Volume 4, Number 9 February 23, 2001
Supply/Demand and Predatory Power
by Dr. Ridgely A. Muímin Muhammad
I recently asked Georgia Lieutenant Governor Mark Taylor if rural development and increasing benefits to large farmers be at cross currents to each other? He said, "Yes". It would be good if there could be a win win situation. However, through the influence of some of these large farmers over the county commissions of our rural counties their decisions are pulling the whole county down as profitability for the large farms are going down.
As the agricultural profit margins tighten ( Graph 1), the big farmers became the predators. With the help of the USDA, the large white farmers first ate up the land and equity of the Black farmers. Now they keep the whole county as a hostage to keep their costs down. Large farmers want lower taxes, lower land prices, lower wages because they can not get higher prices for their commodities. However, to keep their costs low they block new higher paying industries from locating in their counties.
I asked State Senator Hooks and State Representative Hanaah if county commissioners blocked programs and moneys from the state that were available to the counties. They both answered, "yes". There is a large supply of labor and an outside demand for that labor, but the power structure wonít let industries in.
While the poor are kept poor and vulnerable, in steps a new breed of predators. We attended a "Predatory Lending Conference" on February 13th and 14th spearheaded by State Senator Vincent Forte. It seems that the deregulation of the banking institutions back in the early 80ís has opened the door for a set of predators to come into the Black community and chew up the wealth and dignity of many of our elderly home owners.
They deregulated the banking industry and the people get "taken to the bank". The predatory loans are usually made based on the remaining equity in the an older person's home and are characterized by high interest rates, balloon payments, hidden fees, unnecessary insurance, over-collateralization and no regard for ability to pay. When will we learn that America is a wilderness filled with predators? The "Predatory Lending Bill", SB 70, is a first step of dulling the teeth of these lending predators.
There is a large demand for credit in the Black community, but those with power keep the cheap interest loans to themselves and force Black people to deal with the loan sharks. There is a plentiful supply of capital, but it is artificially kept out of the hands of Black people.
Deregulation and privatization is the rallying cry for politicians owned by big money. California deregulated electrical power generation and now the people will have to pay through the nose for electricity.
"The simple fact is that a handful of people who were reallysmart figured out how to make a ton of money selling the same product in essentially the same market conditions as before at 10 times the price." states Michael Kahn, chairman of the California Energy Oversight Board.
There was a predictable increased demand for electricity, but the supply was kept artificially low due to the politics of deregulation.
In my economic classes they talked about the "hidden hand" that drives supply and demand. That "hidden hand" is the politics of powerful "predators", bankers and lawyers. The bankers and lawyers have set up a system which forces the smaller predators, like big farmer county commissioner types, to chew on the weakest of us, while they themselves are being chewed. Too bad that they can not turn their heads from their slop trough and take a "bite out of crime".