Wall St. and Business Wednesdays: E-Letter To Reverend Al Sharpton Re: Economic Advice And The Resignation Of Your Campaign Manager
I hope and pray this memo finds you well. It was really wonderful seeing you last week. You looked well, determined, and full of the Spirit. In light of the resignation of your campaign manager, Mr. Frank Watkins; the mischief that I already see the media making over it; and my fervent desire that BlackElectorate.com viewers continue to think critically and seriously about your campaign, I have decided to make public, the memorandum of advice that I wrote to you last week in preparation for your debate on CNBC. Another reason that I am making this memorandum public is because of a great concern that I have regarding the dynamics of non-Black advisers hired by Black politicians (For the benefit of BlackElectorate.com viewers, Mr. Watkins is a White Male).
Unfortunately I have noticed in my years of dealing with Black politicians that there seems to be an unjustified deference to and preference for - displayed by Black politicians - advice coming from White advisers; while there simultaneously appears to be a reluctance on the part of these same White advisers to connect Black politicians with Black consultants, intellectuals and opinion leaders. Part of the basis of this behavior is a belief, held by many Black politicians (regardless of political party or ideology, but very noticeable among Black progressives and conservatives, I find) that somehow Black politicians need the support of a narrow group of Whites more than they do that of a wide cross-section of the Black community. The result of this has been that Black politicians are frequently seen and more comfortable with an elite group of White thinkers, media, and donors than they are with the Black variety or the masses of Blacks. This is a real problem within the Black political establishment that very few people feel comfortable talking about. But it is real.
I hope that you can avoid what I see happening with many Black political leaders - members of the Congressional Black Caucus (CBC), for example - who surround themselves with White staff members and political advisers who do not understand or respect the nuances of the Black community, and who serve as buffers who block Blacks from having access to their "bosses". These White advisers often persuade their employers into believing that appealing to a White minority is more important and a better political, governing, or legislative strategy than 1) being accountable to the Black masses 2) accessible to Black opinion leaders and professional advisers; and 3) publicly demonstrating the principles of unity and Brother and Sisterhood, within the Black community. The byproduct is a muting or watering down of issues - by Black candidates - that are obviously race-centered.
As you know, it was not your campaign manager, Frank Watkins, who was responsible for our meeting last week (although he was present).
After we met, I spoke to Mr. Watkins by phone. We had two brief cordial conversations and we agreed that in keeping with our meeting and your preparation for the CNBC debate that I should provide a written outline of some of what we discussed. So, I crafted a memo and sent it to Frank Watkins via e-mail. He read it said it was fantastic and assured me that he would discuss it with you and set up a meeting for us to discuss its contents and implications in more detail, possibly this past weekend. The meeting never happened and I never heard back from Mr. Watkins. While I do not know whether or not you received the memorandum; I was not surprised that a follow-up meeting was not set up.
For nearly four years I have attempted to meet with and interview Rep. Jesse Jackson Jr.; and was told by Mr. Watkins (who was serving as his communications director), that the schedule was too full. I did not reveal to Mr. Watkins that Rep. Jesse Jackson had actually corresponded with me via e-mail and had been reading some of my writings, and stated that he wanted to meet with me and work closer together. My request for an interview grew out of that e-mail dialogue that had already begun, before the request was made. I did later inform Mr. Watkins that Rep. Jackson wanted the meeting and interview, to no avail.
A couple of years ago (after calling Rep. Jackson's office again to schedule an interview), Mr. Watkins, with a negative attitude, questioned me about the political disposition of BlackElectorate.com. When I told him that we are non-partisan; he mocked my answer and with an incredulous tone said, "Everybody says that, now what are you really - conservative, progressive, liberal...?". I told him that we were a Black-centered webiste that covered issues from all angles. Mr. Watkins, sounding irritated, said he would get back to me. He never did. I thought to myself how offensive, ridiculous and pathetic it was for Rep. Jesse Jackson to have a person representing him with this type of spirit. I have experienced the same phenomenon with White staffers who represent Rep. Maxine Waters. There are others. It is a shame.
Having said that, I have most certainly encountered a few Whites who have been more respectful of the self-enlightened interests of Black people than many of our own people, as well as supportive of the mission and efforts of BlackElectorate.com.
There is a principle that I am directly and indirectly touching on here that I hope to discuss with you privately, the next time I see you, God Willing.
Without our community dealing honestly with it, we will not make any progress, in politics, or otherwise. I think our collective condition right now proves me correct. And I am sure that you are suffering - as you fight hard, on a daily basis, for our people, and to keep your campaign going - as a result of the violation of this principle by Black people.
So, in case you did not read it (and again, I have no evidence that Mr. Watkins did not give it to you as he stated he would), and for the benefit of the BlackElectorate.com viewers, here is an edited version (I have taken out certain parts that are more private in nature) of the memo that I wrote you:
To: Rev. Al Sharpton
From: Cedric Muhammad
Re: Advice For Your CNBC Economic Debate
Date: September 24, 2003
Please find below a very brief outline of some of the salient points you and I discussed this morning as well as some additional information. I think that if you can authoritatively and creatively speak to the nuances of the entire Black economy - underclass, labor, and capital - your message will disarm the other candidates, raise your profile on the issue of economics, and broaden your appeal in an important segment of the Black community. I am convinced that your consistent high-profile attention to the subject of economics, will result in your becoming the candidate of choice of the Black business establishment (B.E. 100 and chambers of commerce etc...), who I believe will support you financially, throughout the country, once they hear you consistently speaking their language, as articulately as you do that of the Hip-Hop generation and the civil rights community.
So please digest these brief comments and see how they resonate within and let's engage in a dialogue over how you might better position your campaign on this subject.
Note: Available upon your request, I can provide you with several articles that I have written on the subjects of foreign exchange rates, monetary policy and deficits, subjects that CNBC intends to bring up according to what I have read.
1) Black Laborers. According to the Department of Labor, the Black civilian unemployment rate was 10.9% in August; but it was 11.8% in June (seasonally adjusted). On the other hand the White civilian unemployment rate was 5.4% in August; and 5.55 in June. Black Teenage unemployment (16-19 years old) was 30.0% in August; but it was 39.3% in June. The White teenage unemployment rate was 15.0% in August; and 16.5 % in June.
Source: Department Of Labor, http://www.bls.gov/news.release/empsit.t02.htm
- You can powerfully mention that Black teenage unemployment approached 40% this summer, a dangerous level (others can make an inference or read the implications of this).
- You might mention (to emphasize a racial disparity) that Harvard Labor economist Lawrence Katz estimated that the Black unemployment rate is artificially low because it does not consider Black inmates. In 2000, he argued that while the Black unemployment rate was 7.9%, if inmates were factored in, the rate would have been 9.4% but the national rate would have only moved upward from 4.1% to 4.3%.
- You might mention that while you recognize progress under the previous administration, the gains of the "Clinton boom" were more tenuous in nature for Blacks and eroded more quickly. Only months into the Bush administration, in April of 2001, Black unemployment dramatically jumped from 7.5% to 8.6% for Blacks, while holding steady at 3.7% for Whites.
2) Black Investors. According to a survey of Black and White households earning over $50,000 annually by Ariel Capital Management and The Charles Schwabb Corporation: "The recent bear market drove a significant percentage of African- American investors out of the stock market in favor of real estate and more conservative investments, including keeping more money in cash.
After five straight years of steady increases in the percentages of African-Americans who own stocks, only 61% of Blacks had money in the stock market last January and February when the survey was conducted. This is down from 74% last year and approaching the 57% level of Black stock ownership in 1998, the first year of the survey. White stock ownership, meanwhile, is at 79% this year, which is virtually unchanged over the last six years.
...The bear market of the past two years, the worst since the Depression of the 1930's, has also left investors decidedly less confident in the stock market. The percentage of Blacks who agree that, the stock market continues to be the best place for long-term investing, has plunged from 67% to 46% since 2001, while the percentage of Whites agreeing with this statement has dropped from 82% to 62% since 2001.
Meanwhile, Blacks who, just don't trust the stock market with [their] money, rose to 49% this year, compared to 38% last year. For Whites, 33% don't trust the market today, compared to 25% last year."
- You can say that Blacks have been disproportionately affected by the bear market and that the combination of rising unemployment, a sinking economy and a bear stock market have made it impossible for Blacks to accumulate capital under the Bush administration, as workers or investors. This area should resonate with the CNBC viewers and should distinguish you from the rest as none of the other Democrats speak about Blacks as investors in capital markets.
3) Black Entrepreneurs and White Small Business Owners. Blacks are 50 percent more likely to engage in start-up business activities than whites. Hispanic men are slightly more likely than white men to be involved with start-up. Approximately 26 of every 100 black men and 20 of every 100 Hispanic men with graduate education experience report efforts to start a new business. This compares to 10 of every 100 white men with graduate education experience.
Source: "The Panel Study of Entrepreneurial Dynamics" - a national study of entrepreneurship funded in part by the Ewing Marion Kauffman Foundation.
"Every year, over a million people in this country start a business of some sort. Statistics tell us that by the end of the first year at least 40 percent of them will be out of business. Within five years, more than 80 percent of them - 800,000 will have failed"
Source: pg. 2. "The E-Myth Revisited" by Michael Gerber, from statistics compiled by the Department of Commerce
- You can mention that no one is speaking to this boom in minority entrepreneurship that is sure to increase as a result of increased layoffs, and while tax cuts abound for the wealthy corporations that pay dividends, very little is being done to help those that create jobs and are the real engine of the American economy from the ground up.
4) Failed Economic Empowerment Initiatives. Pages 101 to 103 of your book, Al On America, beautifully lay out the contradictions of economic empowerment initiatives as represented by empowerment zones and the "new markets initiative" - a collaborative effort between President Clinton and Rep. J.C. Watts. While corporations move into the inner-city historic Black business districts like Welton St. in Denver are closing down. Something is wrong with the economic polices and concepts of empowerment and development coming from government.
- You could paint a picture of how all over this country in distressed inner-cities (or rural areas) like Harlem, the only ones receiving welfare are corporations who are taking advantage of programs that are promoted as benefiting the poor, economically. But where is the proof of their success? Unemployment is rising, minority business districts are suffering, and business start-ups are failing.
5) Minority Venture Capital. According to a new Kauffman foundation report, "Minorities And Venture Capital", minority-focused venture capital firms that invest in minority business enterprises are outperforming those that invest in the S&P 500. Yet, the government-endorsed venture capital program - the Small Business Investment Company (SBIC), run by the Small Business Administration (SBA) - is making it harder for minority venture capital firms to qualify as SBICs to access government funds. SBICs are privately owned and managed firms that leverage their own capital with government-backed loans to provide equity investments and long-term loans to small businesses. The SBA has established a new standard that requires eligible firms to have at least two principals experienced in venture investing with "above average" track records. This new stipulation, up from the previous standard of one such principal, makes it harder for minority-focused venture capital firms to become eligible to qualify as an SBIC. One Black venture capital firm, Diamond Ventures, has filed a $50 million lawsuit against the SBA due to its being rejected by the program as a result of the new rule.
SBA figures show that minority-owned small businesses accounted for 10.24 percent of all SBIC financings in fiscal 2002 but received only 4.27 percent of the total dollars. Black-owned businesses received only 0.68 percent of all SBIC dollars. Women-owned businesses also received less than 1 percent.
Source: Kauffman Foundation report, "Minorities And Venture Capital" and "Black VC Firm Sues SBA For Alleged Bias", New Mexico Business Weekly
- You could show, using this example, how "access to capital", even in the face of above- average returns on investment, is still denied to minorities. This issue is bubbling up in the world of private equity and venture capital and you could show leadership and display sharp understanding of the investment world by raising it to national attention on CNBC.
Sincerely - Your Brother,
Wednesday, October 1, 2003