Can black spending end the depression?



I found this article's premise to be a pretty amusing, yet intriguing perspective. To me it was almost like a musing on black economics and black nationalism -- the good and the bad -- mixed with some present day politics. It was written by my friend's brother. I'm still not sure if it's meant to make you laugh or cry though. Here's his bio and a short intro to the piece that he wrote for us:

Kamid Mosby is a former L.B.J intern (during the 98th Congress) for U.S. Congressman William Clay (D-MO), where he served as a staffer for the Full Committee, Post Office and Civil Service. He's also served as a U.S. Legislative Correspondent to Congressman John Lewis (D-GA). He is now an independent producer and talent manager living in Los Angeles, CA.

"I have to first thank my sister for reaching out to her friends at The Liberator Magazine who found the piece funny, yet enlightening enough to publish. I also want to personally thank them for the bonus Dave Chapelle footage which really added a hilarious depiction of what I think we all fear may occur if we were to conceivably be granted that 'unkept promise' from Congress. Also many thanks to my friend and former co-worker on Capitol Hill, Tony Cornelious who contributed his unmatched editing skills to help tweak my thoughts to perfection. Last, I have to thank my compadre and also former Congressional Staffmember Gene Quarells for being my sounding board and allowing me to rant on about The BOSS consequently influencing me to bring my ideas to life through words. I hope you all enjoy the piece while not overlooking the power and importance of the individual or collectives' spoken and written word. Best Regards, ~Kamid"


Can America Benefit from the BOSS [Black Optional Spending Stimulus]?: Last week America experienced "Bloody Monday" where over 71,400 jobs were lost and massive layoffs have reached a 7 year high with 100,000+ jobs being lost while shameful reports that the New York financial world garnered an estimated $18.4 billion in bonuses alone last year. In particular, these are especially difficult economic times for African Americans, for whom the unemployment rate is more than 10%. Ironically, rather than conserve and save, the response in the African American community is to spend more.

Throughout many black neighborhoods you are likely to see expensive new cars and designer brand clothes. Now with the nation's top banks, the big 3 auto makers and recently the whispers of the porn industry all seeking bailouts from Congress, what is preventing hardworking everyday American citizens from setting up Congressional face time with the incoming Secretary of Treasury Timothy Geithner to plea their respective cases for a bailout?

There are 38.8 million African Americans living in the United States. As an American, I am equally affected by the recession and feel dually responsible for the current state of our American economy. Blacks make up less than 13% of the population while contributing more than $744 billion dollars annually into the system thus, making us one of the worlds largest homogeneous consumer groups disproportionately second behind Hispanics.

Jeff Humphreys, director of the Selig Center for Economic Growth at the University of Georgia's Terry College of Business, reported in August that U.S. Black buying power will total $845 billion in 2007 and is projected to top $1.1 trillion by 2012. Much of black consumers' $744 billion in income was spent on apparel, entertainment, food, beverages, toys, computers, cosmetics, automobiles and travel.

The fiasco of Hurricane Katrina presented case studies on the spending habits of relief funds given by the Federal Emergency Management Agency (FEMA) to the many Black victims of that horrible scar of shame on this nation's history. As reported by the GAO to the US Congress, about $1 billion in relief allocated to victims of Hurricane Katrina was lost to fraud, with bogus claimants spending the money on trips to Hawaii, football tickets, diamond jewelery and Girls Gone Wild porn videos.

The FEMA debit cards turned out to be an easy mark for those bent on spending. Among some of the other charges the GAO found were $3,700 on a diamond watch, earrings and ring, a one-week all inclusive holiday in the Dominican Republic, $200 of Dom Perignon champagne, fireworks, $1,000 for a Houston divorce lawyer, and a considerable amount for adult erotica. FEMA recovered some of the misused funds; however, the agency remains unable to account for 381 debit cards worth about $760,000. Although fraudulently spent, one has to question if the use of these funds somehow helped to stimulate a fraction of OUR economy vs. the $10 billion per month spent in Iraq.

As noted by author and writer Yolanda Young, many of the favorite purchases of African Americans are cars and liquor. Blacks account for 30% of the country's Scotch consumption. Detroit, which is 80% black, is the world's top market for cognac. The giant car maker Lincoln was also impressed enough with the $46.7 billion that blacks spent on cars that the automaker commissioned Sean "P. Diddy" Combs, the entertainment and fashion mogul, has been commissioned to design a limited-edition Navigator replete with six plasma screens, three DVD players and a Sony PlayStation while General Motors was quick to tap Rap mogul 50 Cent for its Pontiac G8 GXP Sports truck.

According to Target Market, a company that tracks Black consumer spending, Blacks spend a significant amount of their income on products that depreciate in value. In 2002, the year the economy nose-dived; Blacks spent $22.9 billion on clothes, $3.2 billion on electronics and $11.6 billion on furniture to put into homes that, in many cases, were rented.

With stern support from several national organizations, think-tanks and groups like the Congressional Black Caucus, 100 Black Men of America, NAACP, National Urban League, Black churches (i.e. The Baptist Church, SCLC) HBCU's and The Pan Hellenic Counsel, the Black community's leadership should be preparing to address the U.S. Congress and the Secretary of the Treasury Tim Geithner asking for a $19 billion dollar Black Optional Spending Stimulus bailout for Black men, single black mothers and black families.

Unlike the TARP bailout which was supported by Congress and was promised to help boost the economy, the BOSS will go directly into the hands of the world's largest consumer group which will guarantee the success of putting the money directly back into the economy, thus stimulating its growth. Perhaps if we redirected the auto industry's bailout and assumed the porn industry's bailout into the BOSS, then there would be no need to bailout the Big 3 or porn industry as the past has shown, the Black community would certainly bail them out as well.

Clearly, higher rates of unemployment, income disparity and credit discrimination are financial obstacles for the economic vitality of Blacks in America. However, for the good of our nation, this would be an opportunity to help "jump-start" the national economy while helping America get on the right track and begin using one of its oldest and finest natural resources, Black people, in a more justifiable manor.

As we usher in the era of this New American Century with hopes of becoming a "Greener Nation" by using our natural resources, I submit that a Black Optional Spending Stimulus Package is a viable solution to be considered which takes Black America's current negative spending reality and helps to create a positive natural stimulus solution.

With regards to the payment and disbursement of the BOSS; designated government agencies along with all of the aforementioned organizations would be responsible for helping to organize the disbursement of the checks to those who qualify. Money not claimed or willingly accepted should be put back into the public school system for higher teachers pay, books & building repairs.

Below is a short list of the TOP 5 Expenditures of the Black community. If the BOSS were to be granted by Congress, we should expect for each of these areas to be directly affected.

Top Five Expenditures:
- Housing $110.2 bn.
- Food $53.8 bn.
- Cars/Trucks $28.7 bn.
- Clothing $22.0 bn.
- Health Care $17.9 bn.

Sited Sources:
*Ben Feller, AP writer (2009, January 29th). Obama calls $18B in Wall Street bonuses shameful. Yahoo News. Retrieved January 29th, 2009, from http://news.yahoo.com/s/ap/20090129/ap_on_go_pr_wh/obama_bonuses

* The Buying Power of Black America. Target Market. Retrieved January 15th, 2009, from http://targetmarketnews.com/BuyingPower05.htm and http://targetmarketnews.com/buyingpowerstats.htm

* Yolanda Young, (2004, April 1). Tough Choices for tough times. USA Today. Retrieved January 15th, 2009, from http://www.usatoday.com/news/opinion/editorials/2004-04-01-young_x.htm

* Guardian News & Media, (2006, June 14th). Fraudsters Stole $1bn of Hurricane Katrina Relief Cash, Congress Told. Buzzel.com Retrieved January 15th, 2009 from http://www.buzzle.com/editorials/6-14-2006-99277.asp

*Charles Hallman, (2008 January 10th). By 2011 Black Buying Power to Hit Trillion-Dollar Mark. New American Media. Retrieved January 28th, 2009 from http://news.newamericamedia.org/news/view_article.html?article_id=990c03344a0ec68e9edcfcaaa70e7563