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MELTDOWN! When Economy Sneezes, Black America Gets Pneumonia

Amsterdam News, News Analysis, Herb Boyd Posted: Sep 29, 2008

When the Great Depression crippled the U.S. and the world economy in the 1930s, many Black Americans hardly knew the difference, since they had been mired for so long at the bottom of the economic ladder.

While the current Wall Street meltdown bears a number of similarities with the plight in the past, many Black Americans will feel its tremors far more directly. No, some of the current and former corporate leaders will not sufferfor example, E. Stanley ONeal, once the CEO of Merrill Lynch, which was recently absorbed by Bank of Americawatched his stock ownership plummet from $127.7 million to just a little over $40 million.

The rest of Black America should have the same problem. When you consider that the majority of Black Americans live from paycheck to paycheck, any disturbance in the marketplace or in the world of finance is more than a ripple effectit can be a tsunami.

An old axiom pretty much sums up of the situation for most Black Americans: When the U.S. economy sneezes, Black America comes down with pneumonia. Weeks, months and years before the calamity on Wall Street, Black America was in desperate straits and tottering on the brink of economic collapse.

It was recently reported there were nearly 2 million African-Americans without a job. Heaven only knows what margin of error that report has, but its a good bet that when they tabulate Central Harlem, particularly among Black men between the ages of 18 and 34,those figures will be dramatically higher. It goes without saying that when theres an eruption at the top of the financial pyramid, the fault lines reach to the bottom, and employment, housing, cost of living and other factors will gravely affect the lifestyle and existence of Black Americans.

Longtime activist and labor leader Bill Fletcher assessed the situation this way during a recent appearance on Democracy Now!: What it means, he began, stretching the discussion beyond race and into larger, working-class terms, is that the whole illusion that we have something called a free-market economy is gone.

I mean, here we have for years been subject to this propaganda blitz regarding deregulation and that regulations have hurt the economy. And now what were seeing is an implosion, an implosion that government is prepared to respond to by assisting corporations.

But there has beenthis situation has been disastrous for workersand not just in the most recent pastworkers and farmers, actually, if you go back to the 1980s. Fletcher, like several economists, believes the bailout has a double standard whereby the rich corporations have the government as a safety net and the rest are left to fend for themselves. But for working people, for farmers in the 1980s in the Midwest, for working people more generally, when they are being squeezed, he explained, the political operatives that represent the interests of big business step in and say, No, no, no, no. You are not entitled to a bailout. You are not entitled to welfare. You are basically out of luck. And just as you described, during a period when we were perhaps a little bit more stable economically, the Republicans were able to move that legislation in that in fact restricted the ability of regular people to declare bankruptcy.

Main Street America, Fletcher continued, is suffering as a result of the irresponsible, absolutely irresponsible, investments in game planning, playing by these individuals. And what happens? Government is forced to bail them out. Otherwise, we are in complete meltdown.

Former Secretary of Labor Alexis Herman agreed with Fletcher and added, At a time when oil companies, such as Exxon Mobil are earning record profits of more than $12 billion a quarter, African-Americans are spending 30 percent more on energy costs than any other group in the country. She said that a person working a fulltime, minimum-wage job now has to work an entire eight-hour day plus overtime just to put a tank of gas in their car. And this is presuming you are lucky enough to have even a part-time joband a car.

The Black middle class and those gainfully employed with their income enhanced by pensions shouldnt lose too much sleep. According to several notable economists, your benefits are defined by law and no matter how poorly the pension funds perform, [you] will still get your full monthly checks. But in some cases, taxpayers will have to pay more into the funds to cover the shortfalls. Meanwhile, those unemployed and underemployed should watch out for falling debris as the nations financial roof is flying apart.

Related Articles:

Desperation Moves from Wall Street to Main Street

Poverty in America, A National Disgrace

Outrage at Mother of all Bailouts

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