Did anyone pay attention to an article buried in Friday’s edition of The New York Times detailing the return of the good Reverend Jesse Jackson? Probably not and that puts your author’s mind at ease. The good reverend is now taking the helm of many in Hollywood and spewing their newest mantra ‘microcredit’ loans. While micro credit loans, which can be defined as loans extended to very poor entrepreneurs in impoverished areas, work often, they are often a waste of resources due to the immediate surroundings inhabited by the recipients.
Well now Jesse Jackson has been able to apply the concept of this type of lending, which is used as a vehicle in primarily developing nations, to the good ole USA. He apparently has had a spark lit under him to appeal to the masses and commercial bankers to start lending more to minorities. Despite my prior entry where I argue the relevancy of him and others described by the media machine as ‘civil rights leaders’ when Black America has experienced a tremendous increase in Black owned businesses and income class advancements, Jackson still thinks more can be done.
While speaking at the Detroit Economic Club he described how banks won’t lend to poor people. Your author imagines now that Black America has made such economic advancement that Jackson will have to edit his speeches to include poor people in general not just Black. He believes that microcredit loans of $5,000-$35,000 per recipient will be enough to jumpstart the inner city economies. This all sounds great to your author but does the recipient have the first clue on how to run a business? Maybe we can pay to have some evening classes for these lucky borrowers?
Let us all remember how Reverend Jesse Jackson and his gaggle of believers protested the construction of a Wal Mart, a proven employer, in Chicago. Currently Wal Mart has been accused by Jackson of buying off their critics to silence him. In 2006 Wal Mart donated a combined $8million to the United Negro College Fund, National Urban League, and The Congressional Black Caucus Foundation and to two Historically Black Colleges. Nowhere is their any mention of monies finding their way to Jackson’s Rainbow PUSH Coalition.
The last thing any member of our society wants to see is Jackson at the helm of any economic reform. For if you do, then you must first read about Noah Robinson Jr., Jackson’s half-brother. Robinson was involved in a myriad of schemes, which were the result of Rainbow PUSH boycotts against corporate America and the remedy was for them to dole out contracts to minority owned businesses. This resulted in Robinson in obtaining franchises with Wendy’s and Church’s Fried Chicken. Additionally Robinson jumped in the construction business under the guise of the affirmative action clause and upon receiving a particular job would turn around and subcontract it out to another firm, often one that was White-owned. Robinson was also up to his eyeballs with his association Chicago’s notorious street gang Black P-Stone Rangers (later known as the El Rukn gang). Why doesn’t the good Reverend speak of his half-brother? Maybe because it would involved a collect call from a federal prison. Noah Robinson, Jr. was convicted in 1989 of murder, murder conspiracy and accessory, subsequently sentenced to life in prison.
Another threat being seen by your author is the rise Eliot Spitzer, a product of the New York political scene. This so called do gooder and looking out for the people type fellow has managed to slip easily by the critics. He is currently the Attorney General for the State of New York. He is currently running for the state’s governorship.
Spitzer has spearheaded several highly publicized legal attempts. One case in 2002 involved the subpoenaing of 24 non-profit pregnancy crisis centers. The charge was the clinics dissuaded women from seeking abortions. Spitzer then charged a group of investment backs for inflating stock prices and the cash windfall was a $1.4 billion settlement. Following this Spitzer and company went after mutual fund brokers and their allowance for hedge fund investors to buy mutual fund shares at often lower prices. This resulted in another billion dollar settlement in fines.
In 2005 Spitzer went after AIG and their chairman Hank Greenberg in what would be his most well-known case. In a double whammy Spitzer went after insurance brokerage firms, most notably Marsh & McLennan for drumming up profits by diverting customers to the most costly insurance policies. Spitzer was not so loud when it was uncovered that the higher premiums only accounted for 5-6% of gross revenues produced by this group of brokers. With regards to Greenberg and AIG, Spitzer displayed in front of the television screens with zest that both company and owner were involved with fraud, securities fraud, common law fraud and other insurance law violations. The press went nuts with these charges and the price of AIG stock dropped. In the end the charges against AIG and Greenberg were dropped.
This year has been no different for Spitzer. In early 2006 Spitzer went after chipmakers for price fixing. This too resulted in a cash windfall totaling $730 million. However one figure in Spitzer’s crosshairs is Dick Grasso, retired chairman of the New York Stock Exchange (NYSE). In August 2003 it was revealed that Grasso received a retirement compensation package totaling $140 million. Then in May 2004 Spitzer’s office sued Grasso over the compensation package. Spitzer claimed that the NYSE was a non profit and their compensation was governed by the State of New York. However an exception may be in order as it relates to the NYSE. They facilitate security transactions by essentially providing a market for traders and floor to ensure such. Since these securities and the investment industry falls under the final word of the Securities and Exchange Commission (SEC), then why weren’t they questioning Grasso’s compensation? Furthermore who determines the appropriate pay for Grasso? If NYSE is non-profit then why do seats on such trade at premiums? In fact given the obsolete model when compared to other modern exchanges why are they even allowed to exist with their open outcry floor? The policies of the NYSE are determined by the seat holders and this includes compensation.
Your author could care less if Spitzer becomes governor of New York. All he has been able to accomplish is getting defense lawyers rich and more government oversight, which historically shows that only the consumer will lose out. No what concerns your author is if his eyes see the Presidency and what the ramifications of his mindset would bring upon our nation.
Whether these pirates of the free capital markets are looking out for themselves in the name of humanity as with Jackson or causing more regulatory oversight as with Spitzer, one should not be fooled by what their long-term impact could mean for practicing capitalists. For if these individuals actually knew something of significance regarding the free market they wouldn’t be criticizing it but rather they would be an active participant.
