale to Black people. For instance, the "power" and "influence" of hip-hop is defined by the ability of today's hottest rappers to promote brands to their audiences:
Page 103: Once again, buying power is the ability to purchase goods and services mostly produced or owned by non-Black Americans.
Page 104: Persistent and worsening racial wealth and income disparities and the negative impact this increasingly has on Black consumption is being seen as a threat to the entire national economy.
The widening racial wealth gap disadvantages black families, individuals, and communities and limits black citizens' economic power and prospects, and the effects are cyclical. Such a gap contributes to intergenerational economic precariousness: almost 70 percent of middle-class black children are likely to fall out of the middle class as adults. Other than its obvious negative impact on human development for black individuals and communities, the racial wealth gap also constrains the US economy as a whole. It is estimated that its dampening effect on consumption and investment will cost the US economy between $1 trillion and $1.5 trillion between 2019 and 2028—4 to 6 percent of the projected GDP in 2028….
Page 104: If Black people are not paid more, just enough to shop more, the entire economy suffers, that is, the wealthy few who own the goods, services, and the processes which bring them to market and market what is brought to the consuming public.
Page 105: New, fact-based information, if presented but contradicts existing views, can be resisted or is ineffective in penetrating constructed realities. And these are the conclusions reached in studies where there are actual retractions published. In the case of Black buying power not only have there been no retractions, but the claims are being supported, even produced, and published by the commercial presses of both the mainstream and Black community and have been for decades. Even where there is criticism it has been, as shown above, diminished, overwhelmed, or removed entirely. This will indeed present a problem, and has for years, regarding the impact of this argument. But this argument demands engagement if there is to be progress made or for any suggested solutions to be at all meaningful.
Therefore, if there are to be any solutions, they must include a vigorous criticism of the commercial presses (Black, White, all, etc.) and their relationship to political movements and the histories of these movements. More work needs to be done in exploring the impact of class bias on Black commercial presses and media, and on class itself as an issue within Black America. It is clear that the political and economic incentive among the most popular commercial presses (Black, White, any, etc.) is to promote a material existence and history which is consistent with their own interests but is often inconsistent with reality. The necessary intellectual and journalistic work is not likely to be welcomed.
Page 105: This is why, for instance, so much of the historical discussion and contemporary reporting regarding buying power and Black politics centers Black capitalism with almost nothing meaningful found in commercial Black presses of the histories of socialism, communism, pan-Africanism, anti-imperialism, and radical nationalism.
Page 105: Black historical luminaries are often relegated, when discussed at all within Black commercial media or presses, to their engagement with various entrepreneurial endeavors absent any of their contemporary critics or alternative offerings. This furthers the myth's tacit ability to promote capitalism, while denying current realties, and to constrain thought about what can be done going forward.
Page 106: The popular position taken associated with buying power, or a larger belief that capitalism can be adjusted favorably to work for all, is that Black people have made the historical mistake of putting too much emphasis on politics and not on economics. If, the argument goes, more time were spent developing Black wealth like "Jews, or the Asians running the corner stores and hair care businesses" in "our communities" then Black people would come up as those groups have. What these perspectives generally miss is that whatever advances these and other communities have made are (a) not erasing class divisions within any of those communities or their originating countries, and (b) whatever anyone has ever done to improve their economic position has required public policy or government support. Poor people, Black, White, and so on, cannot close any societal gaps, economic, or otherwise, without political movements which assume political power and redirect public policy to work for more if not all. Those who benefit most from the economy understand this point well and have developed policies and regulations assuring wealth we all help generate is transferred ever upward.
Page 106: As an example, recently authors Lindsey and Teles (2019) have described ours as a "captured economy" or one with public policy suffering already from "regulatory capture." By this they mean simply that the wealthiest have taken nearly full control of the apparatus of government and have set public policy to their exclusive benefit. While promoting another powerful myth of desiring "small government" the elite continue to use government in a big way to enact policy which protects their interests. What goods go to market, and at what prices, or at what rates were those goods taxed, or subsidized, what laws regulate banks (or do not), or determine their function, the value of the money in our accounts, who can buy what land and do what with it, what wars are fought to protect which business interests, and who are allowed to privatize publicly funded research turning it into military defense or pharmaceuticals for sale on a global market, and then who gets what share of those generated profits, all is determined by policy. And for a few it is working well.
Page 107: GDP is a measurement of what is actually collected as opposed to "projections" and "estimates" of what is spent. With that amount being generated every year there should be no one in need and there should be only ever-decreasing gaps in material inequality. However, solutions requiring the asking and answering of different questions can never be developed when the premise is an illusion created by The Illusionists.
Black politics cannot continue to be so heavily dominated and limited by a marketing tool developed and used by a commercial media and business class. The meaning of power must be reclaimed and understood, not as resulting from consumption, but as organized, collective, and mass political action.
