The Pyramid Scheme that is Racial Capitalism
On August 26, a lone white gunman, 21-year-old Ryan Christopher Palmeter, fired 11 rounds from his semi-automatic weapon into the windshield of a car parked outside a Jacksonville Dollar General, killing the African American driver. Then he walked into the discount store, and fatally shot two other African Americans before turning the gun on himself.
Palmeter left behind a manifesto indicating his displeasure with African Americans, reminiscent of another 21-year-old white gunman, Dylan Roof, who eight years earlier sat outside the Emanuel AME church in Charleston, South Carolina. Finishing off a bottle of Smirnoff’s Ice, he pulled a Glock handgun from his waistband, walked into the church and opened fire, killing a pastor and eight of his parishioners, all of them Black.
Roof’s objective, he wrote in his manifesto, was to start a race war by sounding the alarm and alerting his fellow whites to the African Americans who “are raping our women and taking over the country.”
In response to the Jacksonville shooting, President Joe Biden noted that the attack coincided with the 60th anniversary of the March on Washington, and then, the cognitively impaired president of the free world declared that “white supremacy has no place in America.”
All of those Black corpses suggest otherwise.
The Anti-Defamation League attributed 25 homicides to right-wing extremists in 2022, of which 21 were at the hands of white supremacists like Payton Gendron, the 18-year-old gunman who walked into a Buffalo grocery store and opened fire, killing 10 and injuring three, all African Americans. Similarly, on duty law enforcement officers killed at least 1,096 people in 2022–more than 3 people per day on average–representing the deadliest year on record for police violence since The Washington Post began tracking the slayings nationwide in 2015.The Post database also found that while nearly half of all of those slain by police were white, African Americans are 2.5 times more likely to be killed by on-duty police than are whites.
And the Gun Violence Archive identified 647 mass shootings in 2022 and 690 in 2021. Both figures are more than double the number of mass shootings, 282, in 2014 when the Archive first began tracking such assaults, and are commensurate with an FBI analysis of 2019 data that found that the number of hate crimes had increased by 42 percent over a five-year-span.
That figure represents the highest nationwide total since the onset of the Great Recession in 2008, and is predicated mostly on a spike in hate crimes targeting African Americans. Analyzing data submitted by more than 15,000 state and local law enforcement agencies, the FBI identified 7,759 hate crimes, 2,755 of which identified Black victims, or 40 percent more than the previous year. Anti-Asian assaults increased by 70 percent over the same period, but the aggregate numbers were relatively minuscule, from 158 to 274, while anti-white violence rose by 16 percent to 773. (Attacks targeting Muslims and Jews fell by 42 and 30 percent respectively over the same span.)
Emblematic of that trend, the number of reported hate crimes in Los Angeles County rose by 23 percent in 2021, to 786, representing the highest total in nearly 20 years, according to LA County’s Commission on Human Relations. African Americans account for only 9 percent of the county’s population, but nearly half, or 46, percent of the total number of victims. Dominique DiPrima, the African American host of an AM radio show in southern California, told the Los Angeles Times:
Anti-Blackness is the tip of the sphere. It’s almost like we’ve normalized hate against Black people. It’s the default.
Capri Maddox, executive director of Los Angeles’ Civil Rights Department, told the Times that the city’s numbers are a microcosm of the country as a whole:
The FBI has been tracking hate crimes for 30 years and the consistent number one population of victims are African Americans.
What typically goes unsaid in all public discourse is that Palmeter, Roof and Gendry are not unique, but rather characteristic of the white terror is as old as the Republic, and as consistent as rainfall. Whites’ homicidal tensions worsen when an economic downturn combines with Black demands for justice to persuade muddleheaded thugs like Roof, Gendry and Palmeter that their white skin privilege is waning.
Previously, the worst outbreak of racial terror occurred following the end of World War I, when African Americans returned from Europe’s battlefields with attitude, and the quickening pace of industrialization led muddleheaded white people to fear that Negroes were taking over.
The irony of both Red Summer as it came to be known, and the racial resentments at the core of today’s anti-Black terror, is that African Americans, in the main, have neither a pot to piss in nor a bed to push it under. If capitalism is, by definition exploitive, then racial capitalism is effectively a pyramid scheme which assigns Blacks permanently to the bottom rung tier. We are, in effect, the canaries in the mine, and our economic misfortune signals that something similar is bearing down on white America.
Consider, for instance, that while the Great Depression officially began in 1929, unemployment rolls show that it began three years earlier for African American workers.
We can discern a similar pattern in today’s U.S. economy. While the mainstream news media routinely portrays the economy as robust, and the gap between the haves and the have nots as a glitch–rather than a feature– of capitalism, 47 million African Americans have lost more wealth than at any time since the failure of the Freedman’s Bank in 1874.
In fact, the legal scholar Mehrsa Baradaran estimates that African Americans–accounting for 13 percent of the U.S. population–own no more than 1 percent of all assets nationwide, or, about one half of one percent more than we did on January 1st, 1863, when Abraham Lincoln signed the Emancipation Proclamation.
It is in fact, the material bankruptcy of 48 million Blacks that facilitates these mass shootings; circumscribed by our poverty to poor, segregated neighborhoods, mass murderers like Palmeter, Roof and Gendron are assured of finding their target simply by going to a church, grocery or discount store on the Black side of town, and opening fire.
Whether the principal commodity is cotton, cars or credit, the white settler views Blacks as 48 million ATMs from which they are entitled to make regular withdrawals through the job market, workplace policies, health care, the criminal justice system, real estate and banking. Consider the fact that nearly half of all African Americans have bad credit, compared to roughly a quarter of whites. In fact, whites earning $25,000 annually are likely to have better credit than blacks earning between $65,000 and $75,000.
Nine of every ten black college students enrolled in four-year public universities rely on federally-subsidized student loans compared to six-in-ten whites, and African Americans who earned their bachelor’s degree from a four-year public university in 2012 owed an average of $3,500 more in school loans than white graduates that year. The default rates widen over time, as blacks who tend to bring home less pay than whites struggle to keep up with their payments.
Regulators have fined lenders such as Toyota, Fifth Third Bank and Ally for overcharging blacks and Latinos for car loans and African Americans, who, on average, pay between $300 and $500 more for an auto loan than do white borrowers, despite incomes that are, on average, slightly more than half of that of whites. One-in-three blacks between the ages of 18 and 64 have overdue medical bills compared to one-in-four whites in the same age cohort. African Americans are twice as likely to be in arrears on bills including water or utility bills and more likely to have their service disconnected or even lose their home as a result of a lien.
But it’s the subprime mortgage market that truly reveals America’s white supremacist heart. Wells Fargo bankers testified that they peddled “ghetto loans” targeting “mud people” which is consistent with an Economic Policy Institute analysis that found that 53 percent of all black borrowers were issued subprime loans, compared to 47 percent of Latinos and a quarter of white borrowers. In New York City, African-American home buyers in 2006 were four times more likely than whites to be saddled with a subprime mortgage and another study found that between 2004 and 2008, only 6.2 percent of white borrowers with a credit score of 660 or higher received a subprime loan while the rate for black borrowers with similar credit scores was 21.4 percent. In fact, lending disparities actually widened when households with higher incomes were compared, meaning that an African-American family earning $200,000 annually was more likely to be saddled with a subprime loan than a white family making less than $30,000.
What that means, New York University Sociology Professor Jacob Faber told me a few years ago, is that borrowers of color were targeted not because they were credit risks, but because they weren’t.
The result is an expanding apartheid state: while nearly three of every white households own their own home, only 2 in five Black households do. Hence, much like South African apartheid, Blacks rent from whites.
Here however is the rub: By dispossessing Blacks, whites have merely bit their nose—HARD—to spite their face. Reducing Black buying power– as evidenced by the African Americans relegated to shopping for the bare necessities at Dollar General and other discount stores across the nation—means that we have less to spend on the goods and services peddled by whites and other racial groups. Had Ronald Reagan or Bill Clinton read Hegel—and in Reagan’s case, had he read anything— perhaps they would realize that shipping the manufacturing sector might indeed lower wages, and undercut Black political power that was headquartered in unionized workplaces, but it also means fewer customers for businesses.
Many of you might recall the energy trader Enron, which imploded after its fraudulent accounting practices were uncovered by a skeptical Fortune magazine reporter, Bethany McClean, who amid the sound of popped champagne corks wrote a 2001 story that simply asked:
“How does Enron make its money?”
In this episode of Black Owned Conversations, we think this is the perfect time to ask:
How does racial capitalism make its money?