The Color of Money

by Mehrsa Baradaran

  19. Clayborne Carson and Peter Holloran, eds., A Knock at Midnight: Inspiration from the Great Sermons of Reverend Martin Luther King, Jr. (New York: IPM/Warner, 1998), 61.

  20. Historians Frances Fox Piven and Richard Cloward explained, “Blacks became more indignant over their condition—not only as oppressed racial minority in a white society but as poor people in an affluent one.” Frances Fox Piven and Richard Cloward, Poor People’s Movements: Why They Succeed, How They Fail (New York: Pantheon, 1977), 269.

  21. William Julius Wilson, The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy (Chicago: University of Chicago Press, 2012), chap. 7.

  22. Ibid. at 27; U.S. Bureau of the Census, “Characteristics of the Population Below the Poverty Level, 1983,” 5, https://www.census.gov/content/dam/Census /library/publications/1985/demo/p60-147.pdf.

  23. The Federal Reserve studied the racial wealth gap in 1967 and concluded that “the evidence appears overwhelming that the net wealth position of black families is substantially poorer than that of white families of similar characteristics.” Richard Sterner, The Negro’s Share: A Study of Income, Consumption, Housing, and Public Assistance (New York: Harper & Brothers, 1943), 93. For whites and blacks earning more than $20,000 a year in 1967, whites had a net wealth of $100,009 and blacks had $30,195. At the bottom, for incomes less than $2,499 a year, whites had $10,681 and blacks had $2,148. Henry S. Terrell, “Wealth Accumulation of Black and White Families: The Empirical Evidence,” Journal of Finance 26 (1971): 377.

  24. The reason for the large wealth gap had nothing to do with black savings patterns. In fact, “the bulk of consumption studies show[ed] that blacks saved more at any given level of income." Terrell concluded that “these rather stark findings on wealth accumulation suggest that economic equality for black families will not be achieved when the current annual income gap between black and white families is eliminated because a considerable wealth gap will remain as a legacy of past economic deprivation." Ibid.

  25. Robert A. Caro, The Power Broker: Robert Moses and the Fall of New York (New York: Vintage, 2012).

  26. Economist Frank Davis observed that the “condition of economic stagnation and decay in the black ghettos of America is not self-correcting within the price system. Rather, the pull of economic forces sets up a permanent condition of inequality between a low-income labor-intensive black economy and the rest of the economy." Frank G. Davis, The Economics of Black Community Development: An Analysis and Program for Autonomous Growth and Development (Chicago: Markham Publishing, 1972), 79.

  27. Kenneth B. Clark, Dark Ghetto: Dilemmas of Social Power (New York: Harper & Row, 1965), 11.

  28. According to Harvard’s President Emeritus James B. Conant, the economic situation in the ghetto was “social dynamite." Kennedy’s Secretary of Labor Arthur J. Goldberg said that the conditions pressing on black Americans, including the lack of jobs, was “potentially the most dangerous social condition in America." Paul C. Tullier, “School Dropouts Build Explosive Unemployment in Ranks of Youth," Kansas City Times, May 3, 1963, 38.

  29. In other Los Angeles neighborhoods, there were 5,900 residents per square mile. In Watts, there were 16,400 per square mile. “Report of the President’s Task Force on the Los Angeles Riots, August 11-15, 1965" (Revised Master), 6, folder “Cali-fano Los Angeles Riots, Ramsey Clark Report," Box 47, Office Files of Joseph A. Califano, Lyndon Baines Johnson Presidential Library.

  30. David J. Garrow, Bearing the Cross: Martin Luther King, Jr. and the Southern Christian Leadership Conference (New York: Quill, 1999), 439.

  31. Ibid.

  32. King, Autobiography, 291, 302-307, 326-329.

  33. Ibid., 328-329.

  34. John David Skrentny, The Ironies of Affirmative Action: Politics, Culture, and Justice in America (Chicago: University of Chicago Press, 1996), 71.

  35. Governor Brown called the rioters “terrorists" and promised to deal with them “forcefully." Elizabeth Hinton, From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America (Cambridge, MA: Harvard University Press), 71.

  36. Skrentny, Ironies of Affirmative Action, 73.

  37. Gerald Horne, Fire This Time: The Watts Uprising and the 1960s (Charlottesville, VA: Da Capo, 1997), 36.

  38. U.S. Congress, Senate, Committee on Banking and Currency, Subcommittee on Financial Institutions, “Consumer Credit and the Poor," 90th Congress, 2nd Session, April 19, 1968, 1; Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton, NJ: Princeton University Press, 2013), 194.

  39. Murray Seeger, “Washington Ghetto Smoldering Ruins Block after Block," Los Angeles Times, April 7, 1968, 18.

  40. U.S. Senate, Hearing before the Subcommittee on Financial Institutions of the Committee on Banking and Currency, 90th Congress, 2nd Session, “Federal Trade Commission Report on Credit Practices," April 19, 1968, 18, 22.

  41. Sauter Van Gordon, “Flames Erase Long Stretch of Chicago’s Madison Street," Washington Post, April 7, 1968, A7.

  42. Hyman, Debtor Nation, 180.

  43. David Caplovitz, The Poor Pay More: Consumer Practices of Low-Income Families (New York: Free Press, 1967), chap. 4. The most common purchases were appliances and furniture, and because families living in unstable housing in the ghettos moved more often, they bought more furniture.

  44. Andrew Brimmer, “Small Business and Economic Development in the Negro Community," in Black Business Enterprise: Historical and Contemporary Perspectives, ed. Ronald W. Bailey (New York: Basic Books, 1971), 165-168.

  45. Caplovitz, Poor Pay More, xvii.

  46. Even among inner city borrowers, blacks paid more for credit than did whites. Ibid., 16-17, 81, 88, 90-91, 96-97, 107-109, 110-112, 119, 125.

  47. Federal Trade Commission, Economic Report on Installment Credit and Retail Sales Practices of District of Columbia Retailers (Washington, DC: U.S. Government Printing Office, 1968).

  48. “Federal Trade Commission Report on Credit Practices," 74-82, 101-106. “Consumer Credit and the Poor," 9-10.

  49. Ibid., 3-4.

  50. Caplovitz, Poor Pay More, chap. 4.

  51. Ibid., chap. 5.

  52. Ibid., 25, 100.

  53. Ibid., 21.

  54. “Consumer Credit and the Poor," 7.

  55. Caplovitz, Poor Pay More, 157.

  56. FTC, Economic Report, 24-33. Eleven low-income market retailers obtained 2,690 judgments in 1966 resulting in 1,568 garnishments and 306 repossessions. General market retailers reported only seventy judgments for the same year. The low-income retailers had one suit for every $2,599 of their net sales. The general market retailers averaged one suit for every $232,299 of sales.

  57. Caplovitz, Poor Pay More, conclusion. Caplovitz himself had misunderstood this dynamic, and when he offered reflections in the 1967 reprint of The Poor Pay More, he conceded that it was a mistake to see the ghetto credit merchants as “nefarious exploiters of the poor" and believed that a more thorough analysis could reveal more about the “economic constraints that operate on these men." “Consumer Credit and the Poor."

  58. Hyman, Debtor Nation, 193.

  59. Adam Bernstein, “William Proxmire, Ex-Senator, Dies," Washington Post, December 16, 2005.

  60. U.S. Senate, “William Proxmire: A Featured Biography," http://www.senate.gov /artandhistory/history/common/generic/Featured_Bio_ProxmireWilliam .htm.

  61. “Consumer Credit and the Poor," 6-7.

  62. Ibid., 80-85. U.S. Congress, Senate, Committee on Banking and Currency, Subcommittee on Financial Institutions, “Financial Institutions and the Urban Crisis," 90th Congress, 2nd Session, September-October 1969, 151, 324-327. U.S. Senator Proxmire Reports to You from Washington, 1964-1977," http://content .wisconsinhistory.org/cdm/compoundobject/collection/proxmire/id/4972 /show/4793/rec/6.

  63. “Financial Institutions and the Urban Crisis."

  64. Michael Zweig, “Black Capitalism and the Ownership of Property in Harlem," Stony Brook Working P
apers, August 1970. A study of Harlem found that more than 85 percent of the businesses and properties in Harlem were owned by outsiders or nonresidents of Harlem.

  65. “Financial Institutions and the Urban Crisis," 428.

  66. Ibid., 9, 13.

  67. Ibid., 89-91.

  68. Ibid., 94-95. In 1967, SBA Director Howard J. Samuels created Project OWN as the government’s minority business aid program. The program was intended to funnel loans to black and white enterprises in ghetto areas. Though Johnson had supported the program, his heart was not in it, and it seemed that he was only using minority enterprise as a crisis management tool to deal with unrest. Largely a political ploy, the program was not robust—by the end of 1968, only 5.7 percent of SBA money went to minority businesses. Robert E. Weems and Louis A. Randolph, Business in Black and White: American Presidents and Black Entrepreneurs in the Twentieth Century (New York: New York University Press, 2009), chap. 4.

  69. “Financial Institutions and the Urban Crisis," 236.

  70. He even wrote a book devoted to small business. William Proxmire, Can Small Business Survive? (Chicago: H. Regnery, 1964).

  71. “U.S. Senator Proxmire Reports to You from Washington."

  72. “Financial Institutions and the Urban Crisis," 74. “Consumer Credit and the Poor," 30-38.

  73. “Financial Institutions and the Urban Crisis," 74-82, 101-106. “Consumer Credit and the Poor," 5-6, 34-36.

  74. “Financial Institutions and the Urban Crisis," 134.

  75. Hyman, Debtor Nation, 204.

  76. “Consumer Credit and the Poor," 9-10.

  77. Caplovitz, Poor Pay More, 183-184.

  78. Ibid., 192.

  79. Ibid., 95.

  80. Hinton, From the War on Poverty to the War on Crime, 50, 77.

  81. House Committee, Economic Opportunity Act of 1964, 305.

  82. Tyson, who was father of Neil deGrasse Tyson, suggested that the government deposit funds into black banks instead. Cyril deGrasse Tyson, 2 Years before the Riot! Newark, New Jersey, and the United Community Corporation, 1964-1966 (New York: Jay Street, 2000), 256, 490-491.

  83. Jacob S. Hacker and Paul Pierson, American Amnesia: How the War on Government Led Us to Forget What Made America Prosper (New York: Simon & Schuster, 2016), 251. According to economists Alberto Alesina, Edward Glaeser, and Bruce Sacerdote, the main reason the United States did not adopt New Deal era or European-style welfare programs was that the programs were seen to benefit black people. Alberto Alesina, Edward Glaeser, Bruce Sacerdote, “Why Doesn’t the United States Have a European-Style Welfare State?," Brookings Papers on Economic Activity 2 (2001): 3.

  84. Martin Luther King Jr., “Beyond Vietnam—A Time to Break Silence," Speech at Riverside Church Meeting, New York, April 4, 1967, http://www.americanrhetoric .com/speeches/mlkatimetobreaksilence.htm. In Clayborne Carson et al., eds., Eyes on the Prize Civil Rights Reader: Documents, Speeches, and Firsthand Accounts from the Black Freedom Struggle (New York: Penguin, 1987), 201-204. The total OEO budget was $1.7 billion in 1968 and $1.9 billion in 1969—an alltime high. By 1974, it was $328 million. Robert H. Hayeman, ed., A Decade of Federal Antipoverty Programs: Achievements, Failures, and Lessons (New York: Academic Press, 1977), 41. The cost of the Vietnam war by the end of the Johnson administration was over $100 billion. http://www.english.illinois.edu/maps /vietnam/domestic.htm.

  85. Lyndon B. Johnson, “To Fulfill These Rights," Commencement Address at Howard University, June 4, 1965. In Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, vol. 1 (Washington, DC: U.S. Government Printing Office, 1965), 635-640.

  86. Johnson, “To Fulfill These Rights."

  87. Taylor Branch, At Canaan’s Edge: America in the King Years, 1965-68 (New York: Simon & Schuster, 2006).

  88. Skrentny, Ironies of Affirmative Action, 105.

  89. Julian E. Zelizer, “Fifty Years Ago, the Government Said Black Lives Matter: The Radical Conclusions of the 1968 Kerner Report,” Boston Review, May 2016, http:// bostonreview.net/us/julian-e-zelizer-kerner-report.

  90. Nicholas Pileggi, A. Long, Smoldery Summer, NewYorkMagazine, June 21, 1982; National Advisory Commission on Civil Disorders, The Kerner Report (Princeton, NJ: Princeton University Press, 1968).

  91. The report was a follow up to his book with coauthor Nathan Glazer, Beyond the Melting Pot: The Negroes, Puerto Ricans, Jews, Italians, and Irish of New York City (Cambridge, MA: MIT Press, 1963).

  92. He had said at a conference in 1965 that the problem of black poverty “is practically the property of the federal government.” Hinton, From the War on Poverty to the War on Crime, 59.

  93. Daniel P Moynihan, “The Negro Family: The Case for National Action,” U.S. Department of Labor, Office of Policy Planning and Research, 1965, https://www .dol.gov/oasam/programs/history/webid-moynihan.htm.

  94. Ibid.

  95. U.S. Congress, House Budget Committee Majority Staff, The War on Poverty: 50 Year Later, A House Budget Committee Report, March 3, 2014, http://budget .house.gov/uploadedfiles/war_on_poverty.pdf.

  96. Katharine Beckett, Making Crime Pay: Law and Order in Contemporary American Politics (New York: Oxford University Press, 1997), 32.

  97. “The Wages of Hatred,” Wall Street Journal, July 18, 1966. For more on the backlash, see Rick Perlstein, Nixonland: The Rise of a President and the Fracturing of America (New York: Simon & Schuster, 2010), 121; Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (New York: New Press, 2011), 42.

  98. These rioters were described as having been “bred” from “broken homes, illegitimacy, and other social ills,” all of which have “warped the mind” of black youth, a problem that was terminal. Hinton, From the War on Poverty to the War on Crime, 4, 75.

  99. Ibid., introduction.

  100. Ibram X. Kendi, “Racial Progress Is Real. But So Is Racist Progress,” New York Times, January 21, 2017. Gerard DeGroot, Selling Ronald Reagan: The Emergency of a President (New York: I. B. Tauris, 2015), chap. 6; Alexander, New Jim Crow, 44.

  101. According to Michelle Alexander, those trying to reassert racial separation and hierarchy after Jim Crow ended found that “they could install a new racial caste system without violating the law or the new limits of acceptable political discourse, by demanding ‘law and order’ rather than ‘segregation forever.’ ” Alexander, New Jim Crow, 40.

  102. Wallace said that “the same Supreme Court that ordered integration and encouraged civil rights legislation” was now “bending over backwards to help criminals.” Ibid., 42. Senator Strom Thurmond suggested that any capitulation to integration demands would cause “a wave of terror, crime and juvenile delinquency.” Eddie S. Glaude, Democracy in Black: How Race Still Enslaves the American Soul (New York: Crown, 2016), 77.

  103. DeGroot, Selling Ronald Reagan, 162.

  104. Zelizer, “Fifty Years Ago.”

  105. The National Advisory Commission on Civil Disorders, The Kerner Report (New York: Pantheon Books, 1988), 1.

  106. Skrentny, Ironies of Affirmative Action, 99.

  107. Branch, At Canaan’s Edge, 560.

  108. Wil Haygood, Showdown: Thurgood Marshall and the Supreme Court Nomination That Changed America (New York: Alfred A. Knopf, 2015).

  109. King, “Beyond Vietnam."

  110. Michael E. Dyson, I May Not Get There with You: The True Martin Luther King, Jr. (New York: Free Press, 2000), 93.

  111. King, Autobiography, 350.

  112. This way, “we would place the problems of the poor at the seat of government of the wealthiest nation in the history of mankind." Ibid., 350-351.

  113. Gerald McKnight, The Last Crusade: Martin Luther King, Jr., the FBI, and the Poor People’s Campaign (Boulder, CO: Westview, 1998), 20-22. King, Autobiography, 353.

  114. King, Autobiography, 309.

  115. By 1967, SCLC was running Operation Breadbasket in twelve cities, and King reported that the operation resulted in 800 new jobs for black work
ers and $7 million in annual income for families. Ibid., 276.

  116. Peniel E. Joseph, Stokely: A Life (New York: BasicCivitas Books, 2014), 104.

  117. Perlstein, Nixonland, 123-124.

  118. Ibid. at 96.

  119. Rebecca Carroll, ed., Uncle Tom or New Negro? African Americans Reflect on Booker T. Washington and Up from Slavery 100 Years Later (New York: Broadway Books, 2006), 3.

  120. Stokely Carmichael, “What We Want," New York Review of Books, September 22, 1966, 5-6, 8. Skrentny, Ironies of Affirmative Action, 74.

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

  122. Peniel Joseph explains that Carmichael was Malcolm’s philosophical heir, having listened to his pivotal debate with Bayard Rustin at Howard while he was a student. Joseph, Stokely, 53.

  123. Manning Marable, Malcolm X: A Life of Reinvention (New York: Viking, 2011), 7. “Malcolm not only spoke their language, he had lived their experiences—in foster homes, in prisons, in employment lines. Malcolm was loved because he could present himself as one of them." Ibid., 480.

  124. Ibid., 187.

  125. Manning Marable and Leith Mullings, eds., Let Nobody Turn Us Around: Voices of Resistance, Reform, and Renewal: An African American Anthology (Lanham, MD: Rowman and Littlefield, 2000), 435.

  126. Malcolm X, Malcolm XSpeaks: Selected Speeches and Statements, ed. George Bre-itman (New York: Grove Press, 1965), 39.

  127. Ibid.

  128. Newton, Cleaver, and Seale had all been engaged in racketeering and had served prison sentences. Cleaver infamously admitted to rape. Peniel E. Joseph, Waiting ’Til the Midnight Hour: A Narrative History of Black Power in America (New York: Owl Books, 2006).

  129. Joshua Bloom and Waldo E. Martin Jr., Black against Empire: The History and Politics of the Black Panther Party (Oakland: University of California Press, 2013), 390.

  130. Ibid., 70-72.

  Chapter 6 The Decoy of Black Capitalism

  1. His personal beliefs on civil rights, according to his biographer, were “shallow, intellectual, and abstract rather than intense, emotional, and engaged." Dean J. Kotlowski, Nixon’s Civil Rights: Politics, Principle, and Policy (Cambridge, MA: Harvard University Press, 2002), 11.