I've said many times that we live in an era of "economic illiteracy." With that in mind, I'm pleased to present - - and I hope you will contemplate - - the wisdom of Dr. B.B. Robinson...
Finding Financial Security Through Old-School Wisdom
Isn't it rich when something that was drilled into your head when you were a child starts making perfect sense? For me, it was Proverbs 4:7 - "Wisdom is the principal thing, therefore get wisdom: and with all thy getting, get understanding." During the current economic crisis, this advice is especially relevant.
Black Americans appear to have been disproportionately affected by the subprime loan crisis. Consider that, according to a study by the National Community Reinvestment Coalition, subprime mortgage loans were more prevalent than prime loans among blacks in 98.5 percent of 331 metropolitan areas surveyed in 2003. Why were subprime loans so prevalent? Where were the warnings? Passage of the Community Reinvestment Act - which essentially required increased diversity in lending - and other easy money lending policies were catalysts for increased subprime lending. Motivated by profit, mortgage companies aggressively marketed subprime loans to financially-questionable Americans, black and white, who snapped them up. Business is about contracts, and subprime mortgages were contracts stacked against the uninitiated and unaware.
After becoming sick due to the consumption of subprime loans, the nation is now turning to economists for healing. If economists are supposed to be able to prescribe a cure, why didn't they warn us about them at the outset? Specifically, where were the black economists? Why didn't they sound the alarm so that black Americans could avoid the subprime loan trap in the first place?
For many black economists - and white economists for that matter - it was not a case of knowing and not telling. It was more a case of not realizing the problem until it was too late. Like other disciplines, economics is compartmentalized. Unless one specializes in financial economics, one wouldn't necessarily be familiar with or focusing on developments in the financial markets. Too many black economists instead specialize in labor economics and focus on employment discrimination. These black economists do a lot of getting, but they aren't getting a balanced understanding.
Subprime mortgages were a creation of the financial sector. As a member of the National Economic Association, an association of black economists, I know that the number of black financial economists is miniscule. Black economists missed the warning signs. Now, who's responsible for saving those harmed in black America? How about individual responsibility?
Those in trouble should fend for themselves. Don't look for black economists to come to the rescue. They didn't in the past, so why expect them now? Thankfully, there is a means to get out of this crisis. It's easy to say, "That stuff is too complicated - only the experts understand it." How, then, did the experts learn it? They either taught themselves or were taught. But, even with good teachers, it is often better to do your own research and develop your own methods of problem solving.
The idea that one should not practice on their own behalf - that is, serve as your own doctor or lawyer - does not necessarily apply to financial matters. Learn the basics. Keep to simple practices. Avoid complex investment schemes such as derivatives and subprime loans unless you completely understand them. If you follow sound economic and financial principles, you can help solve any financial crisis you may face. Avoid the "suffering servant," "victim" and "I-need-an-expert" mentalities.
Endeavor to learn the basics of the financial system, as it will give you a better chance of weathering the storm. Not only will this course allow you to gain knowledge, but also get you the proper wisdom and understanding necessary to survive and thrive economically.
# # # B.B. Robinson, Ph.D. is a member of the national advisory council of the black leadership network Project 21. You can visit his website at www.blackeconomics.org. Comments may be sent to Project21@nationalcenter.org.
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I enjoyed your use of proverbs. Great resource there. Creation/Life also gives us a great resource on understanding the present financial situation. Really very simple - Life or better termed as Universal Principles - Living Principles - God's Socialism.
This Financial Crisis began a long time before America was “discovered”, long before the British Isles were settled, in fact so long ago that many of us have forgotten. It was when humanity first made the decision that Land could be considered personal property and belonged in the marketplace as a commodity when in fact Land is a necessary component of Life and therefore a Birthright. Food and materials for clothing and shelter all originate from Land. In fact Land is where the majority of wealth producing goods originate. Along with Oxygen and Water, Land is a necessary component of Life and therefore a Birthright of every human being. All “great” societies have met their demise due to the neglect of this simple fact. There are Inherent Laws designed into the system which are impossible to avoid. Creator's Rules dont' ya know. When we learn to honor the contract of Life and build our social structure upon that Sacred Foundation we will reap that everlasting social construct. Land is a Universal Birthright!
There is a principle called Ockham's razor which is attributed to the 14th-century English logician and Franciscan friar, William of Ockham. It basically states that – "All other things being equal, the simplest solution is the best."
The following are two simple ideas that effectively create the ideal social construct.
Simple Idea #1
1. Socialize ALL Land (True Socialism defined as the vesting of ownership of Land back in the community as a whole. None of us created it anyway so how can we possibly claim ownership of it)
2. Charge leases on ALL Land based on current market prices.
3. Return 100% of the resulting revenue equally to every man, woman and child (no matter their financial status) in the form of a yearly Land Dividend check.
4. Make the Universal Birthright of Land an Everlasting Standard in the education/understanding of every human being.
This effectively makes the average piece of Land Free for every Living Soul and restores our Natural Birthright as well as coupling our social construct to the Principles of Life.
Simple Idea #2
1. Remove ALL FORMS of taxation
2. Implement a Tax on ALL NEW goods based on the resources they contain and the resources they use in production and delivery (this can easily be implemented with the current barcode system used at the checkout)
3. Use this system to encourage/discourage various resource usages (High tax on non-renewable/ecosystem damaging products and low/no tax on renewable/ecosystem enhancing products) and to encourage purchasing of local products.
4. Use the resulting revenue to fund infrastructure expenses and the restoration of ecosystems.
This effectively encourages the creation/use of longer lasting, high quality products as well as encouraging recycling and reuse of existing products while also establishing a compatible relationship with the ecosystem.
Idea #2 effectively constrains the ravaging appetite of the capitalistic consumer society within the Boundaries of Sustainability while Idea #1 effectively encloses both Sustainability and capitalism within the Principles of Life.
That's it! The path to True Democracy (rule by the people) – True Liberty (Freedom of expression) – True Socialism (Universal Birthright of Life). Simple and Effective
Scott
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