If America is currently facing a recession, the Black community is experiencing a depression, members of the Congressional Black Caucus said last week.
A Congressional Black Caucus Institute (CBCI) town hall forum was held Monday, October 13, at Minneapolis Park and Recreation Board headquarters in North Minneapolis. “It is important to African Americans to have their issues heard in the public policy arena,” said U.S. Rep. Bennie Thompson of Mississippi, CBCI chairman.
A similar town hall forum was held in Denver during the Democratic convention in August, but weather problems forced the group to postpone a scheduled meeting during the Republican convention in September, Thompson said. “We wanted to do something in the Minneapolis area [as well],” he pointed out.
Mostly the economy, employment and housing were discussed during the three-hour meeting by community business persons, local elected officials, and the Washington lawmakers, who also included Minnesota Fifth District U.S. Rep. Keith Ellison serving as host. “Keith Ellison did a marvelous job in bringing all these different groups together,” said Rep. Emmanuel Cleaver of Missouri.
The visiting lawmakers also toured the Northside, where high foreclosures, violent crime and unemployment “are serious issues here,” according to Minneapolis Mayor R.T. Rybak. “We want you to look at North Minneapolis as a microcosm of where America can and needs to go,” said the mayor. “We are not treating everyone in Minneapolis equally right now.”
The current financial crisis adversely affects Blacks, noted Rep. Gwen Moore of California. “[The U.S.] is in a recession, but the Black community is in a depression,” she said.
She argued against those who blame Fannie Mae, the nation’s financing source for home mortgage financing, especially when it provided $129 billion in financing to Blacks since 1994. “Fannie [Mae] and Freddie [Mac] certainly did some awful things in terms of cooking their books and hiding their losses,”
Moore pointed out, adding that the two organizations did make about two percent of “those toxic loans.”
“Now the other side is blaming Freddy Mac and Fannie Mae because these were programs that were established to allow people at the lower section of the income [brackets] to own the American Dream,” concurred Rep. Diane Watson of Wisconsin.
City First Bank of D.C. President and CEO Dorothy Bridges also railed against those who blame the Community Reinvestment Act, which also helped low-income people to buy homes. “It has been difficult for our community [to receive bank loans] for a very long time, but this economic crisis makes it even more difficult,” she pointed out, adding that there is a need for “innovative opportunities and ways to reach people in our community.”
Blacks and low-income people aren’t to blame, Cleaver noted. “We are in a big mess because of greed,” he pointed out.
The folk on Wall Street “helped create the problem,” said Thompson.
“There is enough blame to go around,” Bridges said.
“I believe that the crisis we are experiencing is caused by many factors,” Rep. Danny Davis of Illinois pointed out, adding that “too much of the resources in our country is in the hands of too few.”
Nonetheless, Congress should fully investigate how the financial crisis came about in the first place, suggested Piper Jaffrey Managing Director of Alternative Investments Lois Quam. “I think it is going to be very important to get to the root causes of this so that we can define the expected response [and see] that it doesn’t happen again.”
Although each lawmaker said that they eventually voted for the second $700 billion bailout plan, for various reasons they voted against the first bill.
“We [first] were told on a Friday that we had a serious financial crisis, that the markets had frozen and this thing would be spreading to entire communities in short order,” Ellison recalled. “Then next, they gave us a bill that was three pages long in which judicial review, oversight, and conflict of interest [provisions] were waived.”
It lacked too many things such as homeowner and taxpayer protection and “strong oversight [provisions],” Ellison added.
“I didn’t support the bill because I did not feel we should give $700 billion of your taxpayer dollars to the people who got us in this mess,” said Watson, who admitted that the second bailout package introduced by the U.S. Senate “was sweetened” but still has “some very serious flaws.”
Cleaver, a former Kansas City, Missouri, mayor, added that he wanted a “bankruptcy clause” to be included, but a strong lobbying effort by the banking industry kept it out.
A lame-duck congressional session most likely will be held after the November elections, possibly to design a new financial stimulus package, said Thompson.
“That stimulus package could have just about anything in it if it could jump-start the economy. There are a number of things we could look at.”
“We have to remodel the financial structure of America,” said Ellison. “It cannot be a top-down process.” He also urged that the federal government be wise in buying back bad loans and securities.
“No matter who wins the presidency, the budget priorities will be really tight,” Moore observed. “We are going to have to put together a regulatory framework that provides some stimulus for small, minority- [and] women-owned businesses.”
“We won’t be able to regulate ourselves out of the crisis,” added Davis.
Congress or the next president can’t solve this program alone, Ellison believes: “Citizens are the captains of government — we are the ones to do what you say do. Let’s work together to move ourselves forward,” he said.
Financial institutions aren’t going to stop giving out bad loans, Cleaver asserted. “These sub-prime loans are still legal in the United States,” he said, adding that “financial literacy” must be taught in the Black community. “We have to teach people not to have bad credit.”
“We have a community now that is credit damaged,” said former Minneapolis city council member Natalie Johnson Lee.
How long will this crisis last? “Based on everything I am hearing, we’re in this for a while,” Bridges pointed out.
“Many people have lost their homes and are losing their homes because they don’t have jobs. They don’t have money,” said Davis.
“When we left Washington, a lot of people had illusions that the legislation that was passed has fixed the problem,” Thompson concluded. “What you have seen in the last few weeks is only the beginning. We are in a crisis point in this country.”
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