In May the NAACP announced that Cornell Brooks, a 53-year old lawyer, minister and civil rights activist, would become its 18th president. Somehow, that news did not cause a ripple on the Dow Jones industrial average, the Nasdaq or the Standard & Poor’s 500 index.
Imagine Wall Street’s reaction if the NAACP had announced a new program that offered the financial-services industry a slice of a $12 trillion opportunity. That just might be enough to get the Street to pay attention—and that kind of attention just might make Cornell Brooks’ presidency matter.
According to one estimate, the lifetime cost to society of one high-risk youth who goes from juvenile detention to a juvenile correction facility to an adult prison is $3.8 million, while the lifetime tax contribution of that same youth if he goes from a high-quality after-school program to a publicly funded university for four years is $1 million. Combining the potential cost savings and tax payments, that’s a total contribution of $4.8 million per youth. Multiply that by the more than 2.4 million Americans who are incarcerated at this moment and you have a potential economic swing of nearly $12 trillion.
That’s an arbitrage opportunity for Wall Street. The same creativity that the Street used to invent collateralized debt obligations in the subprime mortgage frenzy could be channeled to developing financial instruments tied to the dollar benefits inherent in getting children into college instead of into prison.
I know it’s wildly counterintuitive to suggest any kind of link between black America and Wall Street. It’s as if they exist in nonintersecting universes: a black one dedicated to freedom, justice and rights, and a Wall Street one preoccupied with stocks, bonds and commodities.
But the absence of a meaningful connection between black Americans and Wall Street is a problem and perhaps an opportunity. The problem: Black America’s irrelevance to the financial-services industry makes it impossible to use the industry’s virtually unlimited political and economic power to our advantage. The opportunity: to reinvigorate our struggle for full participation in American society by finding a way to align at least some of our major interests with the Street’s singular and unwavering focus on making money.
As we grapple with racism in its 21st-century form, we need 21st-century tactics to combat it. In this century, harnessing the power of the market and the financial-services industry that shapes and dominates it, should be a powerful weapon in a new arsenal of civil rights and economic-empowerment strategies.
The Street exerts a commanding influence over both Democratic and Republican politicians. Bill Clinton’s treasury secretary, Robert Rubin, worked for Goldman Sachs prior to joining the administration and for Citigroup after leaving it. George Bush’s treasury secretary, Hank Paulson, was the former chairman of Goldman Sachs. Barack Obama’s treasury secretary, Jacob Lew, is a former chief operating officer at Citigroup. Republicans listen to oil and gas interests, Democrats to Hollywood, but both parties pay attention when Wall Street speaks.
And when Wall Street speaks, it’s always talking about one thing—money. Wall Street exists to make money. Its success at that is the source of its almost unlimited political power. And it is amoral—it does not care whether the things it does to make money are good for the greater society or whether it creates a once-in-a-generation catastrophe like the Great Recession.
If black America can link even a small part of its agenda to the Street’s self-interest, it could open a new front in our battle for a firmer foothold in the American mainstream.