Another insight that I gained into credit markets during the conference is how oppressive small credit markets can be. We all romanticize the days when you could get a loan from your local banker on a handshake and a smile. We forget how that system could lock in local oligarchies, because would-be entrepreneurs couldn't get financing. This could enforce deep repression: consider the fate of a restaurant owner under Jim Crow who had let blacks eat at his lunch counter. I doubt he'd get another loan from the bank any time soon.
That gave me a related thought, which is that staunch federalists (and I'm a fairly staunch one) need to take into account the ways in which all of the theoretically private transactions under Jim Crow were used to enforce a radically unjust regime. I don't know where I stand on this; I'm just mulling it a bit.
This is why some of us aren't libertarians, cause - hey look! - people do a lot of bad shit if there aren't any laws against it. SHOCKOLA!
What's to mull over?
Megan, whether privately enforced Jim Crow could have survived, or been as pernicious, absent state-enforced Jim Crow, is a topic that has been inadequately studied. A topic for a long Atlantic piece, perhaps?
You do realize, don't you, that denying a loan in this case is a form of moral sanction. The bank clerk in your story, the one that withholds a loan, is a moralist.
WASHINGTON (NNPA) - When Rev. Joseph Roberts, pastor of the Ebenezer Baptist Church in Atlanta, needed money for a bigger sanctuary for Dr. Martin Luther King Jr's former pulpit, he couldn't find a bank willing and able to fund the project.
The new, 2,000-seat Horizon Sanctuary sits across the street from the old Heritage Sanctuary in Atlanta thanks to the combined efforts of five Black-owned banks.
"We knew that our bank, Citizens Trust Bank, which was Black - where we did all of our banking - just did not have the capacity to do a $6.5 million loan," Roberts recalls. "And so we had to go to the majority (White-owned) banks and we tried them. They said we did not have enough to collateralize a $6.5 million loan. They said, 'You could sell all your members and they still wouldn't provide enough equity to cover that,'" he chuckles.
His 1,800-member congregation simply could not finance the entire project out of pocket. And the U. S. Department of Interior was pressing to make the old Ebenezer a tourist attraction and having the church move across the street to a new sanctuary.
James E. Young, president and chief executive officer of Citizens Trust, came up with a solution. He volunteered to take the lead in talking to four other Black-owned banks around the country to see if they could all pool their resources to fund the construction. He called on his counterparts at City National Bank of New Jersey, in Newark; Citizens Bank in Nashville; First Tuskegee Bank in Alabama; Seaway National Bank in Chicago. They agreed to join forces on the project.
"That's how the pieces were put together," recalls Roberts. "And we haven't missed a note."
The new 2,000-seat Horizon Sanctuary now stands across the street from the old 700-seat Heritage Sanctuary, now leased to the Department of Interior. The $8 million edifice, built with $1.5 from its members as well, is not only a monument to God, but a symbol of what Black-owned banks can do within the communities that use them.
"We would never have gotten the new church up if it had not been for the initiative taken by the Black banks and for their willingness to do some risk capitalization," Roberts says.
Many of the nation's Black banks survived the Great Depression of the early 1930s, Jim Crow and integration brought on by the Civil Rights Movement. And they are still trying to survive. They are fighting negative perceptions in some quarters and a reluctance of some African Americans and organizations to use Black-owned institutions.
"Sometimes I lay awake at night and I hear this swooshing sound," says Young, president of the 83-year-old Citizens Trust, the largest Black-owned bank in the Southeast with $374 million in assets. "Billions and billions of dollars are leaving our community to be put under management by someone who does not look like us, does not empathize with us and at most will have only one of us on the board."
There are a total of 38 Black-owned banks in America. Because of limited deposits, none of them has a lending capacity of more than $3.5 billion.
"In every urban center in this country, we could have a billion dollar-plus financial institution if only a few of those organizations in those cities supported Black-owned banks with a deposit and with their borrowing," says Gregory St. Etienne, executive vice president of Liberty Bank & Trust Company in New Orleans and chairman of the National Bankers Association, an organization that includes 33 Black-owned banks.
http://www.sacobserver.com/business/030804/black_banks_unite.shtml
this would be a much more interesting conversaqtion if there was, actually, any money in circulation..
So Megan, are you going to address Glenn Greenwald's final post to you, or are you going to try to ignore it away? You were deeply offended by GG's criticisms, yet it turns out you were not always categorically opposed to torture, not at all.
Here's the link for any who need it.
You were in such a rush to respond before, it's almost as if you don't want to face it.
I'm not gonna drop this, btw.
The obvious problem, Nutella, is striking a balance between what some bureaucrat in Washington thinks is best or allowing the bigots at the bank have their way. I don't think the answer is anarchy. I think the answer is strong, but as limited government as possible.
What we have now, I believe, is a baseline assumption that absent an battalion of civil rights lawyers and bureaucrats from Washington, Joe Bob Bigot banker from Toe Suck, Pennsylvania, immediately will proceed to discriminate in their loan practices against anyone whose skin is darker than a paper grocery bag or talks like they "ain't from 'round these parts."
And maybe that's so.
But there's a little device you're sitting at right now that I have faith may, in time, serve to be an equalizer to any of those bankers with racism in their hearts -- and may render those battalions of civil rights lawyers and bureaucrats obsolete. Applying for loans over the internet can be done anywhere, small town, big city. And nobody can see your skin color, unless you want to show it to them.
I loves me the information age. It's a libertarian dream.
Glenn Greenwald and I just did a bloggingheads together; I've been waiting for it to go up before I said more on the subject.
Damn. Fair enuff, I'll hold my tongue.
Joe Bob Bigot banker from Toe Suck, Pennsylvania, immediately will proceed to discriminate in their loan practices against anyone whose skin is darker than a paper grocery bag or talks like they "ain't from 'round these parts."
Maybe he's just bitter because his wife lost her job or something.
Michael:
There's also the fact that the internet removes the problem of local monopoly or oligopoly in credit markets. Instead of being forced to get a loan from one of the racist-run banks on Main Street, there are thousands of other banks you can look at online.
But I agree with Will that the question of whether Jim Crow would have survived as privately enforced discrimination is a deeply interesting one. The role that private actions played in furthering the harm of Jim Crow more generally is also one that federalists and, for that matter, libertarians ought to deal with more directly. To be sure, the Ron Paul defense of "just blame it on the state governments" can't explain it all away.
The obvious problem, Nutella, is striking a balance between what some bureaucrat in Washington thinks is best or allowing the bigots at the bank have their way.
Right, but libertarianism is the opposite of a balance. It states outright that governments should essentially go away.
I'm not a communist, you can't refute my arguments by saying "look, if the governments did everything it'd be awful." That's called the slippery slope and it is a logical fallacy.
IMHO, a private-only Jim Crow would still have been pretty pervasive. Certainly, whites-only schools and neighborhoods would be prevalent. As I've mentioned before in these and other pages, a house in an all-black neighborhood is worth about 2/3 of what the same land and house are worth in an all-white one, so there's a huge economic incentive to discriminate.
I don't know where I stand on this; I'm just mulling it a bit.
I almost always resolve these sorts of dilemmas one of two ways:
1. Ask myself, WWAHSSWJRASD (What Would A High School Sophomore Who Just Read Atlas Shrugged Do?).
or
2. Hem and haw, pretend to see both sides of the issue, ignoring any libertarian angle (despite caling myself one) in the process, then going with the media's prevailing talking points. This worked wonderfully for me with respect to the Iraq Invasion, torture, and supporting George W. Bush (The Devil you know!) in 2004.
Right, but libertarianism is the opposite of a balance. It states outright that governments should essentially go away.
That would be the anarchists and minarchists, which comprise a sizeable but not exclusive faction of the libertarian spectrum.
Not that I particularly agree with the other libertarians on their spectrum of views, but you can't write all of them off as unbalanced anymore than conservative can get rid of a principled socialist by simply calling them a communist and refusing to actually address their arguments.
Have you read "The Poker Face of Wall Street" on how poker circles acted as alternative trust networks to local banks for entrepreneurial risk-takers?
The probkem, Nutella, is that the people who will do bad stuff if there aren't laws against it will pass laws requiring everyone to do bad stuff, if they can get away with it. We shouldn't assume that if the government is given authority to make laws on every aspect of life, it will use its power only to do good.
Jim Crow depended largely on bad state and local laws. A purely private Jim Crow system could have existed, and of course a great deal of discrimination was purely private. There is nonetheless merit in the argument that libertarian institutions make people less likely to discriminate without justification: If I choose not to make profitable deals with people of the wrong skin color, it hurts me in the wallet; but I don't pay the price if I vote to have the government exclude the people I don't like from doing business, licensed professions, sitting in the front of buses, etc.
Uhm, wasn't there a rather huge shitstorm between Althouse and Reason maybe 6 months ago over this very issue?
Also, Megan, honestly, I love you, but... is this seriously the first time you've considered this issue? Don't you think that, you know, the spectacle of federalism in the service of racism has had a pretty significant impact on how Americans view federalist principles in general? Wasn't this issue a key part of the civil rights movement? I mean, how could it have escaped your notice until now?
And in a slight departure from my previous comment...
There is nonetheless merit in the argument that libertarian institutions make people less likely to discriminate without justification: If I choose not to make profitable deals with people of the wrong skin color, it hurts me in the wallet; but I don't pay the price if I vote to have the government exclude the people I don't like from doing business, licensed professions, sitting in the front of buses, etc.
I think Megan's point was that circumstances are often such that it isn't profitable to do business with those who are discriminated against, because whatever gains you may see would be outweighed by the economic repercussions of pissing off powerful racists. Simply, you have greater incentives to discriminate than to not in those cases.
Of course, if you're starting from a level playing field, where there is no incentive to discriminate save for satisfying your own bias, then the libertarian position makes more sense.
"If I choose not to make profitable deals with people of the wrong skin color, it hurts me in the wallet; but I don't pay the price if I vote to have the government exclude the people I don't like from doing business, licensed professions, sitting in the front of buses, etc."
Posted by Nicholas D. Rosen
NDR,
if the first part, of the snip, above, is True, the second part: "but I don't pay the price if I vote to have the government exclude the people I don't like from doing business, licensed professions, sitting in the front of buses, etc.", is False..
you seem to think that Government regulation, of any type, bears no costs on the Economy..