Gentrification is white nationalism that may be vanquished by monetary and fiscal policy

The Eye Catcher …

This morning I listened a bit to an interview conducted on C-SPAN’s Washington Journal with Kristen Clarke, president and executive director of Lawyers’ Committee for Civil Rights Under Law.  Ms. Clarke’s purpose for appearing on the show was to discuss the rise in white nationalism in the United States.  As I listened to the discussion I found no new foundation for Ms. Clarke’s concern.  The concerns regarding white nationalism, as expressed by Ms. Clarke and other civil rights advocates, have always come from a place of fear, pain, and suffering: the fear of physical violence perpetrated by a racial majority on a racial minority; the pain of past and perceived current wrongs; and the suffering endured as a result of discriminatory practices in housing, financial services, the labor markets, and the legal system.

Another eye catcher was the diverse group of constituents Ms. Clarke’s organization represents.  About 25 years ago, I visited a friend who worked for Lawyers’ Committee.  She proudly showed me around the office, sharing a little of the history of the organization’s founding; sharing with me that its roots stemmed back to a civil rights initiative by the late President John F. Kennedy to strengthen the legal protections for black people.  That initiative seems to have changed and all for the worse for blacks.

Today, the Committee’s agenda seems to have expanded.  Their agenda has broadened to include every group under the sun that claims to be marginalized: white women, the LGBTQ community, Asians, etc.  I would hazard an ironic guess that if you looked at the wealth accumulated by each of these groups in comparison to blacks that blacks would still be on the bottom of the totem poll.

When this expanded agenda combines with the factors of fear, pain, and suffering, they create a weak platform from which to launch any initiative toward black empowerment.  The platform is weak because of the limits it places on blacks. Fear does not embolden. It causes you to hesitate.  Worse, it may cause you to rely on others, particularly those others who claim that they, too, suffer from inequality, but whose agenda, history, and lineage differ from yours so drastically that when they, these other groups, see progress, they will quickly abandon you.

Most times I believe this “We are in the same boat” argument is nothing but a delay tactic, keeping the weaker group distracted long enough until the weaker group is not even left with crumbs.

Blacks are too easily distracted by emotional buzzwords ….

Groups like the Lawyers’ Committee, National Urban League, and the National Association for the Advancement of Colored People have played expertly on the fear, pain, and suffering of the black community.  They have defined “white nationalism” in emotion-invoking terms, where minorities are expected to shudder in the face of hateful language or crime.

It is expected that threats of physical harm would invoke fear, but what social justice organizations and white liberals fail to accept is that blacks can effectively defend themselves against white nationalism, and that the United States was founded on the principle of acquisition by discovery where European philosophy was deemed so superior that indigenous tribes in North America could be cleared away like so much brush.  White nationalism is global and has been handed down over the last 520 years from the original European settlers of North America to their descendants via various institutions that create the platform for this current political economy.

Yes, white nationalism is about members of the “white race” asserting their dominion over a particular political and geographical space.  But if this behavior is so offensive to blacks to where changes in that behavior is requested, then becoming emotional about whites yelling hateful words and expressing a desire for a “whites only” country won’t get blacks very far.  It is time for blacks to apply critical thinking and develop and promote legal and public policy frameworks for addressing white nationalism.

Gentrification is white nationalism …

One form of white nationalism that Blacks can cut their teeth on is the concept of gentrification.  Gentrification is more than just whites and other non-blacks moving into formerly black neighborhoods.  Gentrification is the result of favorable monetary policy that has driven down interest rates making cheap credit available while increasing the value assets such that these assets support the issue of new debt.  Rising home values and the increased down payments required for mortgages squeeze blacks out of home ownership.  The result is the creation of an environment where whites can leverage cheap capital to increase wealth through property ownership while blacks are forced, via higher property values, rents, and property taxes, to move out.

Toward a legal framework to battle poor monetary policy … 

Rather than having existing black members of Congress lead fruitless emotional belly-ache charges in the media about affordable housing, private citizens should explore and initiate where feasible the legal action necessary for modifying how the Federal Reserve, the Congress, and the Executive are regulating the economy.

For example, the Full Employment Act of 1946 as amended by the Humphrey Hawkins Act of 1978 places the responsibility of managing the American political economy in the hands of the Federal Reserve, the President, and the Congress.  Are these institutions meeting their goals pursuant to the Act? Have fiscal and monetary policy as implemented by the Federal Reserve, the President, and the Congress resulted in increased burden on black citizens?  Should there be remedies?

Conclusion: It will take bravery …

The current initiatives by so called civil rights groups are not aggressive enough.  They are driven by emotion and aim more for symbolism than substantive results.  A more robust legal approach to wealth creation is necessary if blacks are to carve out a sustainable economic niche in America.

 

 

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Capital. The true digital divide

A couple early morning thoughts on the digital divide.  So far the digital divide narrative has occupied two schools of thought that are not necessarily opposed to each other.

Race and the Digital Divide

The first school of thought revolves around race.  Given that within the black American community there is a higher level of poor households, affordability is keeping blacks from accessing the internet via high-speed broadband infrastructure.  If blacks do not have the income to sustain a broadband business model, then internet access providers are less likely to deploy facilities in poor neighborhoods.  Lack of deployment in these neighborhoods may result in a barrier to valuable information that may lead to greater economic opportunities, according to advocates seeking to close this gap.

Rural Communities and the Digital Divide

The second school of thought revolves around rural communities.  The argument is that lower population density as compared to urban areas makes deploying broadband access facilities in rural areas more expensive.  In addition, terrain, such as that faced by internet access providers in mountain states, has traditionally added to the problem of higher costs to provide broadband access facilities.

An Overlooked Divide

There is another divide, one that is often overlooked and it has to go to what is known as “first-mover advantage.” The real value generated by the internet is the ability to extract, analyze, package, and distribute information, and have that information be available digitally forever.  The focus on a gap between facilities deployed in black neighborhoods versus facilities deployed in white neighborhoods or the gap between rural community deployment versus urban community deployment goes to seeking out new suppliers of information.  The civil right veneer that has been placed over the broadband racial divide hides this supply-side characteristic from the policy debate.  It has also created the opportunity for the political left to craft an electoral package that can be sold to voters.

It is the other side of the equation, the production side, that, in my opinion holds more value.  When we look at the history of the internet, particularly the period when the internet was commercialized, its players included white venture capitalists; Web 1.0 internet service providers, i.e. AOL, CompuServ, Mindspring, etc.; and dial-up access providers such as BellSouth.

Black Americans could always access information from analog sources, i.e. television; print media; or word of mouth, but the efficient extraction, cataloging,  indexing, aggregation, and distribution of information via the internet were the domain of companies invested in and managed by whites.  As whites continued to level their first-mover advantage, this gap between producer/owner of capital and consumer continued to grow.

Capital not only seeks a vacuum, it also seeks a return.  Returns from investing in black or even rural communities were not going to be as high as returns invested in affluent neighborhoods, neighborhoods whose residents probably owned shares in the very companies that commercialized the internet in the first place.  Closing the “digital divide” means first closing the capital divide.

What will Government Do Next?

Government will do nothing from a capital perspective to close the digital divide. The Federal Communications Commission has a number of universal service funding initiatives designed to encourage mobile and fixed broadband deployment in rural areas; to facilitate the delivery of health care via broadband; and to reduce the costs incurred by low-income consumers for accessing and maintaining high-speed broadband service.  By subsidizing the consumer demand for broadband services, the Commission hopes to encourage the delivery of broadband services.  But again, the focus is on consumer demand, not bridging the capital gap.

The philosophical underpinnings of the American economy, where capital is to flow freely to its best use may prohibit government from taking any concrete action for closing a capital gap.  If blacks or rural residents had sufficient capital to purchase, construct, or maintain broadband access facilities, using their intimate knowledge of their communities to distribute services, we might see a decrease in the gap.  We should expect that government will stay on a path of incentivizing capital investment in infrastructure development versus trying to repair capital discrepancies via a capital transfer.