The Color of Money

by Mehrsa Baradaran

  117. Peniel E. Joseph, Waiting ’til the Midnight Hour: A Narrative History of Black Power in America (New York: Macmillan, 2007), 287.

  118. Robert Staples, Introduction to Black Sociology (New York: McGraw-Hill, 1976), 98.

  119. Henderson and Lebedur, “Moderate Approach,” 194.

  120. Federal Bureau of Investigation File, Roy Wilkins, Open Letter to Stokely Carmichael and Other Comments re: Subject’s Resignation from BPP https://vault.fbi .gov/Roy%20Wilkins/Roy%20Wilkins%20Part%2015%20of%2017.

  121. Weems and Randolph, “National Response,” 66; Stephen E. Ambrose, Nixon, vol. 2: The Triumph of a Politician, 1962-1972 (New York: Simon & Schuster, 1989),

  125-126.

  122. Jesse L. Jackson, “Breadbasket Leader Rejects Black Capitalism,” Muhammad Speaks, February 21, 1969; Weems, Business in Black and White, 155-156; Thomas H. Landless and Richard M. Quinn, Jesse Jackson and the Politics of Race (Ottawa, IL: Jameson, 1985), 49.

  123. Kotlowski, Nixon’s Civil Rights, 151.

  124. Weems and Randolph, “National Response,” 80-81

  125. Henderson and Lebedur, “Moderate Approach,” 170-171, 175.

  126. Weems, Business in Black and White, 136-138. Weems explains that the Nation of Islam asked the administration for federal government contracts after they endorsed the program.

  127. Cited in Warren and Rabig, Business of Black Power, 28.

  128. Kotlowski, Nixon’s Civil Rights, 150-151.

  129. U.S. Department of Labor, Bureau of Labor Statistics Report, “Blacks in the 1970’s: Did They Scale the Job Ladder?,” June 1982, https://stats.bls.gov/opub/mlr /1982/06/art5full.pdf.

  130. Kotlowski, Nixon’s Civil Rights, 261; Kenneth Bancroft Clark and John Hope Franklin, The Nineteen Eighties: Prologue and Prospect (Washington, DC: Joint Center for Political Studies, 1981), 19.

  131. For a review of black capitalism critics from the political left, see Weems, Business in Black and White, 145-155; Bernard H. Booms and James E. Ward Jr., “The Cons of Black Capitalism: Will This Policy Cure Urban Ills?,” Business Horizons 12(5) (1969): 21; Earl Ofari, The Myth of Black Capitalism (NewYork: Monthly Review Press, 1970); Hill and Rabig, Business of Black Power, 31-33.

  132. Robert L. Allen, Black Awakening in Capitalist America (Trenton, NJ: Africa World Press, 1990), 95, 191.

  133. Adam Fairclough, To Redeem the Soul of America: The Southern Christian Leadership Conference and Martin Luther KingJr. (Athens: University of Georgia Press, 2001), 393.

  134. Manning Marable, How Capitalism Underdeveloped Black America (Chicago: Haymarket Books, 2015), xxxvi (originally published 1983). Earl Ofari derides the black elite yet shows unfamiliarity with the actual state of black business when he talks about their exploitation. Ofari, Myth of Black Capitalism, 10. For analysis of Ofari’s misreading of the census numbers, see Weems, Business in Black and White, 154.

  135. Almost 60 percent of these businesses were in the South (with 30 percent being owned by women). Blaustein and Faux, Star Spangled Hustle, 61, 80.

  136. In 1968, the top twenty-one black banks held total assets of $207 million compared to over $400 billion for white banks, i.e., 2,000 times greater. Ibid., 81.

  137. As one critic recounts, these were “beauty parlors, short-order operations, and one- or two-man retail outlets which really promised very little in terms of growth." Robert Imbriano, “OMBE: The Sound of One Hand Clapping," Black Enterprise 8 (June 1978): 87-93, 188-190.

  138. Kotlowski, Nixon’s Civil Rights, 129.

  139. Daniel Mitchell, The Numbers and the Ghetto: An Opportunity for Change (Cambridge, MA: Center for Community Economic Development, 1970).

  140. Blaustein and Faux, Star Spangled Hustle, 86-87.

  141. Ibid., 86.

  142. Ibid., 101-102.

  143. James Rowe, “Bank Policies Assailed as Lax on Ghetto Aid," The Washington Post, A2, July 12, 1971.

  144. Blaustein and Faux, Star Spangled Hustle, 101.

  145. Thieblot’s study shows that “it took longer for bankers to break the all-white tradition of their industry than was required by various others, and we know that the proportion of employment which is Negro is less than the average in most other industries." Armand J. Thieblot, The Negro in the Banking Industry (Philadelphia: Wharton School of Finance and Commerce, 1970), 64-65.

  146. Ibid., 106.

  147. Ibid., 48.

  148. Ibid., 64.

  149. Ibid., 65.

  150. Ibid., 50.

  151. Ibid., 106-110.

  152. Ibid., 114. “Stevenson Raps Banks over Bias," New Pittsburgh Courier, June 24, 1967.

  153. Nicholas A. Lash, “Asymmetries in US Banking: The Role of Black-Owned Banks," in Global Divergence in Trade, Money and Policy, ed. Volbert Alexander and Hans-Helmut Kotz (Cheltenham, UK: Edward Elger, 2006), 91-110. Fifty-six of the top one hundred black-owned businesses emerged between 1969 and 1976. Kotlowski, Nixon’s Civil Rights, 150.

  154. Fred C. Allvine, “Black Business Development," Journal of Marketing34 (1970):

  2. In 1969, they numbered fewer than 30 of a total 13,762 commercial banks.

  155. Courtney N. Blackman, “An Eclectic Approach to the Problem of Black Economic Development," Review of Black Political Economy 2(1) (Fall 1971): 3-27.

  156. Mona Sarfaty, “Soul Business—Roxbury’s Unity Bank," Harvard Crimson, October 28, 1968, http://www.thecrimson.com/article/1968/10/28/soul-business -roxburys-unity-bank-pblbast-spring/.

  157. Jackie Robinson, I Never Had It Made (New York: Putnam, 1972), 184.

  158. Ibid., 207.

  159. Ibid., 189.

  160. Ibid., 186.

  161. Janet Spencer, “A Black Bank in Harlem Finds the Road Rocky," New York Times, January 6, 1974, http://www.nytimes.com/1974/01/06/archives/a-black-bank -in-harlem-finds-the-road-rocky-a-black-bank-in-harlem.html; see also Edward Cowan, “Negroes Forming Bank in Harlem," New York Times, June 30, 1963, http://query. nytimes.com/mem/archive/pdf?res=9E00E4D91430E036A05753 C3A9609C946291D6CF.

  162. Robinson, Never Had It Made, 192-193.

  163. Ibid., 195-197.

  164. Spencer, “Black Bank in Harlem"; Cowan, “Negroes Forming Bank in Harlem."

  165. An article in the Harvard Crimson explained that the bank was conceived in 1968 by John T. Hayden, a black graduate of the Harvard Business School, after he wrote a term paper about “the economic needs of the ghetto community." He contacted Donald E. Sneed, who was active in civil rights boycotts and owned a real estate company in Roxbury. The Unity Bank Association consisted of eighty-eight organizers who were active community leaders. Sarfaty, “Soul Business."

  166. Rana Foroohar, Makers and Takers: The Rise and the Fall of American Business (New York: Crown, 2016), 48, 49.

  167. Andrew Brimmer, “Trouble with Black Capitalism," Nation’s Business, May 1969, 79.

  168. Kotlowski, Nixon’s Civil Rights, 139.

  169. Weems and Randolph, “National Response," 76; Brimmer, “Trouble with Black Capitalism," 57, 78-79; Andrew Brimmer, “Economic Integration and the Progress of the Negro Community," Ebony 25 (August 1970): 118-121.

  170. Weems and Randolph, National Response.

  171. Andrew F. Brimmer, “The Black Banks: An Assessment of Performance and Prospects," Journal of Finance 26(2) (May 1970): 400-402.

  172. Ibid., 387.

  173. Brimmer, “Black Banks," 383-386.

  174. Gregory Price, “The Cost of Government Deposits for Black-Owned Commercial Banks," Review of Black Political Economy 23(1) (June 1994): 9-24; Gregory N. Price, “Minority Owned Banks: History and Trends," Federal Reserve Bank of Cleveland Economic Commentary, July 1, 1990.

  175. Ronald A. Ratti, “Pledging Requirements and Bank Asset Portfolios," Federal Reserve Bank of Kansas City Economic Review, September-October 1979, https:// www.kansascityfed.org/PUBLICAT/ECONREV/EconRevArchive/1979/3 -4q79ratt.pdf.

  176. “All studies of Black-owned banks have noted the large portion of funds k
ept in highly liquid assets, primarily U.S. government obligation." Timothy Bates and William Bradford, “An Analysis of the Portfolio Behavior of Black-Owned Commercial Banks," Journal of Finance 35 (1980): 755n4, citing a sample showing nonminority banks held 29.5 percent in highly liquid forms, compared to 46.5 percent of minority banks in the same model.

  177. Lash, “Asymmetries in US Banking"; Irons, “Black Banking," 424; Bates and Bradford, “Analysis of Portfolio Behavior"; Edward C. Lawrence, “The Viability of Minority-Owned Banks," Quarterly Review of Economics and Finance 37(1) (1997): 1-21.

  178. Lash, “Asymmetries in US Banking," 99; John T. Boorman, “The Prospect for Minority-Owned Commercial Banks: A Comparative Performance Analysis," Journal of Bank Research 4(2) (1974): 263-279.

  179. Andrew Brimmer, “Recent Developments in Black Banking: 1970-1971," Review ofBlack Political Economy 3(1) (1972): 58-73.

  180. Brimmer, “Black Banks," 390; Lawrence, “Viability of Minority-Owned Banks,"

  1-21.

  181. Brimmer, “Black Banks," 390.

  182. Brimmer concluded that the buying of so much in government securities by black banks was part of “the normal quest for diversification" and demonstrated “an effort on the part of the banks to minimize the exceptionally high risk of lending in the ghetto." Ibid., 299.

  183. Irons, “Black Banking."

  184. “The ghetto is dependent on one basic export," according to Tabb, “its unskilled labor power." William K. Tabb, The Political Economy of the Black Ghetto (New York: W. W Norton, 1970), 22.

  185. Economist Lester Thurow explains that in the event the dominant group did trade due to social or economic pressure, they did so as “a discriminating monopolist.” Lester C. Thurow, Poverty and Discrimination (Washington, DC: Brookings Institution, 1969), 117.

  186. Kotlowski, Nixon’s Civil Rights, 156.

  187. Cross, “White Paper on Black Capitalism.”

  188. Adam Smith, The Wealth of Nations (Cambridge, MA: Hackett Publishing Co., 1993), 132.

  189. George Simmel, The Philosophy of Money (London: Routledge, 2004), 447.

  190. Karl Marx, Selected Writings: The Communist Manifest (Oxford: Oxford University Press, 1977), 247.

  191. Jacob Hacker and Paul Pierson, American Amnesia: How the War on Government Led Us to Forget What Made America Prosper (New York: Simon & Schuster, 2016).

  192. Perlstein, Nixonland, chap. 23. David J. Garrow, “The FBI and Martin Luther King,” Atlantic, August 2002.

  193. Martin Luther King Jr., The Autobiography of Martin Luther King, Jr., ed. Clay-borne Carson (New York: Warner, 1998), 351.

  194. Taylor Branch, Parting the Waters: America in the King Years, 1954-63 (New York: Simon & Schuster, 1988), 563.

  195. Peniel E. Joseph, Stokely: A Life (New York: Civitas, 2014), 209.

  196. Henderson and Lebedur, “Moderate Approach,” 198.

  197. Harold Cruse, quoted in Booker T. Washington and His Critics: Black Leadership in Crisis, ed. Edwin M. Epstein and David R. Hampton (Encino, CA: Dickenson,

  1971), 236.

  198. Ibid. Interview with Daniel Watts, New York City, July 18, 1968.

  199. Letter from Alan Greenspan to candidate Nixon, Nixon Presidential Library files, Subject: The Urban Riots of the 1960s, September 26, 1967.

  200. Milton Friedman, Capitalism and Freedom (Chicago: Chicago University Press, 1962), 109-115.

  201. The only exception was when black collective action increased the cost of discrimination by staging large-scale boycotts, but that was hardly what Friedman was referring to.

  202. Justin Fox recounts the rise and eventual fall of rational and efficient market theories and the Chicago school’s embrace of them. Justin Fox, The Myth of the Rational Markets: A History of Risk, Reward, and Delusion on Wall Street (New York: Harper, 2009).

  203. See generally, E. J. Dionne Jr., Why the Right Went Wrong: Conservatism—From Goldwater to Trump and Beyond (New York: Simon & Schuster, 2016). Dionne makes the case that the modern Republican Party is essentially the party of Goldwater.

  204. “Goldwater’s conservatism operated in the South less like a genuine political ideology and more like Wallace’s soft porn racism: as a set of codes that voters readily understood as defending white supremacy. Goldwater didn’t win the South as a small-government libertarian, but as a racist.” Ian Hanley Lopez, Dog Whistle Politics: How Coded Racial Appeals Have Reinvented Racism and Wrecked the Middle Class (Oxford: Oxford University Press, 2014), 17-22.

  205. The John Birch Society was an example of the early alliance between segregationists like Wallace with libertarianism. Another link was John Olin, who began to funnel money toward libertarian organizations, including his own Olin Foundation and the Federalist Society, after witnessing the 1969 takeover of the Cornell campus by a black power group during alumni weekend. Olin also funded Charles Murray’s research, which produced several tracts on racial inferiority, including The Bell Curve. Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Radical Right (New York: Penguin, 2016), 94-111, 167-196.

  206. “Lee Atwater’s Infamous 1981 Interview on the Southern Strategy," Video, Nation, https://www.youtube.com/watch?v=X_8E3ENrKrQ.

  207. James Kwak, Introduction, Economism: Bad Economics and the Rise of Inequality (New York: Pantheon Books, 2017).

  208. Ronald Reagan, “Address to the Nation on United States-Soviet Relations," September 29, 2014, The American Presidency Project, http://www.presidency.ucsb .edu/ws/?pid=40457.

  209. “Security from domestic violence, no less than from foreign aggression, is the most elementary and fundamental purpose of any government, and a government that cannot fulfill that purpose is one that cannot long command the loyalty of its citizens." Barry Goldwater, “Speech Accepting 1964 Republican Presidential Nomination," July 16, 2014, http://www.washingtonpost.com/wp -srv/politics/daily/may98/goldwaterspeech.htm.

  210. Joseph, Stokely, 225.

  211. “Goldwater . . . aggressively exploited the riots and fears of black crime, laying the foundation for the ‘get tough on crime’ movement." Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (New York: The New Press, 2010), 42. See also, Lopez, Dog Whistle Politics, 19.

  212. Sabrina Jones and Marc Mauer, Race to Incarcerate: A Graphic Retelling (New York: The New Press, 2013), 29.

  Chapter 7 The Free Market Confronts Black Poverty

  1. Rick Perlstein, The Invisible Bridge: The Fall of Nixon and the Rise of Reagan (New York: Simon & Schuster, 2014), 628, 695.

  2. “There is a limit to what can be accomplished by laws and regulations, and I seriously question whether anything additional is needed in that line." Ronald Reagan, “Remarks on Signing the Bill Making the Birthday of Martin Luther King, Jr., a National Holiday," November 2, 1983, http://www.presidency.ucsb .edu/ws/?pid=40708.

  3. Ronald Reagan, “Opening Speech of the 1966 Gubernatorial Campaign," reported in The Courier-Journal, January 5, 1966, A12.

  4. See Ronald Reagan, A Time for Choosing: The Speeches of Ronald Reagan (Chicago: Regnery Gateway, 1983), 47.

  5. Josh Levin, “The Welfare Queen," Slate, December 19, 2013, http://www.slate .com/articles/news_and_politics/history/2013/12/linda_taylor_welfare _queen_ronald_reagan_made_her_a_notorious_american_villain.html. “As of 1986, white households received 90.5 percent of all non-means-tested transfers and 63.4 percent of means-tested payments, while black households receive only 8.2 percent of non-means-tested payments but 2.3 percent of means tested payments. These differences are especially pronounced for black women who head families by themselves: just 3 percent receive a non-means-tested benefit." Michael K. Brown, Race, Money, and the American Welfare State (Ithaca, NY: Cornell University Press, 1999), 11.

  6. Jeremy Mayer, Running on Race: Racial Politics in Presidential Campaigns, 19602000 (New York: Random House, 2002), 71.

  7. Michelle Alexander claims that “the drug war from the outset had little
to do with public concern about drugs and much to do with public concern about race." Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (New York: The New Press, 2010), 49.

  8. Newt Gingrich admits that the war on crime unfairly targeted black drug crimes and punished them much more harshly, resulting in higher rates of imprisonment. Ava DuVernay and Spencer Averick, Thirteenth, Netflix Documentary, 2016.

  9. David M. Kennedy, Don’t Shoot: One Man, a Street Fellowship, and the End ofVio-lence in Inner-City America (New York: Bloomsbury, 2011), 10.

  10. Alexander, New Jim Crow, 52.

  11. Adam Walinsky, “Crack as Scapegoat," New York Times, September 16, 1986, http://www.nytimes.com/1986/09/16/opinion/crack-as-a-scapegoat.html.

  12. Jill Leovy, Ghettoside: A True Story of Murder in America (New York: Spiegel and Gran, 2015).

  13. Ibid., 8.

  14. James Baldwin, The Fire Next Time (New York: Vintage International 1963), 21.

  15. Richard L. Berke, “In 1992, Willie Horton Is Democrats’ Weapon," New York Times, August 25, 1992, http://www.nytimes.com/1992/08/25/us/the-1992-campaign -political-week-in-1992-willie-horton-is-democrats-weapon.html.

  16. Fox Butterfield, “Study Finds Big Increase in Black Men as Inmates since 1980," New York Times, August 28, 2002, http://www.nytimes.com/2002/08/28/us /study-finds-big-increase-in-black-men-as-inmates-since-1980.html.

  17. Alexander, New Jim Crow, 180.

  18. “Excerpts from Clinton’s Speech to Black Ministers," New York Times, November 14, 1993, http://www.nytimes.com/1993/11/14/us/excerpts-from-clinton -s-speech-to-black-ministers.html?pagewanted=all.

  19. Ford handwritten comment, “Q&A for American Newspaper Reception," April 13, 1976, Box 24, Presidential Handwriting File, GRFL; Washington Post, April 11, 1976, C7. In the 1980s, 90 percent of whites surveyed in a few suburban cities still agreed with this statement: “White people have a right to keep blacks out of their neighborhoods." Douglas S. Massey and Nancy A. Denton, American Apartheid: Segregation and the Making of the Underclass (Cambridge, MA: Harvard University Press, 1998), 110.

  20. Massey and Denton, American Apartheid, 207, 213; Nikole Hannah-Jones, “Living Apart: How the Government Betrayed a Landmark Civil Rights Law," Pro-Publica, June 25, 2015, https://www.propublica.org/article/living-apart-how -the-government-betrayed-a-landmark-civil-rights-law.