Lessons from Baltimore: “Middle Class People Don’t Riot”
Theories abound as to what caused the recent Baltimore Urban Riot, and the vast majority of them focus their attention on the obvious problems of police, law enforcement, racism, profiling and possible abuse. But looking at these problems is like treating a cough as if it were a real cold. Social commentators and politicians tackle the effects of a problem, not the cause. They react to a problem instead of responding to it.
The problem with Baltimore and all the other urban riots in America ?? including Ferguson, Mo., and the Rodney King Riots in south-central Los Angeles ?? is the lack of a market economy.
Assuming race, policing, and profiling were systemic and national in scope, wouldn’t we see riots in middle-class black and brown communities? But we don’t. We don’t do it because middle class people don’t want riots or conflicts. They want to work hard, shop, and spend time with their families. This sense of aspiration is erased in poor urban communities where predatory lenders thrive and a credit score of 500 can be considered high.
The reality is that nearly 100% of all urban riots in America have happened where the free market economy failed or did not initially exist. The poverty of these largely underserved communities, combined with the stifling sense of lost hope among its young people, provides the perfect embers to ignite emotional and physical flames.
To help understand why these troubles are largely confined to poor black neighborhoods, let’s look back 150 years. On March 3, 1865, President Lincoln signed an act establishing the Freedman’s Bank, whose mission was to teach freed slaves about money and free enterprise. President Lincoln thought the bank was so important that he put it right within reach, locating it across from the White House in what is now the Treasury Annex.
Unfortunately, the dream was short-lived. Lincoln was killed five weeks later and the bank received no backing from his successor, Andrew Johnson. Frederick Douglass invested $ 10,000 of his own money (an amount equal to $ 20 million today) to try to keep the bank afloat, but the bank ultimately failed in 1874, wiping out more than half of the savings. of the 73,000 depositors, all former slaves.
It was said at the time that the failure of the Freedman’s Bank did more to repel freed slaves and America than 10 more years of slavery would have done. Today, more than 140 years later, dozens of African Americans still suffer from a lack of access to basic financial services and a basic understanding of the free enterprise system.
Our goal as a society should be to bring economic opportunities to these neighborhoods. It starts with financial education and ends with the implementation of free enterprise for all.
To help disgruntled adults, Operation Hope is teaming up with banks to provide financial education at bank branches. Our advisors serve as private bankers for the working poor, underserved, job seekers and the struggling middle class. The objective: to transform these communities of 500 credits into communities of 700 credits. After 23 years doing this job, I am convinced that apart from God or love, nothing changes your life more than increasing your credit score.
Operation Hope also works with youth, providing financial education and entrepreneurial training in schools. Gang violence and urban riots occur in communities where unemployment is rampant and young black men have too much free time. As my friend, civil rights activist Van Jones once said, “nothing stops a bullet like a job”.
But as a society we need to do a lot more, and banks in particular are well positioned to help create economic opportunities for Sandtown-Winchester in Baltimore and other similar neighborhoods. Nobody expects banks to start covering these branch areas ?? at least not yet ?? but nonprofits and community groups need banks and bankers to help spread the message of economic empowerment. If we raise the collective credit scores of these neighborhoods, the riots will stop. Unscrupulous check tellers, payday lenders and securities lenders will be bankrupted, replaced by banks and credit unions.
Baltimore is a real heartbreaking tragedy for America in 2015, but it’s not necessarily bad news. The point is, you can’t have a rainbow without a storm first. Let’s go.
John Hope Bryant is the founder and CEO of Operation Hope.