This weekend, I was on the radio with Rev. Jesse Jackson. He'd just completed a march in Detroit, for jobs, peace and justice, only to find that his SUV was stolen upon arrival. But when I asked him if he was OK, his response was quite telling of the leader that he is: He simply said that the car doesn't matter at all when there are so many people suffering across America. Well, the nation-wide suffering for African Americans has just intensified with the recent unemployment data delivered by the Bureau of Labor Statistics. It's most recent report showed that while white unemployment only went up from 8.6 percent to 8.7 percent, black unemployment went up from 15.6 percent to 16.3 percent. This increase of seven percent is at a rate that is 700 percent of the increase of white Americans.
I just returned from an awesome speaking event in Lagos, Nigeria. Pastor Poju Oyemade, a visionary leader in the Nigerian community, created a semi-annual event called “The Platform”, which is one of the most respected economic empowerment venues in the country. The Pastor invited me and some other business leaders to discuss the entrepreneurial spirit and how it can be best used to unleash the awesome potential of the Nigerian economy.
The event organizers met us with Barack Obama-like security, complete with serious looking brothers with dark suits and even darker sunglasses. I felt completely safe in a country that has been falsely presented to the world as a haven of danger. Nigeria is not nearly as scary as the media depicts it: like any other nation, there is both good and bad. Unfortunately, the bad has gotten more attention than it deserves.
I arrived in my hotel, a swank and comfortable spot right on the beach, ready to sleep off the jet lag. I was ready to take a nap in the hallway if necessary, since I was as tired as you can get. I crawled toward my bed with my last ounce of energy, shocked at who would be greeting me in my room: It was Jay-Z.
Well, it wasn’t the real Jay-Z, just his face on the cover of a magazine. Here I thought I’d escaped the Jiggaman by heading across the world, and there he was, diamonds blinding me with his undeniable floss. The megastar “bling-aholic” was being featured in a Nigerian magazine promoting the very same thing I was there to discuss: the power of entrepreneurship.
I respect Pastor Oyemade, the organizer of the event, for the same reasons I respect Jay-Z: they have both learned that Black men and women are strongest when we are economically free. I am not always in favor of everything that the Jiggaman does, but I certainly appreciate the progress he has shown throughout his career. He makes megadeals behind the scenes that will ensure that he is getting paid well into old age. When I addressed my audience in Nigeria, I talked to them about a few things:
1) The value of ownership – it’s difficult to get wealthy in America if you don’t own anything. I know a lot of doctors, lawyers and professors with high incomes who still have not yet learned how to let their money work for them.
2) Entrepreneurship should be taught to our children – every Black child in the world should be taught how to create a job, not just how to go out and get one.
3) Start your business around your passion – if you love what you are doing every day, you will get a paycheck even when you don’t make any money.
I didn’t just go to Nigeria to teach, I also went there to learn. I learned a long time ago that you can never be a good teacher if you are not also a good student. So, here are some things I learned from our Nigerian brothers and sisters across the sea:
1) We are really blessed as Americans. While we might feel that we don’t have as much as we deserve, we’ve actually got quite a bit to work with.
2) You can overcome a great deal if you put your mind to it. There are people in other parts of the world who endure things on a daily basis that we can’t possibly imagine.
3) The best investment opportunities are now in Africa. A smart investor with solid, honest contacts can make more money in Nigeria than they could almost anywhere else. Africa is the next China.
I enjoyed my trip to Nigeria, but I was as much student as professor. I learned from Jay-Z and his success in hip hop, and I also learned from my Nigerian family. All in all, I can say that this trip helped complete me as an investor, a professor, a Black man and a human being. I look forward to my next trip already.
The Dr. Boyce Challenge for this month is simple: Create a budget which includes the steady elimination of credit card debt. That means you should list every single expense you have for the entire month on one piece of paper or a spreadsheet.
Don’t leave anything out. Count the money you want to use for getting your hair done, your nails, paying your mortgage, car note, whatever. Count everything. That will be your first step toward obtaining financial fitness.
As you create the budget, allocate at least 10% of your monthly income toward reducing credit card debt. So, if you earn $3,000 per month after taxes,$300 per month should be allocated toward removing credit card debt, not including interest. So, if you owe $5,000 in credit card debt, you can remove this debt in a year and a half. It’s easier to negotiate with creditors if you don’t need them so much. Take small steps toward finding your financial freedom.
If you wish to see a video explaining consumer confidence, which is one of the driving issues behind the recent moves in the stock market, please click here.
This has been an interesting week, with auto execs showing up on private jets to request a bailout from the government and the Dow moving to below 8,000 points for the first time in 5 years. I still hold to the fact that this is a great time to get into the stock market if one has never done so before, especially if you are under the age of 50. By the way - please visit our sponsor, GreatBlackSpeakers.com if you are interested in hiring a top notch African American speaker or seeking to become one.
===================================================================================== If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.
Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:
1) Confident consumers spend money
If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.
2) Confident companies invest money and hire workers
Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.
3) Confident Americans do not take their money out of banks
In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.
4) Confident investors keep their money in the stock market
The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.
5) Confident banks make loans
Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.
The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.
Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, BET, ESPN and CBS. For more information, please visit http://www.blogger.com/www.boycewatkins.com. To join our money list, please click here.
The financial markets experienced a recent rise of over 900 points, nearly double the one-day record. Just that morning (before the increase), I was asked by the Tom Joyner Morning Show whether or not investors should shy away from the market when prices are down. I explained the following:
1) When the market declines, that is not the time to run away. It is the time to run TOWARD the market. You don't buy when prices are high, you buy when prices are low.
2) The key words to remember for stock market investing are BUY and HOLD. That means that you buy a diversified portfolio (spread your money out, as in a mutual fund) and let your money grow. You are not out to try to pick the right stocks at the right time, since that will drive you insane and cause you to lose money.
3) Historically, when the market goes down, it has always come back up. So, I told Tom that I was not changing my portfolio one bit, and I was even going to over-invest in the market while it was low. In the financial research I've been doing for the past 15 years, one thing is true: the stock market tends to reverse itself over short, medium and long-term horizons. Typically, if the market declines a great deal during one week, the next week, on average, tends to be strong positive. This is due to investor overreaction, which can occur during a panic like the one we've had this past week. But remember: your goal as an investor is not to spend your time trying to predict the stock market, your goal is to build wealth.
Visit www.DrBoyceFinance.com for more information. You can also check out some of our videos at YouTube.com/DrBoyceFinance.
Remember to always own the land on which you stand. You are now the teacher, so please share this message with others.
Unlike babies, credit scores do not come from a financial stork.There are 3 major credit bureaus in the United States: Experian, Trans Union and Equifax.Companies subscribe to their services to obtain information about you to decide if you are credit worthy or not.Under the old system, the credit scores ranged from 375 to 900.Under the new VantageScore system, they range from 501 to 990.The new system is more consistent among various credit bureaus, so you don’t end up with scores that go all over the place.
How can I get a copy of my report?
I personally go to a site called Myfico.com, where you can order reports from all 3 bureaus or just one.You can also go to freecreditreport.com (you know, the site with the really funny commercials).The law says that you are entitled to at least one free credit report every year.Also, if you are denied credit for any reason, you can write the bureaus, sending along a copy of the rejection letter, and request a copy of your credit report.If you choose to pay for your report, it will likely cost you about $8 dollars.
What factors go into calculating a credit score?
The factors that go into calculating a credit score are a little vague and it’s protected like the recipe for KFC chicken.While the formula is well-guarded, we do have some guidelines on what factors are theoretically used to determine whether or not someone should loan money to you.
The factors are broken into what they call “The Four C’s of Credit”: Character, collateral, capacity, capital and conditions.
Character is their way of trying to decide if you are a good person or not.I don’t agree with this, since having bad credit does not make you a bad person.It just makes you a person who does not have a good track record when it comes to borrowing money.
Capacity is represented mostly by your income level and how much money you’re expected to earn in the future.
Capital is noted by the amount of cash you have in reserves and other liquid assets at your disposal.If you have capital, that means you can withstand a short-term decline in income and still make payments.
Conditions are reflected by the environment in which you live.It might include the state of the economy, your line of work and other external factors that might impact your credit report.For example, during the liquidity crisis in America, conditions for lending are very, very bad.
Now you know where credit scores come from.You probably have more questions, since there is a lot of ground to cover.To get more information, please feel free to learn along with me and my students by visiting www.DrBoyceFinance.com.
Dr. Boyce Watkins is a Finance Professor at Syracuse University.He does regular commentary in national media, including CNN, ESPN, BET and CBS.For more information, please visit www.BoyceWatkins.com.
As part of our series on understanding credit scores, we can now move into more of the nitty gritty.Understanding credit is an important part of financial planning, and there are even more ways for you to be informed, empowered and financially independent.Below, I continue with my Q&A about credit scores.Hopefully, empowered with this new information, you can work your way to the wealth and financial security you deserve.
How are all of the factors weighted when determining your credit score?
As I mentioned in the prior article, there is no publicly released, verifiable formula for how the various factors in your profile go into defining your credit score.However, there are researchers like myself who spend all of our time learning how these things work.So, based on the existing data, here is one estimate of how aspects of your credit history go into determining your credit score.
35% - Your history of payment on debts from the past
30% - The amount of debt you have
15% - Length and depth of your credit history
10% - The amount of new credit you’ve applied for recently
10% - The type of credit you use (credit cards, student loans, etc.)
Again, while these numbers are not precise, the truth of the matter is that they are probably accurate in a general sense.Reducing your current debt and paying bills on time have been shown to be an important way to improve your credit score.
How do I correct an error on my credit report?
The law protects consumers who feel that their credit report has errors on it.Anything you believe to be inaccurate on your credit report can and should be disputed.You should dispute the information in a formal letter to the credit bureau, not in a phone call or even email.You want formal documentation of your challenge.
The Fair Credit Reporting Act states that any information disputed on your credit report must be verified by the credit bureau within 30 days.If they reach out to the company that claims you owe them money and don’t hear anything back, they must by law remove the negative information from your credit report.Use this vehicle to carefully check on any information in your credit report that you do not believe to be accurate.
When you write the letter, make sure you include the following information:
-Your full name
-Your social security number
-Your date of birth
-Your mailing address
-The name and account number for the debt you are disputing
-The reason you feel the debt is not accurate
-Your signature
Be sure to include all relevant information, because the law says that the bureaus do not have to respond to any disputes they consider to be frivolous (not without merit).You want them to take your dispute seriously.
Here are the addresses to the various credit bureaus:
Equifax Credit Information Services http://www.equifax.com PO Box 105873 Atlanta, GA30348 800-685-1111
Trans Union http://www.transunion.com ConsumerRelationsCenter PO Box 1000 Chester, PA19022 800-888-4213 OR 440-779-7200
Dr. Boyce Watkins is a Finance Professor at Syracuse University.He does regular commentary in national media, including CNN, CBS Sports, BET and USA Today.For more information, please visit www.DrBoyceFinance.com.
One of the groups that was not bailed out during the recent financial crisis has been the American consumer. Congress took care of the firms on Wall Street, but they didn’t take care of the millions of Americans forced to confront the realities of bankruptcy, foreclosure and uncomfortable confrontations with menacing bill collectors. It appears, sadly, that every man and woman must find their own way through this financial tragedy.
Bill Collectors really want their money, like the rest of us. Some of them seem to feel that it’s O.K. to resort to flat out thuggish intimidation to get their money back. That might work on The Sopranos, but it shouldn't work in real life.
Part of the reason abusive bill collectors can have their way with the public is because many citizens do not know their rights. Bill collectors prey on the uninformed in a terrible way: They may threaten to have you arrested, harass your relatives, call all hours of the night, and engage in other types of atrocious behavior to get their money out of your hide.
One woman successfully sued a rogue bill collector after he called her repeatedly with threatening language. The woman, a senior citizen, was told by the man to "Stop with the sob stories and pay your god d*m bill!" This kind of behavior is not acceptable, and bill collector harassment doesn’t have to keep you up at night.
The Federal Trade Commission states that complaints against bill collectors are rising, reaching the highest level they've seen in the past 3 years. Most of the complaints focus on vulgar language, trying to collect more than the amount of the true debt, and extra fees, such as court costs.
You have rights that can protect you from bad and malicious bill collectors. You want to keep these in mind as you work yourself out of debt:
1) There is something called "The Fair Debt Collection Practices Act". If you are not familiar with this document, get familiar with it. You can read it by clicking here.
2) A bill collector cannot contact you at work if your employer does not approve of the contact. Let the bill collector know that this is the case and they must legally stop contacting you at your job.
3) Bill collectors cannot call you before 8 am or after 9 pm. The only exception is if you give them permission to do so.
4) A bill collector can only contact your friends and family if they are trying to find a way to get in touch with you. However, some of them may do this in order to harass or embarrass you. If that is the case, you may want to tell your friends to tell the bill collector, "She does not live here and I do not know how to get in touch with her. Please don't call here anymore." Then, get the bill collector's information from your friend and reach out to them when you can.
5) You can get bill collectors to stop contacting you altogether by sending them a letter telling them to stop. You still must pay the debt, but they won't be calling you during dinner.
6) The bill collector cannot curse at you or use foul language and they must tell the truth about how much you owe. They cannot threaten to sue unless they are serious about it, and they can't touch your 401k or IRA.
7) If the bill collectors call you, you can demand that they send you a written notice of the amount you owe and who you owe the money to. If you do not believe that the debt is yours, you can write a letter to them stating that this is not your debt. They must then send you proof that the debt is actually yours.
If you feel that a debt collector has violated any of these rules, you can contact the Federal Trade Commission at www.ftc.gov. Remember that you are not powerless in this situation.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of Financial Lovemaking 101: Merging Asset with Your Partner in Ways that Feel Good. He does regular commentary in national media, including CNN, CBS, NBC and BET. For more information, please visit www.BoyceWatkins.com. This information does not constitute legal advice. For legal advice, please consult your attorney.
I am not completely sure I agree with everything that's being said on this slideshow, but I thought I would share it. One of my students sent it to me, and I it was pretty funny.
1) FDR had it partially right when he said that "We have nothing to fear but fear itself." While we have other worries as well, the greatest obstacle to economic progress is the HUGE psychological impact of Americans watching the stock market plummet right in front of their faces. This is going to cause consumer spending, lending, borrowing and investing to freeze like a deer in stadium lights. When people stop spending, economies start dying.
2) This crisis was a long time coming. De-regulation pushes down on the economic gas, but increases the chances of an economic crash. The dramatic growth of the past 8 years was a result of the same policies that are leading to the huge challenges we are faced with today.
3) Much of the impact of this crisis is a financial illusion. A large percentage of the devaluation in stock and home prices is driven by the fact that the original value was incorrect in the first place. When prices are out of whack, they must correct themselves. While a crisis may also be a correction, a correction is not necessarily a crisis.
4) Prepare for a period of "Financial McCarthyism" in America. Many baby boomers are closing in on retirement, and scared to death. To boot, many of these individuals have not properly prepared for retirement. When Americans get scared, politicians get nasty. We will likely see some of the most Draconian legislation in history.
5) What makes this crisis such a concern is that even before the meltdown, the economy was already quite fragile. With soaring gas and food prices, the economy was the #1 issue on the minds of most Americans. The decline of many financial services firms was, for the most part, a logical continuation of the fact that many homeowners were defaulting at the start of the year. This crisis is most certainly going to shift the political landscape and might give us our first Black president.
6) Yes, this market drop was the largest in history, 770 points in one day is nothing to sneeze at. But keep in mind that this drop doesn’t even make the top 10 in terms of percentage declines.
7) The American consumer is not off the hook. The “Wall Street Greed” angle of this story completely denies the fact that many American consumers tend to overspend and over borrow. Many Americans were buying homes they could not afford and borrowing against their home equity in order to go on vacation. It takes two to tango and banks rarely forced anyone to take the loans being offered to them. If Obama can tell Black Men to take more responsibility for our economic challenges, then he should be willing to say that to the rest of America.
People fall in love every day. Some fall in love forever, and some just love the idea of falling in love. We are all familiar with the bliss and agony of love, and our mating, dating and procreating choices define much of the quality of our earthly existence.
But many of us love in all the wrong ways and make short-term choices with serious lifelong consequences. For long-term relationships, reality eventually sets in, and we learn that LOVING together means LIVING together. The thrill you once got from a long, seductive kiss is replaced by the excitement of a good home appraisal or bank account increase. Financial insecurity and emotional insecurity become one and the same, as we find there is a strong correlation between financial deception and emotional betrayal. A big part of living is MONEY. According to a study by the Council of Relationships, money is the number one reason for divorce. This alarming reality is a strong reminder that not discussing the financial and practical dimensions of your relationship can cause you a lifetime of misery.
Some consider it taboo to discuss love and money in the same sentence. I consider it ESSENTIAL. While we might mull all day over a potential mate’s emotional compatibility, sexual compatibility, professional compatibility and spiritual compatibility, most of us don’t spend one second thinking about financial compatibility. Many couples step into serious relationships and marriage without knowing their partner’s income levels, debt levels, credit score, retirement savings, or any of the other significant pieces of information that are going to have a dramatic effect on their love life. Merging your life with a financially irresponsible person is like putting your children into a car with a drunk driver. Once you are in the car, your fates are inextricably linked.
Money plays a huge role in our quality of life, emotional well-being, ability to raise our children properly or ability to spend time together. Money can either be a tool to enhance your love or a weapon to destroy it. Many people have seen their love and relationships ruined by financial problems, financial deception or financial exploitation. How we manage, confront and conceptualize the power of money plays a huge role in how our relationships evolve. That is what Financial Lovemaking is all about.
You think money doesn’t matter in a relationship? Well, here is just a small list of ways that someone could ruin your life financially:
• A partner with horrible credit could keep you from ever getting loan. • A partner with terrible spending habits can ruin a family’s financial security. • A partner with a substance abuse or other costly addiction could deplete a family’s assets. • A partner with unhealthy connections to deadbeat relatives, who always need money, may drain your assets. • A partner with an income that is too low due to a lack of education or poor professional choices could ruin you financially. • A partner may steal money from you or borrow it without your permission and use it for something frivolous (i.e. a bad business investment, gambling, etc.) • A partner who makes bad financial choices may get you into trouble with the IRS. • A partner who decides to separate from you may end up dragging you and your money through a long and costly legal battle.
I just gave you the short list of ways that money directly impacts your love life. I am sure you can think of experiences you’ve had or those of your friends. In fact, I encourage you to visit our Financial Lovemaking blog to share your personal story on how love and money have impacted your life.
I am not here there to say there’s nothing going on but the rent. However, I can say that nothing else goes on if the rent is not being paid. So, good Financial Lovemaking is necessary for good love. Don’t forget that.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” He does regular commentary in national media, including CNN, NBC, CBS, MSNBC and BET. For more information, please visit www.FinancialLovemaking.net.
People have asked me what I think about Juanita Bynum and her post, pre and intra-marital drama. In case you haven’t heard, Juanita Bynum is a well-known black evangelist who was allegedly beaten by her husband Bishop Thomas Weeks. The alleged incident took place in an Atlanta Hotel Parking lot, and received a great deal of media attention.
As one would expect from a woman who’s been recently beaten by her husband, Juanita Bynum held a press conference. No trial, no hearings, no indictment, no conviction: just a press conference. Bynum then declared herself to be the new face of domestic violence in America. That was my introduction to the peculiar world of Juanita Bynum.
I am not sure what world Juanita Bynum lives in, but it can’t be my own. When hearing that she held a press conference after the alleged attack (along with appearances on Divorce Court and Essence Magazine), I immediately wondered if any good could come from this. I was hopeful that the goal was to truly fight domestic violence, thus empowering women around the world from her experience. I also wondered if this was Juanita Bynum’s version of Celebrity Pastors Gone Wild.
It is no secret that Juanita Bynum wants to be the next Oprah. Such lofty ambitions require you to sometimes sell your soul for success: Halle Berry shaves her head and signs a big movie deal. Vivica Fox gives oral sex on camera and then gets a new show. Rappers get shot on purpose.
That’s the celebrity fame game, and Juanita appears to be a part of it.
As a specialist in marketplace buying and selling, I quietly wonder if those responsible for saving souls should be so quick to sell their own. At the same time, there are many in the ministry who’ve made money and power their primary objectives, and spend a lot of time praying to the false God of capitalism. Anybody got a Dollar for the collection plate? How about some Taffi? Praise the Lord, amen.
I don’t consider Juanita Bynum to be a bad person. I just hope that she hasn’t allowed blind ambition to turn her into a spiritual Stevie Wonder. Mixing the idea of celebrity with service to God is a slippery slope, and if Jesus were among us in the flesh, I am not sure he would be appearing on Divorce Court. But spiritual leaders are the first to remind us that they can’t quite match up to Jesus. At the same time, one expects a higher standard from Juanita Bynum, TD Jakes and others who expect to preach to us every week.
I am a finance professor and a hardcore capitalist. I fully understand the drug of money. In some ways, I feel like the drug pusher who looks at the church going mother of 3 and says “Ma’am, you don’t want to smoke that crack pipe.” I know that addiction to the drug will cause the mother to abandon her children and destroy everything she holds sacred in order to get another hit. Hearing pastors (i.e. TD Jakes) referring to Jesus as a “product”, or seeing men and women of God speaking on money more than I do is beyond disturbing. It’s just downright crazy.
I don’t consider Juanita Bynum to be the face of domestic violence. Domestic violence has millions of faces of women who never held a press conference. But I certainly hope that she is working to use her newfound fame to support and protect those who are in abusive relationships. But truth be told, I haven’t seen much out of Bynum other than publicity stunts designed to promote the name, fame and wealth of Juanita Bynum.
If the leaders of the flock have been blinded by their own ambition, what does that mean for the sheep? I would hate to imagine that going to church might somehow jeopardize my salvation, since Jesus has been reduced to a product for sale. Perhaps it implies that we should cut out the middle man and find our own connection to God. What would Jesus do?
Oprah Winfrey’s support for Senator Barack Obama, while certainly admirable, has cost her some support among fans. According to a recent poll, Winfrey’s approval rating was 74% before the election, dropping to 61% after turning her support toward Obama. At the end of the Jeremiah Wright controversy, her approval rating dropped further to 55%.
I admired Oprah a great deal for stepping out in support of Senator Obama. I also knew that she would pay the greatest price for this bold political move. What surprised me about Oprah’s support for Senator Obama was the fact that she was willing to do damn near the exact opposite of what made her a billionaire: take political sides in a nasty race. She also had the audacity to support a highly qualified black man over a well-respected, powerful woman. When reporters asked me about Oprah’s decision to step out on the limb of controversy, I simply said “Damn, I thought I was the only one crazy enough to do things like that. Oprah’s going to get fried for it.” Entertainment is based on popularity. The more of a jelly-like spine you have, the better off you’re going to be. You have to be able to move with the crowd and makes folks feel good. DL Hughley from Def Comedy Jam even appeared on several shows referring to the black women from Rutgers University as “Nappy Headed Hoes”, all so he could build a little extra fame on the back of a very serious issue. Entertainment moguls like Oprah Winfrey and Bob Johnson are the best when it comes to telling people exactly what they want to hear, and they’ve become quite wealthy for it.
But it is Oprah’s willingness to take a serious stand on critical social issues that will serve as the dividing line between the legacies of billionaires Winfrey and Johnson. Oprah will be celebrated and remembered 100 years from today. People will only think that “Bob Johnson” is the name of an exotic sex toy. Johnson’s time capsule will contain DVDs of BET (Booties, Exploitation and Thugs) videos, while Oprah’s capsule will contain pictures of the young women attending the school she built in Africa. I am not a woman, but even I am empowered by someone who stands up so firmly for women’s rights. So, I give a big “You go girl” to Oprah for doing something that many wealthy black entertainers with predominantly white audiences are not quite willing to do.
At the same time, it was Oprah’s decision to be a BLACK woman (not just a woman) and support Barack Obama over Hillary Clinton that led to the backlash from her audience. Simultaneously, it was Bob Johnson’s allegiance to Senator Clinton that led to him being compared to Uncle Ruckass, the first class Uncle Tom from the TV show “The Boondocks”. Both billionaires shifted away from their policies, and both of them are getting hammered for it.
Oprah and Bob were reminded of a valuable lesson: Popularity and politics just don’t mix.
People don’t pay their black entertainers to take political stands. They pay them to dance, sing and make jokes. One can’t wear the white suit of entertainment and swim in the dirty waters of racially-divisive American politics.
One thing I know about money is that it can empower and liberate you. The problem is that money can also enslave you. Many black professors at top white universities fear losing their precious jobs if they speak out on social injustice. So, we spend our entire careers writing research papers that no one ever reads, while a world that starves for our intellect dies around us. There are hoards of angry black middle class Americans who fear opening their mouths because they won’t be able to keep up the payments on the Lexus. We all understand, on some level, the tradeoffs that Oprah, Johnson and Obama are forced to make.
One of the great dilemmas of the black experience is that we judge one another on our ability to obtain wealth, power and popularity, three things in short supply in our community. Rather than asking WHY Bob Johnson has a billion dollars, we presume that he is a great man only BECAUSE he has a billion dollars. Our measuring stick for success is one that provides prominence and respect to those who’ve been most willing to sell their soul to obtain scarce social resources. This creates a sticky set of incentives, as we keep our eyes on the carrots while taking our eyes completely off the prize.
You (Barack Obama) can’t get elected with 13% of the vote, so you are forced to engage in a disturbing amount of diplomacy and “bridge building”. You even become the only major politician to not show up in Memphis on the 40th anniversary of Martin Luther King’s assassination. In addition, you are asked to denounce a different black male associate nearly every week, while your opponents have equally questionable affiliations that receive no attention from mainstream media. You (Oprah Winfrey) are a TV mogul who can’t earn a billion dollars from your black audience, so you build a predominantly soccer mom constituency that will penalize you for supporting a black presidential candidate. The audience helps you pay the bills, as long as you keep feeding them more Dr. Oz and Dr. Phil without even considering building shows for many black experts across the country who DO NOT have that annoying country accent.
You (Bob Johnson) can’t quite get your message onto a mainstream TV network, so you create a network for African-Americans and spend 20 years feeding them nothing but naked women, gold grills, jock-grabbing “gangstaz” with guns and other profitable garbage. You don’t feed garbage for the survival of the network; you feed it because you want to have a billion dollars instead of 100 million. That’s what makes you a “playa”.
The sacrifices are great, and it is my argument that we should not only question the merits of the sacrifice, but also whether the rewards are as valuable as they seem. For every billion dollars of income earned by Bob Johnson, I speculate that there is at least another two billion dollars in lost productivity from a generation of kids who memorized the lyrics from “Back that Ass Up” before they began kindergarten.
Perhaps it is time to reconsider our social currency.
Does Cornel West have to be at Harvard to be important, or will we respect him at an HBCU?
If Barack Obama loses the presidency for refusing to condemn another black man, will he get as much respect from his Black Home as he would from the White House?
Oprah Winfrey and Barack Obama, to a measured extent, have earned my respect for putting their vast social capital on the line. As a Finance Professor, I understand Bob Johnson, since I have taught thousands of Capitalists to analyze money.
But one thing I know about money and democracy in a racist society is that if you measure your success by wealth, power and popularity, you end up with a Pandora’s Box of contradictions that keep you up all night and on the toilet all day.
Life is too short to work so hard on things that don’t matter. Perhaps we should set new standards.
Video: Dr. Boyce Watkins Speaks on Oprah Winfrey and Barack Obama
The United States is respected throughout the world for its powerful economy.We are also, unfortunately, known for our arrogance.U.S. Monetary policy, headed by Federal Reserve Chairman Ben Bernanke, is both art and science, and the success of Alan Greenspan has forced any subsequent Fed Chairman to become a Financial Da Vinci.
The 2008 recession provides just the right landscape for an allegedly great monetary artist to strut his stuff.The US economy saw its financial chickens coming home to roost, and the recession was a long time coming.These financial chickens included excessive spending by American consumers, mixed with irresponsible borrowing and lending on the part of both individuals and banks.Personal responsibility is thrown out the window when discussing wealthy and middle class Americans, as financial leaders are called upon to bail out the banks, the consumers and everyone else.
Two great weapons in the arsenal of the Federal Reserve are government spending and interest rate cuts. Higher government spending increases consumer demand for the goods and services we continue to buy but almost never need. Interest rate cuts reduce the cost of borrowing for everyone in the economy.This marginal decline in rates serves to stimulate investment by all Americans, since the cost of borrowed money is lowered.
The government bailout package for 2008 included a massive spending bill, one that featured tax refunds and support to help consumers keep their homes, even if they were the causes of their own demise.Another financial steroid being employed has been the strong and consistent cuts of the Federal Funds rate by Federal Reserve Chairman Ben Bernanke.Bernanke has become known as “Bold Ben” by the media, who are consistently stunned by the Chairman’s massive and powerful attempts to control the economic downturn.
The strong and bold financial leadership by our government has been applauded by some, and demonized by others.
Republicans, known for being fiscally responsible, have created budget deficits our country has never seen.Between the Iraq War and the 2008 recession, spending continues to go up, even when tax revenues are expected to go down.The ready availability of additional lending to support our massive spending bills has our financial leaders behaving like teenagers holding a “really awesome” American Express card.
Continuously cutting interest rates may provide additional stimulation to the economy, but the problem is that cutting interest rates, allowing the value of the dollar to slide and frivolous government spending is a recipe for serious, horrific and uncontrollable inflation. Inflation is like a Pandora’s Box:Once it’s out, it’s extremely difficult to reign it back in. It’s hard not to feel that “Bold Ben” and “Big Bad Bush” aren’t gambling with our children’s futures and current taxpayer resources.
Sometimes, when you party too hard, you are forced to deal with the hangover.Americans have been blessed with a financial celebration that has lasted over a decade.We danced with lamp shades on our heads: not saving effectively, spending like crazy and borrowing to cover our financial insanity.But rather than simply allowing the party to end and letting everyone sober up, our financial leadership has taken on the irresponsible behavioral norms of American consumers.Their excessive rate cuts and spending increases have kept us pumped up on Financial Dope in order to avoid the impending crash.
This is not solid financial leadership, and something has GOT to give.
