The more I see the statistics relating to the so-called Black Economy and Black Buying Power, the more desperate my message becomes and the more insulted I feel. How can we get so excited about having an annual aggregate income of more than $1 trillion while we are at the bottom of every economic category in this country? We create vast wealth for others at the expense of creating and retaining wealth for ourselves? Black America is operating at a huge trade deficit. We must change that.
Just as the government is concerned about the national trade deficit, Black folks should feel the same about ours, and we should finally do something about it. Our trade deficit is horrendously out of kilter, and it’s getting worse every day. Oh yes, I almost forgot; we are currently enthralled with who will be our next president, and it’s difficult to draw our attention away from that circus, isn’t it? But can’t we walk and chew gum at the same time?
We cannot afford to neglect our trade deficit while we discuss politics as usual and prepare to cast our votes for folks who either don’t care about us or take us for granted. What a choice, huh?
Well, we have other choices. We can choose to redirect more of our $1 trillion toward our own businesses; we can choose to start and grow more businesses; we can choose to create more jobs for our children; we can choose to teach our children how to be entrepreneurs; we can choose to pool our dollars and leverage them to our own benefit; we can choose to use our dollars to create more conscious Black millionaires; and we can choose economic freedom over economic enslavement and modern-day sharecropping.
Several years ago, I read an article by the so-called Black conservative, Larry Elder, in which he stated, “…despite slavery, Jim Crow and racism, the progress of American Blacks is simply astounding. If Black America were a country, it would be the 15th ‘wealthiest’ country in the world.” He was using Gross Domestic Product (GDP) to prove his case.
A little Economics lesson is in order here. First of all, GDP and wealth are not the same as annual income. GDP is a collective measure of income produced per capita by a nation’s citizens. “Black America would be ranked 34th in per capita GDP at 23,000 each. (The entire U.S. per capita amount is more than $53,000.) Add to the equation the cost of living in this country, and Blacks would rank 44th in the world.” (Source: Pundit Fact, By Derek Tsang, September 2014)
The components of GDP are consumption, investment, net exports, government purchases, and inventories. Consumption is by far the largest component, totaling roughly two-thirds of GDP.
Blacks save and invest very little. Exports? Not much going on there either, although our brothers and sisters in Africa and the Caribbean eagerly await the day when we’ll get our act together and start taking care of business. Government purchases? Well, we have a lot of government jobs, if that counts. And finally, our inventories are not much to speak of either. Consumption? Black folks really make the grade in that category. Our consumption is as high as 95 percent, and most of what we buy is from businesses other than our own.
Using aggregate income to say we would be the 15th “wealthiest” nation in the world is absurd. Currently, Blacks hold about 2 percent of this nation’s $85 trillion wealth, which is mostly tied up in home ownership, much of which was lost during the housing crisis of 2008.
We must stop being mesmerized and lulled into complacency and false pride regarding our aggregate $1.2 trillion income. We have a dangerously high trade deficit, and we should be working to reduce that deficit by producing and selling more.
Yes, that line about Blacks being the 15th richest “country” in the world sounds good. It’s balm for our injuries, consolation for our wounded psyches, and ammunition for those who say, “We’ve come a long way, baby!” But what good is it doing us if we consume everything someone else makes, fail to save a minimum of 10 percent of what we earn, have no import/export relationships with Africa, the richest land in the world, and fail to control the distribution of our products? What good does it do us to have a $1.2 trillion income if we are in a constant trade deficit with other groups in this country?
The Black trade deficit is way out of balance, and we had better get busy fixing it before we become totally dependent on “foreigners” to supply our sustenance. No one can take care of us better than we can take care of ourselves. We proved it once upon a time; we can do it once again.
Jim Clingman, founder of the Greater Cincinnati African American Chamber of Commerce, is the nation’s most prolific writer on economic empowerment for Black people. He can be reached through his website, blackonomics.com. He is the author of Black Dollars Matter: Teach Your Dollars How to Make More Sense, which is available through his website; professionalpublishinghouse.com and Amazon Kindle eBooks.