Asset Building vs. Financial Justice

Mark Winston Griffith

Asset Building vs. Financial Justice

This past week the Federal Reserve Banks of Boston, New York and Philadelphia, in cooperation with the Corporation for Economic Development, held a conference in New York that is part of a series of regional forums on "asset-building policy products and programs".

For the uninitiated, there is a flourishing asset-builders movement made up of people and organizations from all over the country who are working on helping low-income people build wealth through savings and investments, home ownership, micro-enterprise and education. The movement is predicated on the well established argument that it is a deficit in assets, even more so than income, that keeps people locked in poverty over generations.

Similarly, a couple of months ago, there was an equally high powered gathering of community reinvestment and consumer justice advocates that was convened by the Ford Foundation. The folks in this room work on forcing corporate America and government regulators to establish policies and practices that promote affordable financial services for low-income consumers and that don't strip wealth from low-income neighborhoods.

The backdrop behind both gatherings is a financial services industry that is changing at light speed and falling over itself to get in on the profits that are being made among the "unbanked", the new euphemism for poor people living without functional relationships with banks.

Except for a few overlapping people at these gatherings, these two camps have inherent mistrust of each other. Where the asset-builders see opportunity in this brave new financial world, community reinvestment/consumer financial justice people see peril and exploitation. Where the asset-builders talk more about stimulating economic development, the reinvestment and justice crowd focuses more on protecting people who are in the bulls-eye of unhinged capitalism.

Interestingly, despite the different ways in which they engage the world, both are on the right track. And both sides need to talk to each other more. There has to be a way of extolling the virtues of homeownership and entrepreneurism without slipping into simplistic, up-by-your bootstraps, cliches. There has to be a way of talking about individuals lifting themselves out of poverty that carries an aggressive critique of an economic system which sucks the life blood out of low-income communities.

Comments

It's good to see the progressive movment start to look at ways to build capital. In Spain there is a huge movement built around cooperatism which even the government has set up incentives for. It's time we realize that there is a midway between economic explotation through unhinged capitalism and communism.

The midway is where everyone's quality of life is enhanced from the profit a capitalist system genterates. We must stop the greed which exploits people for the sake of profit maximization. We need a more equal distribution of wealth as well. These are all issues I feel there needs to big a big discussion about. This would make a good forum or conference in which DMI could organize and take the lead on.

This also helps in the area of funding the progressive movement. Why must we always rely on the Soros's of the world? I've always heard about the deep pockets that laobr has, and they do have some money, but we can't only rely on these groups and people.

The reason the right is so much more better financed is because they are aligned with greedy capitalist corporations. But the question I now pose is, why doesn't the left align with businesses that are not greedy? Now I know there are not many but we should look to venture capitalists on the left who could possibly fund some of them, and as they make profits the movment could benefit from that. Sites like Coop America are where we need to start.

We need to support those green businesses and by green I mean economically, socially, and enviornmentally doing the right things. And in turn donations from these businesses will help fund the new progressive movment which I might add needs to start finding common ground as well. We can no longer remain as splintered as we are. But that's another topic in itself. I'll just say that I hope to see enviornmentalists and anti-war people mobilizing to end militarism, racism, and economic explotation because any movement no matter where you are coming from can find common ground on those three things.

If ever there was a quagmire issue for progressives, it would have to be asset-ownership and wealth: on the one hand, turning over the urban poor to the dogs of investment banking seems an anathema, but on the other hand, one cannot really get ahead in this world (especially on a generational level) without assets to leverage. It is all the more disconcerting when we see the investment community suddenly taking an interest in the "unbanked."

Here in my city of Rochester, we have the extra problem of lead paint contamination: 95% of the housing in Rochester was constructed prior to lead paint being made illegal for use in homes, and very few of those homes have been verified as lead-safe. We are only just now beginning to work on legislation to deal with this issue. So even if a person were to buy a house, they might be buying a contaminated mess that will end up costing them a fortune in repairs and inspections before they are allowed to move into it.

It is a sad commentary on the credit-obsessed culture we live in.

However, I think that the only real solution to the quandry is a commitment among the progressive community to an end-to-end support system for low-income investors. By this I mean that those people on the low end of the income spectrum need to be able to find solutions to thier problems that credit agencies rarely apprise them of. It's not about hand outs, but there are so many different avenues in the financial world that you need to be an accountant to ever hope to keep up with half of them. That's why the rich can invest and the poor can't: it's not about having money exclusively, its about having the intellectual resources (in the form of your own CPA, lawyer, and real estate broker) to make the most of your money.