Is cryptocurrency beneficial to poor Blacks? No.

Yesterday the Bank of International Settlements issued an annual report with a 24-page chapter discussing cryptocurrencies. The report is critical of cryptocurrencies and the premise of decentralization. It argues that cryptocurrency lacks the stability in value and pricing brought about by a centralized payments system. While I am not surprised by the report’s bias toward centralization (BIS is after all the central bank of central banks), I appreciated the detail the report went into when describing decentralized ledger transactions and comparing that system to a centralized, central bank-based system.

The volatility of cryptocurrencies like Bitcoin experience may be enough for most consumers to ignore cryptocurrency as a store of value or a medium of exchange.  As was a little perplexed last year when I saw a number of black Americans pushing cryptocurrency as the next big and best bet for achieving wealth. The sidewalk marketing was being done in an environment of unexplained rising Bitcoin value. I am not lying when I say I felt good about Bitcoin falling from highs of about $20,000 end of last year to around $7,000 today.  These people I saw riding buses through Brooklyn telling people to get onboard something so bloody technical that most never understood it needed a reality check, and the relative quiet I experience on social media from the silence was refreshing.

More importantly a pullback invites putting cryptocurrency and money in the proper perspective. First, analyzing new currency spawned by financial technology requires separating ourselves from the emotions.  In the American black community, the first cool dude with swag that can push the right emotional buttons on a people who are over-indexed on emotions will win the day, at least temporarily. Sheep, as Jim Cramer is fond of saying, get slaughtered.

Second, analyzing currency should come with the realization that we understand little about currency, money, markets, and economics. We conflate markets with consumerism and that is a mistake. Consumerist activity is low hanging fruit; easy to grasp because we are quick to meet our emotional needs with a gift bag. Meanwhile, those pushing Bitcoin on us didn’t have a clue as to the economic justifications for the increase. They asked us to view crypto the way we go out and buy houses and cars: come on down because the price is right. That kind of thinking, like the show, is corny.

Currency, whether digital or real, contains a message about an underlying economy. Cryptocurrency has no underlying economy. It cannot transmit messages about the value of an underlying economy because there is no underlying economy to begin with. The realities of an underlying economy keep a currency in check with market transactions providing consumers and producers with information as to how well the economy is doing and whether it is viable enough to project the “good faith” backing of a currency. Crypto does not have an underlying economy. While more vendors are using it, its use is nowhere near the use of real currencies.

For black people to push crypto on poor black people was abominable.

What the high price for a Bitcoin tells us is that if an underlying economy is developed, it will not be a world where the poor will be allowed to play. The price is transmitting a prediction about exclusivity. For example, urban cores like Atlanta, New York, and San Francisco are pricing the poor and middle class out of housing and other amenities. Why not develop a currency that reflects that new reality? Has it ever really been about inclusion or does the reality reflect exclusion?

America needs a new civil rights paradigm; one that puts the individual first

There is racism in America. America’s institutions were designed to route capital away from various groups based on race. America’s founding was race-based evidenced by a European policy of removal of Native American tribes from ancestral homes in North America where removal was based on a theory of discovery that, on one hand acknowledged the occupancy of America by Native Americans, but on the other hand, chose to abide with what it identified as a global rule where the country discovering the occupied land can declare acquisition by discovery of the occupied land and remove the occupants by force.

Europeans used a similar argument when it entered the African slave trade and removed people from their homes in Africa and transported them to North America. Like the Native American, Africans were given sub-human status justifying their removal as nothing but chattel property for use as unpaid labor.

America’s history is steeped in racism and as part of its redress federal, state, and local governments have embarked on an almost 60-year initiative to guarantee the rights of individuals to receive “equal treatment” by prohibiting discrimination against classes of individuals (race, age, gender, sexual orientation, etc.) who are pursuing certain endeavors, activities, or opportunities including education, employment, housing, borrowing on credit, housing, or voting.

I see two problems with these attempts at redress of wrongs allegedly perpetrated on certain groups. First, there is the total disregard of the individual where civil rights laws attempt to extend the “tyranny of the masses” that is becoming increasingly virulent in democracy. Groups of unknown individuals identified only by the class that they may fall in may now, backed by the force of the State, restrict the ability of the individual or an association of individuals from engaging with who they want or engaging in certain aspects of the market on terms that best serve their individual or group interests.

The second problem, particularly as it involves blacks in America, is that civil rights laws create a reliance on another group’s “safety pin”, a false and dangerous narrative that says that blacks should seek protection from a group whose wealth has been built on a history of systemic and systematic initiatives designed to keep power. There is a fallacy that the group that has kept its boot on the neck of black people is expected to remove the boot solely on the power of morals.  Rather than seek true economic and political empowerment via total independence, the current civil rights framework has the group with the boot creating the framework for redress on its terms while blacks hope and pray that the pressure of the boot is relieved just enough so that they can swallow a couple mouthfuls of fresh air.

Both problems, the attack on the individual’s freedom to disassociate and the lack of empowerment for and among blacks promoted by the civil rights framework, are best addressed by the dismantling of the current framework. Dismantling the framework eradicates the erroneous interpretation of the role of the State as protector of the individual and introduces many blacks to the reality that true empowerment comes from the ability to set your own course toward liberty.

Civil rights is anti-individual and anti-empowerment. The framework must be abandoned. It fosters weakness.

Collectivism dampens your ability to be a high-value individual

As a libation-centered population, members of the African Diaspora tend to call on memories of those who have passed on when assessing our reality. Lineage is important because it helps identify and locate family members that can contribute to the economic and financial needs of individuals or households under duress. Blacks, in my opinion, take the story of Jesus’ sermon on the mountain more seriously than other ethnic groups; probably too seriously. Collectivism is so incorporated into the DNA of blacks in America that blacks focus too much on what they can allegedly do as a group versus as individuals.

For the person with mouths to feed, can she say that enough economic and financial benefits have flowed through the black population to the extent that she can say that collective political and economic action has created wealth or opportunities to pursue wealth?

Collectivism is a political or economic theory advocating collective control especially over the means of production and distribution.  Emphasis is placed on the collective versus individual action or identity. In the black population, the framework for collectivism has been passed down by ancestors through a prism of historical pain and economic and political suffering. This view of the world lays at the base of black group reliance with the nuclear family at the core of this reliance.  It is a view that has sustained us but is it a view upon which blacks can thrive? Given the historical wealth position of the black population, the answer is no. We may have a people sharing collective pain and suffering but we are not a people optimizing a collected resource.

One solution may be for the individual to use lineage as a backbone or spine for a network where each individual along the spine is a plugged-in, high-value information node. Rather than sit at the family table drawing down limited resources by virtue of your last name, each family member is expected to learn a trade or skill, develop and plug into additional networks and labor markets, use income and information garnered to sustain herself, and share excess income and information with her lineage.

This may sound like collectivism, but the difference is the emphasis on each node being individualistic. Each node follows it own value system and manages its resources as it sees fit without interference from other family members. The goal should be to avoid being monolithic in thinking and approach to political, economic, and social events. By attaining true diversity in thought and action, each node along the lineage conduit helps bring true diversity to their populations.

As new information is brought into the population, and individuals increase their social, political, economic wealth, there is greater incentive to procure more knowledge and create resources around which a real community can be built.  As I shared in an earlier blog, blacks are part of a population, not a community. Blacks have no resource or substantive economic activity that they control that provides residuals off of which they can survive and thrive. To attain community status, more members of the population must engage in outside-the-box thinking and this involves encouraging more free thought which is better derived via more individuality.

Free thought and individuality creates the high-value information human nodes that the black population needs.

For Blacks, government is god

Every Monday and Wednesday night I allow myself a little political entertainment by tuning into YouTube and watching Yvette Carnell, founder and editor of Breaking Brown.com. Ms Carnell brings a passion and data driven analysis to political and social events impacting descendants of slaves brought to the United States from Africa. Ms Carnell “keeps it real” about the economic plight of black Americans and is especially scathing of those who fail to view politics as an avenue for obtaining resources, particularly capital, as reparations for the kidnapping and enslavement of Africans and the lingering effects that slavery has on the present members of the African Diaspora brought to America.

Where Ms Carnell loses me is when she proposes that government is the only option for righting wrongs perpetrated by the holders of capital on slaves imported from Africa. Government, as I interpret Ms Carnell, should bear the burden of providing the descendants of African slaves with treatment equal to those received by whites who have certain privileges available to them as a result of their lineage. Ms Carnell rejects talk of black American self-reliance arguing cogently that black American descendant of slaves brought from Africa are at a severe disadvantage because it was never the intent of government to extend sufficient capital in the direction of blacks so that they could thrive in America.

Ms Carnell’s 43,000 YouTube subscribers for the most part agree with her and I know plenty of people, some of them friends, who would sympathize with her position. Government has been the source of oppressive tactics and strategies against blacks in America for centuries. Some blacks also consider government the source of positive change in American society, from the banning of the separate but equal doctrine for schools, common carriers, and other public facilities, to extending universal suffrage to black voters in the South. So while blacks in America perceive the real world as one of pain and suffering, government, the entity that has and still does keep a boot on the throats of blacks, is also viewed as a very present help in trouble.

But rather than god, what if blacks treated government as a protection agency option? I came across this phrase when I read The Sovereign Individual by James Dale Davidson and Lord William Rees-Mogg.  The authors, proponents of a movement from onerous customs and tax districts like the United States, described various governance structures for occupied territories and how modern digital communications technology could enable individuals to either live outside of the barriers of traditional governments or carve out their own sovereign niches within them.

Admittedly the problem with the approach of The Sovereign Individual is the level of capital that one would need in order to exercise the type of autonomy described in the book. It takes a great degree of capital to negotiate the occupancy of a physical space where the individual doesn’t pay traditional taxes; where within carved out areas the individual provides for their own police services and can exercise the right to legally exclude anyone who does not fit their criteria of community.

The biggest problem I believe is mindset. There is a malaise within the black population; a narrative that any attempts at freedom would be met by actions similar to those that took place in Tulsa, Oklahoma in 1921. Between 31 May and 1 June 1921, a white mob attacked the black American community of Greenwood, a thriving community within Tulsa known as “The Black Wall Street.” Where conversations arise about furthering black economic empowerment, naysayers raise their heads citing the egregious state actions that occurred in Tulsa that Memorial Day weekend.  Almost 100 years after the military and terrorist attack on Greenwood, the survivors of the attack have not been compensated. Petitions to the government have resulted in dedication of a park and some scholarships for descendants. Can anyone say that the State has dome right by its black American parishioners? Can blacks afford to use the memories of these behaviors to prohibit them from getting out of State-sponsored hell?

For blacks, government is god. This god is not benevolent and sooner or later, the church service has to end.

Blacks live in a population, not a community

Black Americans have built their collective around a history of pain and suffering, a misery that a significant portion of the black population have never directly experienced. A part of the reason for the collective mentality stems from being a libations people. Some blacks in America have continued some semblance of the practice of commemorating the ancestors. All groups have some degree of reverence for the elders but I find that blacks in particular take the reverence to another level. Take for example John Lewis, the representative to Congress from Georgia’s 5th district. Mr Lewis, who has served in the U.S. House of Representatives since 1987, rarely fails to remind us of his experiences marching with Dr Martin Luther King. For black Americans to turn Mr Lewis out of office would be sacrilege even though his effective over the years is highly questionable. As a messenger who reminds black Americans of pain and suffering, Mr Lewis is one of many architects of the narrative of a black community.

I have argued before that blacks do not have a community. At the risk of sounding like a fan of “trap music”, the poor and middle-income strata of blacks live in a mental, spiritual, political and economic ghetto where payday lenders, pawn shops, and tax preparers offering advances on internal revenue refunds make up the population’s financial district. Ride on MARTA in Atlanta and you observe that mobile broadband is the low cost digital source of entertainment for blacks in this income bracket. Over-indexed on both mobile broadband and social media, Facebook and Twitter are the databases and noise exchange platforms for the population.

Philosophically, Black Americans view the real world as a hostile place driven by ever present racism and a slave history that white Americans have not yet reconciled with their current privilege. Since this attack is directed at people with dark skin who can trace their lineage to Africa, most reactions from the black population comes from a collectivist albeit not entirely monolithic place.  Blacks feel trapped; they feel under siege.

Notice that I have been using “population” more than the typical word, “community.” Blacks do not have a community. Many view community as a social term. The social taint of the word is secondary. Community is an economic term with the accompanying social ordering of its members based on their contribution to the extraction, organization, and distribution of resources. At the base of a mining community is a mine and surrounding that mine is an ordering of human resources organized in such a way where you recognize leaders and followers; where you can identify where political and economic power is deployed and which classes are exercising what levels and amounts of that power.

It is the social orderings stemming from political and economic power that serve as platforms for a group’s culture, for the groups values as transmitted by the group’s leaders. I don’t see that in the black population.

Didn’t see it in Canarsie or Crown Heights. I haven’t seen it in West End Atlanta. I haven’t seen it in Baltimore. I haven’t seen it in Charlotte Amalie.  I saw populations of black people employed by non-blacks who actually owned the “vibranium.” I don’t see a community.

This lack of community along with the lack of values spawned from political and economic decision- making means, in my opinion, less of a barrier to pursuing individual self-interests.  Claims of community are empty for the black population where so-called community leaders and leading politicians have not been able to make heads or tails out of the centuries old relegation of blacks to the bottom of the political and economic totem pole. This major flaw in the community narrative is the cue for more blacks to “go their own way”, getting away from the false premise that skin color and pain throughout history should be enough to sustain monolithic thinking and poor political and economic gains.

Toward a New Political Market: Rewiring Democracy to Make Entry More Expensive

Democracy has created a political market where prospective providers of political packages challenge each other for the vote and indirect control of society. The perception that democracy is about equal expression of multiple voices within society creates an opportunity for prospective providers of political packages to delineate the market by creating different packages for a variance of voter: marital rights for the LBGTQ community; increased funding for and an increased number of social welfare programs; or progressive changes in affirmative action programs where greater access is created for middle to upper income white women. The reality of democracy, where democracy is an institution that allows more factions to vie for control of society in a bloodless transfer of power, would still result in factions delineating political markets and offering more packages only because the pot has to be sweetened to garner voters into a faction’s camp.

Is this expansion of the supply-side and demand-side of the political markets a bad thing? I believe the answer is yes for the following reasons.

First, the suppliers of political packages and the voters that demand them are creating an ever increasingly expanding State.  As an instrument of the State, government has expanded way beyond what the framers of the Constitution intended.  Article I, Section 8 of the U.S. Constitution provided limited duties for the government; limited duties that included providing post offices, a national defense, the regulation of domestic and foreign commerce, the coining of money and protection against counterfeiting, the regulation of bankruptcies, the promotion of science and useful arts, and establishing courts. Any other police powers would be left to the individual states.

Today, the federal government is involved in many parts of the individual American’s personal life. The federal government has weighed in on abortion; the regulation of marriage; on the use of contraceptives; the amount of privacy for sexual acts between consenting adults; the use of radio frequencies by individuals; who a proprietor may serve or not serve in her store; whether an individual must enter the markets to buy health insurance; the amount of information businesses must share with consumers; the amount of information companies must share with investors; and the manner in which a private corporation must manage its communications networks.

For the individual who is best able to determine and promote her personal and economic self-interests, this expansion comes with administrative rules and procedures. It comes with limits on individual experience, growth, and decision-making. It comes with limits on freedom.

The mention of freedom provides a segue to the second reason: taxation. Among Congress’ powers is the power to lay taxes. Even with the limited powers of the Congress, I would expect the amount of taxes levied and collected from Americans to grow along with the population of the United States and the infrastructure and other needs the government would be expected to provide. But along with extra-Constitutional supply of political packages comes the additional costs of supplying those packages and a heftier tax bill to go along with it.

The limited enumerated powers afforded to the U.S. government per the Constitution do not support social welfare programs such as social security, Medicare, or Medicaid, yet programs like these account for a significant and growing portion of federal government expenditures.

According to the Center on Budget and Policy Priorities, in fiscal year 2016, the federal government spent $3.9 trillion.  Social security spending accounted for 24% of federal budget spending. Together, Medicare, Medicaid, Children’s Health Insurance Program, and other medical aid subsidies accounted for 26% of federal budget spending. Safety net programs such as refundable portions of the earned income tax credit, the child tax credit, supplemental security income, food stamps, school meals, and low-income housing assistance contributed nine percent of federal government spending.

For those believing that defense expenditures and aid to foreign governments take a larger share, think again. Military spending accounts for 16% of the budget. In addition, according to the Center on Budget and Policy Priorities, interest on money borrowed by the federal government amounts to six percent of the federal budget.

Approximately 84% of the fiscal year 2016 budget was financed by government revenues including taxes. Whether debt financing increases or not, Americans will still be on the hook for paying federal outlays or paying the debt as increased burdens due to increased programs and policies are crafted.

And the burdens will increase. Analysis by the Committee for a Responsible Federal Budget estimates that the federal debt load as a percentage of gross domestic product will increase from 77% today to 96% by 2029.  Spending is expected to increase over the next ten years, from 20.8% of GDP in 2017 to 28.6% of GDP in 2027.

We have a political market place that is delivering tyranny. By creating more market participants, more issues are being spawned that lead to more expensive solutions chasing in some cases problems that do not exist. For the problems that do exist, the solutions that political packages promise are not blossoming. Democracy is failing. It is creating a society built on burden creation. A growing number of individuals no longer wish to carry the financial burdens the current representative democracy creates, especially when they are seeing no returns from their expenditures.

I propose one solution here for now: reduce the number of voters which will lead to a new voter base that providers of political packages will have to adjust to. The United States should require states to impose voter registration requirements every two years, with the registration closing one year before the midterm and general elections. Just like new immigrants are required to take a civics test in order to become naturalized citizens, Americans should be required to take a rigorous civics test in order to vote. Such a test will meet three goals.

First, a civics test will move the U.S. closer to ensuring a better-informed voter is entering the voting booth. In theory, a voter becomes a more effective citizen when they stay abreast of current political events and can apply critical thinking skills to assess those events. Today, this is just not happening.

Second, the required time to prepare and take the exam along with paying a nominal fee for taking the exam will leave the door open to only the most serious and informed voters. If democracy is to have any validity, shouldn’t participants demonstrate the concept’s importance by investing the time into taking the exam? Is this not the type of voter you want making decisions on leadership and issues placed in a referendum?

Last, a civics test challenges the very notion of democracy itself. I take to heart the following quote from Winston Churchill:

“The best argument against democracy is a five-minute conversation with the average voter.”

In today’s social media world, that argument extends into perpetuity given the overwhelming level of misinformation regurgitated by users of Facebook, Twitter, and other platforms. I at times wonder why these individuals are allowed into a voting booth and indirectly cause the creation of policies that for the most part work against my freedoms and liberties.

Democracy needs a reboot. It might just need to be tossed, at least on the national level. ….

 

It’s not about suppressing black votes, Mr Booker. It’s about cutting off the Democratic Party’s meal ticket

Senator Cory Booker, Democrat of New Jersey, today raised an issue concerning Steve Bannon’s attempts to target black voters during the November 2016 elections. In testimony before the U.S. Senate Committee on the Judiciary, Cambridge Analytica’s former director of research testified that Steve Bannon, former assistant to President Donald J Trump, sought to use data harvested by Cambridge Analytica as part of a campaign to discourage blacks from voting. Mr Booker wants us to ignore the possibility that more blacks are turning away from his party.

The reason for the butthurt over Mr Bannon’s alleged targeting of blacks has nothing to do with black voter suffrage per se. Mr Booker’s issue is that if Mr Bannon or others like him are successful in steering blacks either away from the polls or worse yet to other candidates, then the Democratic Party would be in serious trouble.

According to data compiled by BlackDemographics.com, a significant portion of the black population is affiliated with the Democratic Party. In 2012, 76% of the black population were affiliated with the Democratic Party, either calling themselves Democrats or aligning with Democratic principles or values. You would have to go back to 1968 to see the affiliation percentage exceed 90% (93%).

As for the percentage of blacks who vote for the Democratic candidate, between 1936 and 2012 that percentage was equal to or greater than 90% on four occasions; in the years 1964, 2000, 2008, and 2012. There are a couple data points that may be concerning Mr Booker and his colleagues. While a couple data points do not make a trend, they should be something to keep one’s eye on.

Back in 2000, seven percent of the black population affiliated themselves with the Republican Party. By 2004, that percentage more than doubled to 15%. A priori, that jump may have had to do with the U.S. involvement in a two-front war in the Middle East and George W. Bush’s ability to sell the U.S. on his ability to prosecute the war. Also, Mr Bush attempted to stimulate the economy during the 2001 to 2003 period via tax cuts and the one-time issue of checks to households.

By 2008, however, the portion of the black populace affiliated with the Republican Party fell to four percent, but the portion of blacks affiliated with “independent” climbed to 20%. Apparently, more blacks wanted to hedge against the probability of being on the losing side of history. Vote for the first black president without moving into the Democratic playpen. By 2012, black Republicans went back home with 16% of the black population affiliating with the Republicans.

What may be underlying these numbers is a change of heart and direction on the part of younger blacks when it comes to the Democratic Party. According to NPR, black voter turnout fell from 66.6% of blacks in 2012 to 59.6% of blacks in 2016. Over four million black voters stayed home and according to the NPR report part of the reason is that a growing number of blacks no longer believe they have a home in the Democratic Party. Blacks may no longer see voting as the best way to change their economic or social plight as the population still sees unemployment rates higher than whites and neighborhoods that are run down and facing abandonment.

No, Mr Booker. It appears that something more substantive is going on to turn away blacks from the poll other than a sponsored ad running on the right-hand side of a person’s Facebook page.