Posted on 06/21/2020 5:13:42 AM PDT by EyesOfTX
Some of you may know that I’m a historian of American banking and finance—that was my original research area and I probably wrote 4-5 books on the subject. What makes that all the more remarkable is that I never took a formal course in banking, finance, or even economics in my life. It was all “on the job training.”
So in a recent chat with a former co-author, Professor Charles Calormiris of Columbia University, on an article that came to be the most-cited piece I’ve ever written (“The Panic of 1857,” Journal of Economic History), our conversation naturally turned to banking. He began discussing research from his 2015 book “Fragile By Design” with Stephen Haber. He mentioned that something they found in that book now seemed all the clearer in light of recent riots.
In the 1990s through the early 2000s, there was a merger wave occurring among banks and financial firms. Many of you will remember your local, hometown banks began to disappear, replaced by J. P. Morgan Chase, Citibank, Wachovia, and Bank of America. It turns out that in the late 1990s, in order to gain congressional approval for these pending mergers, the banks needed to get certain legislators on their side. Legislators who were, shall we say, highly persuaded by minority communities. More to the point, the big banks needed leading black organizations and leaders to support their mergers.
" " Now, you ask, what possibly could be the benefit to minorities of having giants like Citibank or Chase take over more local banks? Under normal circumstances, nothing. But shakedown artists like Rev. Jesse Jackson and the Rev. Al Sharpton always know where to find a buck. In this case it was “community reinvestment.” Banks, they figured, could be “encouraged” to make massive loans in minority neighborhoods. Gee, someone might have to, er, “direct” such lending, wouldn’t they?
Absolutely. May I introduce NCRC, the National Community Reinvestment Coalition. Bank loans to the “minority community” were funneled through the NCRC—no doubt with the reverends taking a reasonable fee for their services—and in return, the black community wrote letters and gave testimony supporting the mergers. Just how much money are we talking about here? Two trillion dollars.
That money began to run out in 2015. The loans were usually either 10- or 15-year loan programs. “What’s the big deal? Just go back and shake them down again,” you say. Not so fast: the mergers are already complete. The banks don’t need the black community anymore. Just where were the bulk of these loans made? Oh, my friends, you know the answer to that. Calomiris and Haber found the usual suspects: Baltimore, St. Louis, Chicago—virtually anywhere there has been a riot recently.
It’s abundantly clear that one (perhaps only one, but perhaps the most important) of the factors that kept the streets quiet was the “walkin’ around money” spread by the banks seeking mergers. While the “Black Lives Matter” corporate coercion may produce relative dabs of cash, the leaders of these movements cannot hope to make up a $2 trillion shortfall. There may be much more to these riots than just “police brutality.” The gravy train has run out, and for now, even the ransom payments from corporate America won’t come close to replacing it.
Larry Schweikart is a historian, the co-author of A Patriot’s History of the United States with Michael Allen, author of Reagan: The American President, and is “America’s History Teacher” with a full US and World History curriculum for homeschoolers and other educators at www.wildworldofhistory.com.
That is all.
In other words, the charlatan wing of “black leadership” vacuumed up $2 trillion in reparations which didn’t make it into black communities.
A bank historian should recognize the role in the Community Reinvestment movement of Msgr Geno Baroni and the Baltimore version of the Alinsky movement, as contrasted with the various Rochester, Chicago and Arkanss versions of Alinsky.
The Catholic Reverend did far more for the movement than the loudmouths.
Interesting...
Thanks for your post. I am from Maryland, but I had never heard of this jerk.
This would be another fine example of a nefarious deed that spun into unintended and unforeseen consequences.
Thanks again, Democrats. And thanks again to spineless Republicans who refused legitimate oversight.
I am failing to inderstand the precise pathway between bank losn programs running out and burning and looting. Are you saying that people are rioting because they can’t get mortgages and business loans? I truly don’t understand the connection.
I think he’s saying that, because the banks have been so consolidated that they no longer depend on a given local/regional market’s business or support, the racial shakedown artists of the larger Democrat-run cities and states can’t shake them down in the old way any longer, and are now running out of money.
In a sense, the parasites have lost their “hosts”.
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ZZZZZZZZZZZZ......
Okay—l guess one can see that if local banks are no longer making loans in a community, it will go downhill. But it’s still hard to make the leap that the timing of it led inexorably to these particular riots. However, math and timelines have never been my strong suit.
That seems a far reach. There is no evidence that the CRA component of bank mergers actually generated much in the way of “walking around money.” Moreover, history abounds with remote and complicated causes for events so we do best to look first to proximate causes for the sake of logic and coherence. A better explanation is that the rising expectations and Trump-era prosperity were suddenly taken from the Black community by the economic effects of the coronavirus and replaced with idleness and discontent. And we all know what the devil does with idle hands.
bookmark
The shift to the East Coast was also accompanied by the disappearance of small, community banks who were gobbled up by bigger Regional/National banks and then finally closed.
While this all correlates to the timeline above nicely, this is IMO a case of correlation <> causation. I've been in the Banking Sector for almost 20 years now and while I may not know anywhere near as much as LS does from a historical perspective I do know this: banks go where the money is. Increasingly the money is NOT in the big urban areas. The financial profiles of largely under-educated/uneducated urban masses just do not meet the requirements of a profitable clientele.
Just the facts as I see & know them.
In Chicago the Baltimore version of Alinsky was also known as: BOTH AND. Both protest and non-protest community development with Public-Private Partnerships.
Jim Dimon of JP Morgan Chase is now the poster child for the success of Msgr Geno Baroni.
No. The race hustlers were using access to low-cost/no-cost loans for “business” (basically a form of walkin’ around money) to both directly keep their minions pacified and to not go out and rabble rouse. Their money ran out five years ago and they have started to look for other shakedowns.
Correct. They have to find other ways to shake down corp. America (i.e., BLM).
Elijah Cummings brought enough money ‘home’ so every black person in his district - every man, woman and child - - could have an extra $20,000 a year in income.
None of those billions went to everyday black citizens. In Elijah’s scam the money went to friends and supporters who ran non-profits. They justified their organizations by passing around the same 600 people for proof they were ‘doing good for the community’...
Corrupt democrat black ‘leaders’ primary skill is playing the black community for fools and profit. And playing whites for cash and advantage...
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