Thumbs Up, Thumbs Down

Fresno Bee

Thumbs up to Ben Benavidez, a longtime Valley activist who was honored last week in Los Angeles for his work in advocating for minority civil and economic rights. Benavidez received a lifetime achievement award at a reception for the annual economic summit for the Greenlining Institute, a national policy and leadership organization that promotes racial and economic justice. Benavidez, 64, is the president emeritus of the Mexican American Political Association.

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This Bill Could Make Predatory Lending Worse. Gov. Brown Must Veto It

Sacramento Bee
By Orson Aguilar

Legislators had a chance to protect Californians from predatory lenders, but instead sent a special-interest bill to the governor that threatens to expand the damage.

Gov. Jerry Brown should veto Assembly Bill 237 promptly.

AB 237 expands the use of unlicensed and unregulated brokers, called “finders,” who are allowed to operate under the Small Dollar Pilot Program, which is aimed at helping people repair or build credit with loans for small amounts.

The bill expands the program from loans of $2,500 up to $7,500 and allows for using finders for these larger loans. It has been pushed by just one company, INSIKT, whose business model relies on finders.

But finders have not worked out as originally hoped. Legislators originally thought finders would be credit unions or community banks that refer borrowers to the pilot loan program if they do not qualify for a lower cost loan.

In fact, most finders are check cashing stores, grocery stores and even payday lenders. We worry that through these finders, payday lenders can sell borrowers loans that carry triple-digit interest rates. These sorts of loans do not help people build credit. Instead they trap people in a cycle of debt.

The sponsor of this bill could offer lower-cost loans today just by using licensed brokers instead of unlicensed finders, but has chosen not to.

Instead of AB 237, California should catch up with 28 other states and set an interest rate cap for loans above $2,500.

More than 100 civil rights and faith-based organizations across the state rallied behind AB 2500, a bill to limit interest rates at 36 percent for loans from $2,500 to $5,000. The payday lending industry spent more than $1.5 million lobbying against this bill,and it failed to get through the Assembly, essentially kicking this issue down the road for the second time in two years. The predatory lenders won.

For years, Californians most hurt by predatory lending have asked the Legislature to rein in high-cost, abusive loans. And every year the same thing happens: Legislators side with predatory lenders.

If AB 237 becomes law, it will only benefit Wall Street hedge funds making loans under a pilot program that has insufficient protections against abuse. The governor should veto this bad bill, and next year legislators should get to work on real reforms.

There's a Business Case for Board Diversity

American Banker

By Kenneth A. Macias and Preeti Vissa

The banking industry is getting more scrutiny. That scrutiny can and should include a look at who is in charge.

The Greenlining Institute’s latest report on the diversity (or lack thereof) of bank boards focused on nine major institutions with a large presence in California — household names like Citi, Bank of America and Goldman Sachs.

Simply put, the people running most of these big banks don’t look much like America. Continue reading “There's a Business Case for Board Diversity”

The World's Richest Company Pays a Lower Tax Rate Than You Do

The Huffington Post
by: Preeti Vissa

My job involves spending most of my time trying to figure out how those with the least can begin to build a bit of wealth and start to acquire a small piece of the American dream. That means trying to find ways to level the playing field, so that all families and communities have enough access to the assets and capital that they need in order to buy a home, start a small business, or send their kids to college.

But sometimes I get a jolting reminder of just how un-level the playing field really is. Just such a reminder arrived recently in the form of a new report from two of my Greenlining Institute colleagues, titled “TECH UNTAXED: Tax Avoidance in Silicon Valley, and How America’s Richest Company Pays a Lower Tax Rate than You Do. ”

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The Wealth Gap: Why Dr. King’s Dream Is Unfinished

The Huffington Post
by: Preeti Vissa

Wealth is a subject we need to talk about, but it makes Americans uncomfortable. Indeed, we just had a teachable moment about wealth with the 50th anniversary of the March on Washington for Jobs and Freedom, but most of the mass media chose to look the other way.

Many outlets gave at least a nod to Martin Luther King Jr.’s emphasis on economic inequality, but many, like the Washington Post, used a narrow lens. The Post made a brief mention of wealth, but focused mainly on statistics tracking income and unemployment.

As the Post noted, “In 1963, blacks families earned 55 cents for every dollar earned by whites. In 2011, blacks earned 66 cents for every dollar earned by whites.”

That’s bad, but the figures for wealth are even worse.

By “wealth,” I don’t mean riches. Very few Americans of any race have spare billions sitting around. I mean the day-to-day accumulation of assets like savings accounts and home equity that give families a financial cushion. It’s wealth that lets you get by if you unexpectedly lose your job, or when a sudden illness costs thousands in medical expenses your insurance doesn’t cover. It’s wealth that lets you pass something on to your children and give them a financial head start into adulthood.

Economist Joseph Stiglitz rightly zeroed in on wealth in an online commentary for the New York Times:

“The Great Recession of 2007-9 was particularly hard on African-Americans (as it typically is on those at the bottom of the socioeconomic spectrum). They saw their median wealth fall by 53 percent between 2005 and 2009, more than three times that of whites: a record gap. But the so-called recovery has been little more than a chimera — with more than 100 percent of the gains going to the top 1 percent — a group where, needless to say, African-Americans cannot be found in large numbers.”

According to the latest U.S. Census figures on household wealth, for every dollar a white family in America has, the median Latino family has barely seven cents and the median African American family has less than six cents.

Dr. King understood that we did not get to this situation by accident. Much of the racial wealth gap is a result of deliberate policy choices, both by government and the private sector. And because wealth can be handed down from generation to generation, the effects linger long after discriminatory policies change.

Jim Crow laws in the south kept most African Americans locked into an economic underclass. In the north, the process was more subtle but just as real, with bank redlining and federal government housing policies preventing people of color (and often not just African Americans) from buying homes in white neighborhoods, relegating them to more rundown communities where property values didn’t rise like they did on the white side of town.

San Francisco, for example, didn’t have the sort of legally enforced segregation seen in Alabama or Mississippi, and yet in the early 1960s, Wilt Chamberlain — then playing for the Warriors and arguably the biggest NBA star of the day — could not buy a home in a white neighborhood.

And even when housing discrimination was outlawed, it often continued on the sly. A white colleague recalls house-hunting with his parents in southern California in the early 1970s, hearing real estate agents casually discussing the tricks they used to keep blacks out of white neighborhoods. Because the homes that people of color were allowed to buy didn’t appreciate as much, today their descendants have less wealth with which to prepare for emergencies or send their kids to college.

My own experience of wealth is somewhere in the middle. My dad grew up in India, the youngest of seven and with very little money, but a combination of good fortune and hard work helped him make it to a top college there, where he got his masters in engineering. That helped him land a good job that brought him to the U.S., where he worked hard and sacrificed to make sure that we didn’t struggle like he did. He and my mom managed to send me and my brother to college as undergrads without accumulating a large student loan debt. I do have some debt from grad school, but am still in a much better place than many because my parents could provide a safety net.

Some of my closest friends from college didn’t have that financial safety net. Their student loans loom over them like a gathering storm, impacting many decisions they have made since graduating.

My parents are my heroes because they did everything in their power to ensure that my brother and I would have security and success when we got older. And they succeeded. But what breaks my heart is that my friends’ parents are equally committed to their kids and worked just as hard, but couldn’t overcome the institutional inequities that hold so many back.

Don’t get me wrong, my friends are doing well, but they have fewer choices and more obstacles in front of them as they start planning for their futures.

That’s one of the unseen effects of the racial wealth gap: It limits the choices available to our young people. If you leave college with a mountain of debt, the need to repay that debt while keeping the lights on can force you into a career that isn’t what you really want, but seems sure of paying the bills. How many artists, writers, and social justice organizers have our communities lost because of this? How many James Baldwins or Cesar Chavezes have we been deprived of?

I’m now a mother, and I want my son to have choices when he grows up: what kind of school he wants to go to, what he wishes to study, where he wants to live, what sort of career he pursues. Our hope as parents is that the support we can give our kids grows with each generation, that every generation has doors open to them that their parents didn’t have.

Until America develops policies to address the massive racial wealth gap that two centuries of policy choices created, far too many of those doors will stay closed.

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The State of Our Fragmented Union

The Huffington Post
By Orson Aguilar

This evening, President Obama will give his final State of the Union address. These addresses often have an optimistic spin, and particularly so as a president nears the end of his term and seeks to cement his legacy, so let me say a few things that Mr. Obama surely knows but may be reluctant to put into words.

For Americans of all colors, the state of our union is not good, both economically and politically.

Officially, the U.S. economy has been in recovery since 2009, when our GDP stopped shrinking and started growing. But for the majority of working Americans it doesn’t feel like a recovery when wages are stagnant and a growing number of jobs are part-time, temporary or otherwise insecure.

It’s even worse for communities of color, the nation’s fastest growing groups. The racial wealth gap isn’t getting any better, and it persists even among those with a college degree. While many white families still feel like we’re still in a recession, for too many black and Latino families, it feels like a depression. The unemployment rate for African American men age 20 and up, for example, remains stuck at 9.9 percent, compared to 4.0 percent for whites in the same age bracket.

This, mind you, is after six years of a recovery that at some point must slow down. Economic forecasts are notoriously imperfect, but growing numbers of economists see a slowdown coming in the next year or two.

Meanwhile, the politics of racial resentment keep getting meaner, louder and more overt. With Donald Trump leading the way, appeals to xenophobia and prejudice have transformed from dog whistles to air-raid sirens. And while economic insecurity may explain part of the appeal of such tactics, it doesn’t seem to explain all of it. Pondering Trump’s appeal to white voters without a college degree, Eduardo Porter recently wrote in the New York Times,

Such voters are nostalgic for the country they lived in 50 years ago, when non-Hispanic whites made up more than 83 percent of the population. Today, their share has shrunk to 62 percent as demographic change has transformed the United States into a nation where others have a shot at political power.

Their fear is understandable. In general, the concerns of Hispanic and black American voters are often different from those of white voters. But the reaction of whites who are struggling economically raises the specter of an outright political war along racial and ethnic lines over the distribution of resources and opportunities.

These fears and resentments cause significant numbers of working class whites to vote against their own economic interests. As Greenlining Institute board co-chair George Dean put it to me recently, “Racism and bigotry are more important that economics — and for what?”

Asian Americans, often put on a media pedestal as a successful “model minority,” face a different problem. The model minority myth makes it easy to ignore shockingly high poverty rates of as high as 38 percent in some Southeast Asian immigrant communities.

There is a path forward. We can create a rising tide the does in fact lift all boats — for real, not the illusion peddled by so many post-Reagan Republicans who sold the snake oil that deregulation and tax cuts for the wealthy would magically produce prosperity. Smart policies can lift wages, protect workers and use growth industries like the exploding clean-energy economy to channel investment and opportunities into communities where the recession still looks like a depression.

But this requires leadership. It requires those seeking the presidency or seats in Congress to ignore nearly all of the political advice they get from consultants and pollsters. Don’t pander to resentments. Don’t try to cobble together small groups of aggrieved voters into a narrow majority that can squeak you though the election at the cost of leaving the country increasingly fractured and ungovernable.

More than ever, we need those who seek to lead us to be bold and to think big. Sketch out a vision for an America that gains from its diversity, where success isn’t a zero-sum game in which your growth means my loss and vice versa, where anyone from any background can climb the ladder of opportunity and know the game isn’t rigged against them.

It’s possible, but only if our leaders have the vision and courage to give it a try.

The Recession Isn’t Over for Millions — Does Anyone Care?

The Huffington Post
by Preeti Vissa

My colleagues in The Greenlining Institute’s Economic Equity team just spent several days in Washington, D.C., meeting with officials from the Federal Reserve, Small Business Administration and other agencies critical to Americans’ economic well-being. Part of their message was simple and painful: Don’t forget the millions of Americans for whom the Great Recession has never ended.

The National Bureau of Economic research tells us that the recession officially ended in June 2009, when the U.S. economy started growing again. But this rising tide definitely did not lift all boats.

The most recent data from the Census Bureau looks at household wealth from 2001 through 2011, over a year and a half into the supposed recovery, and it’s not a pretty picture. Remember that wealth can often be a better picture of a family’s financial security than income, because it measures the assets — savings, home equity, investments — that can get you through a job loss or other misfortune.

The wealthiest 40 percent of Americans gained during this period, with the top 20 percent seeing their median household net worth rise from $569,375 to $630,754. The other 60 percent lost wealth, with the poorest fifth of the country now having a deeply negative net worth — in the hole by more than $6,000. An awful lot of people would be in real trouble (as in at risk for homelessness) if they were out of work for much more than a couple of months.

Looked at by race and ethnicity, whites showed a small gain in net worth, but that gain went only to the top 60 percent. African Americans and Latinos saw their net worth plunge by 37.2 percent and 42.1 percent, respectively, again with the best results concentrated in the wealthiest segments of these groups (unfortunately, the Census report did not provide data for Asian Americans).

By way of comparison, the Dow Jones Industrial Average has risen about 70 percent since October 2008 (when it hadn’t even hit bottom yet). That’s great for the small slice of Americans who own lots of stock, but not so much for the rest of us. And that’s not just me talking. In a recent report, Standard and Poors found that economic disparities hurt the whole economy, writing, “the current level of income inequality in the U.S. is dampening GDP growth.”

A snapshot of recent trends, from 2008 to 2013, was released over the summer by the Federal Reserve. The Fed’s survey asked Americans a battery of questions about how they feel they are doing financially.

In some ways, the results are slightly more reassuring, with a majority saying they are “doing okay” (37.3 percent) or “living comfortably” (23 percent). But again, when you dig deeper into the numbers all is clearly not well for many of our neighbors.

Overall, more people said they were worse off in 2013 than in 2008 — 34 percent, compared to 30 percent doing better. Those with annual incomes under $75,000 were far more likely than those making more to see themselves as worse off, and those with incomes under $25,000 were by far the most likely to describe their financial situation as “much worse.” As with the Census numbers, people of color in the Fed survey seemed to be doing worse (and again no data were reported for Asians — am I noticing a pattern here?), with 17.3 percent of blacks and 15.7 percent of Latinos saying they were “finding it difficult to get by,” as opposed to 12.2 percent of whites.

While blacks and Latinos were actually a bit more likely than whites to say that their economic situation has improved since 2008, they were also more likely to have student loan debt and dramatically less likely to think they could get by for three months after losing their main source of income. Forty percent of Latinos and 42.5 percent of blacks had zero retirement savings or pension, compared to 25.4 percent of whites.

Such disparities are painfully apparent here in California. California’s unemployment rate has dropped a full five points since August 2010, to 7.4 percent, but for Latinos it’s 9.2 percent and for African Americans unemployment is still at 13.6 percent. Many rural areas, also hammered by drought, continue to struggle. The San Francisco Bay Area where I live has felt an economic earthquake from the boom in tech — one of the least diverse industries – that has left some doing extraordinarily well and others, disproportionately black and Latino, struggling simply to keep a roof over their heads.

Every part of the country has its own story, but the theme of inequality runs through them all.

That so many of our friends and neighbors face such profound financial insecurity after five years of supposed economic recovery tells me we have a lot of work to do if we’re serious about America being the “land of opportunity.” And I sure don’t see much sign of Congress trying to do anything about it.

Next time, I’ll discuss how we might open up some of those doors of opportunity, and what my colleagues heard while in Washington.

The Real Face of Proposition 23
By C.C. Song, The Greenlining Institute

In the backyard of the Tesoro and Valero refineries in Wilmington, California lives a thriving community that has been fighting back against the oil giants for years. Because of Proposition 23, attention has finally been brought to local residents who wake up to see the refineries’ smoke day after day.

Continue reading “The Real Face of Proposition 23”

The New War on Homeownership: Could It Lead to a Permanent American Underclass?
Preeti Vissa

As long as most of us have been alive, owning your own home has been a big part of the American Dream, but suddenly some prominent media voices are saying, “Not so fast!” Some of these newfound doubts about homeownership have a distinct aroma of racism about them.
Continue reading “The New War on Homeownership: Could It Lead to a Permanent American Underclass?”