(Image: Official White House Photo)

Before leaving for a district workweek, congressional lawmakers handed President Obama a victory by passing legislation to extend the payroll tax cut and federal unemployment program without the typical knock-down-drag-out fight.

“Congress did the right thing and extended the payroll tax cut for working Americans through the rest of the year. That’s about $1,000 for the typical American family,” said Obama.  “And that’s part of what lifted the economy when it was on the verge of a Great Depression.”

But many did so with a great deal of reluctance. Some individuals may have their unemployment benefits cut by 30 weeks. In addition, newly hired federal workers will be required to pay a higher percentage of their salaries in contributions, which will help pay for the unemployment measure in the bill, and the “doc fix” to ensure doctors are fully compensated for serving Medicare patients.

“Our federal employees are not a piggy bank. We should not reach into their pockets every time we need to pay for something. In return for their hard work and dedication, the majority has rewarded federal workers with an unprecedented assault on their compensation and benefits,” said Rep. Elijah Cummings (D-Maryland), who along with 131 other House members voted against the bill. “Federal workers have already contributed $60 billion toward the reduction of our federal deficit. They are now being asked to pay for even more, while we refuse to ask millionaires and billionaires to contribute one additional penny.”

Congressional Black Caucus Chairman Emanuel Cleaver (D-Missouri) also voted nay, saying that he could not “in good conscience fully support” the bill, although he’s pleased that 160 million Americans will benefit from the payroll tax cut and millions more will continue to receive unemployment insurance while looking for work.

“Time and time again, the Republican Leadership has asked a single group of Americans to bear the burden of reducing the deficit. Federal employees have already sacrificed $60 billion through pay freezes, toward reducing our deficit,” Cleaver said.  “This is a clear assault on our public servants, the majority of whom work throughout our nation as police officers, mechanics, lawyers, environmentalists, nurses, mine inspectors and more.”

The bill adds $101 billion to the deficit, according to the Congressional Budget Office’s estimate, which means that Obama and lawmakers could find themselves in a battle over raising the nation’s debt ceiling just before the November elections.

President Barack Obama addresses the nation in State of the Union (Image: File)

Speaking before a jam-packed congressional chamber and millions glued to the tube, President Obama boldly declared in his State of the Union address Tuesday night to use his leadership toward producing an economy “built to last.” His “blueprint” calls for, among other initiatives, a high-tech reboot of the nation’s manufacturing sector, tax code changes to reward firms that “would bring jobs back to your country” and a series of policies promoting financial equity for middle class and poor Americans.

In the speech, Obama took aim at financial institutions engaged in abusive lending practices and corporations and wealthy individuals not paying their fair share of taxes, focusing on “fairness…the defining issue of our time is how to keep that promise alive… We can either settle for a country where a shrinking number of people do very well, while a growing number of Americans barely get by. Or, we can restore an economy where everyone gets a fair shot.”

In the Republican rebuttal delivered by Indiana Gov. Mitch Daniels he characterized the Obama Administration as “a divisive failure that has chosen class warfare and stifling big government over economic progress.” Even before the address, other GOP opponents—from House Speaker John Boehner to presidential contender Mitt Romney—jumped on this class warfare bandwagon.  The president counterd: “You can call this class warfare all you want. Most Americans would call that common sense.”

Watching from the press gallery, I was struck by the diffrence in Obama’s tenor from last year’s lofty “plan to win the future.” Though upbeat, his remarks melded forceful urgency, industrial innovation and economic populism. It also offered some clues on how he will frame his re-election campaign going forward, highlightinmg myriad economic achievements—rescuing the nation from another Great Depression, providing pay equity for women, resurrecting the auto industry (“Today, General Motors is back on top as the world’s No. 1 automaker…”), to name  just three—and touching on foreign policy accomplishments—taking out Osama bin Laden, ending the Iraq War—while making the argument that future prospects under a second term of Obama will prove far better than the GOP alternative.

The president prefers across-the-aisle collaboration to open warfare. But expect him to display more steel when it comes to dealing with the type of politcal antics that almost shut down the government last year and threatened to wreck the recovery. He asserted: “As long as I’m President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return the very same policies that brought on this economic crisis in the first place.”

So it’s clear he’ll continue to deploy his six-month-old “We can’t wait” strategy—a combination of using the presidential bully pulpit to pressure Congress to pass his legislative agenda as well as implementing select initiatives through executive action and enforcement powers.

In his remarks, he prodded  congressional Republicans to stop “a tax hike on 160 million working Americans while the recovery is still fragile… Let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.” Currently, the deal cut between Democrats and Republicans for a two-month extension of the payroll tax holiday in late December is set to expire shortly. And he also asked Congress to present him with tax reform legislation for companies that create domestic jobs as well as bills that bolster small business development and energy innovation. As for housing , “I’m sending this Congress a plan that gives every responsible homeowner a chance to save about $3,000 a year on their mortagage by refinancing at historically low interest rates.” And once again he proposed additional changes to the tax code—the so-called Buffett rule named after Warren Buffet, the second richest man in America—in which those earning more than $1 million a year would pay a minimum income tax rate of at least 30%. The GOP continues to reject the measure.

In terms of applying executive privilege, Obama said he will ask Attorney General Eric Holder Jr. to create a special division using federal prosecutors and state attorneys to investigate abusive lending. The president would also develop a beefed-up trade enforcement unit  to pursue unfair practices employed by foreign countries—most notably China. Moreover, he plans to sign an Executive Order next week “clearing away the red tape that slows down too many construction projects” but readily admitted Congress has to authorize funding  Obama did install his Consumer Finance Protection Bureau Chief through a recess appointment, however.

In talking with political observers today, one area that he failed to address with policy initiatives, however, is the alarming rate of poverty.

Despite the inevitable dogfights, Obama stated that Washington politicans will continue to get a black eye from the public if they don’t “learn from the service of our troops.” He opened and closed his address with references to the selflessness and honor displayed by our young men and women in uniform, and  specifically pointed to the Navy SEAL team that killed Bin laden by placing mission above individual differences.

Bridging that politial chasm, he stated, would result in a a nation that is truly built to last.

(Image: ThinkStock)

We have fallen to the back of the pack in our marathon run to build wealth.

While America dealt with the Great Recession of 2007-2009, overwhelming numbers of minority households suffered through a modern-day version of the Great Depression. The result: the obliteration of billions in wealth. We received confirmation earlier this week when Pew Research Center released a report that clearly spelled out the extent of the damage.

The wealth disparity between African Americans and our White counterparts is Grand Canyon-wide, the largest gap in a quarter century. In fact, the median wealth of White households is 20 times that of Black households and 18 times that of Latino households, according to the organization’s analysis of U.S. Census data. In dollar terms, African Americans’ net worth—assets like property, savings and investments minus liabilities such as mortgages, car loans and credit cards—was a mere $5, 677 compared with $113,149 for Whites. The net worth for Latinos was only $6,325.

The report corroborated that the collapse of the housing market in 2006 and recession that followed from late 2007 to mid-2009 took a far greater toll on minorities than Whites. As a result, the inflation-adjusted median wealth of Black households dropped a staggering 53% from 2005 to 2009 versus just 16% for White households during the same period. Latinos were hardest hit as the group’s median wealth plummeted by 66%.

The major culprit was the steep decline in the median value of home equity. For Black homeowners, it plunged from $76,910 in 2005 to $59,000 in 2009, while the level dropped for White homeowners from $115,364 to $95,000. During the same period, Latino property owners’ home equity was sawed in half, from $99,983 to $49,145.  To make matters worse, the Pew report revealed that 35% of Black and 31% of Latino households, respectively, had zero or negative net worth in 2009 compared with 15% of White households.

No doubt, these figures are alarming, especially when  you factor in a Black unemployment rate of 16.2%, double the rate for Whites. Behind the numbers, you’ll find poignant stories of economic woe as families face foreclosure of homes and deferment of dreams of a bountiful financial future.

The Pew report offered further evidence that we must address the economic state of Black America. As Congress dithers over the debt crisis, resistant to overtures from President Obama to get serious about a deficit-reduction compromise, our salvation ultimately rests in a maxim made popular by director Spike Lee: “Do for self.”

We must take steps, large and small, to creatively piece together our own action plan to place African Americans on the path to sustained financial recovery. As you would expect, our key planks are job creation, entrepreneurship and financial education.

Continue reading on next page

To solve the Black employment crisis—you can’t rebuild wealth without a basic source of income—African American organizations have already begun the process. Last month, BLACK ENTERPRISE, in partnership with the world’s largest corporation, Walmart, held our 20/20 Vision Jobs Forum, and brought together brilliant minds in business, government and the non-profit sector to create short- and long-term initiatives. The National Urban League has made employment strategies the centerpiece of its annual conference in Boston this week while the Congressional Black Caucus prepares to launch a multi-city “For The People” Jobs Initiative to put at least 10,000 African Americans back to work. Collectively, such efforts—and many more will be needed—can have a powerful impact. So what can you do? On a personal level, I urge every employed Black man and woman to make a commitment to find a job or income-producing opportunity for someone currently out of work.

In terms of business development, we should take a chapter from past African American business leaders and organizations that were forced to pool resources to create institutions and incubators for entrepreneurship. I recently reported on a program in which my good friend and syndicated radio talk show host Warren Ballentine teamed with National Bankers Association, a consortium of minority banks, to encourage African Americans to make deposits in Black financial institutions which, in turn, will provide financing for small businesses. That’s a great start but we can kick it up a notch. That model can be replicated across an array of sectors, ranging from professional services and manufacturing to private equity and digital technology. The starting point: Enlist minority-focused NGOs (non-government organizations) and trade associations as well as partner with the BE 100s—the nation’s largest Black-owned businesses—and major corporations that do business with us or rely on minority consumer dollars to meet top-line and bottom-line results.

We must continue to educate our community—especially young people—about the most effective ways to manage finances, from buying homes to building investment portfolios. In fact, BLACK ENTERPRISE has helped hundreds by providing such direction through our Wealth for Life program and monthly Financial Fitness Contest in which we have selected households with access to free personal finance consultation and $2,000 to help them get back on track. African American financial planners, investment advisers, money managers and the like can play a huge role in the expansion of financial literacy working with schools, churches and community organizations to teach people the rudiments of budget and tax management, investment planning and home ownership as well as the process of developing multiple streams of income.  Companies like Ariel Investments (No. 6 on the BE ASSET MANAGERS list with $5.5 billion in assets under management) and Carver Federal Savings Bank (No. 1 on the BE BANKS list with $744 million in assets) have done exceptional jobs in structuring such programs.

Those strategies represent but a few suggested power moves. The reality, however, is that it will take years for many families to recover and rebuild. To provide a foundation of wealth building for the next generation is another long-term proposition. But when we launched Wealth for Life more than a decade ago we maintained building lasting, multigenerational wealth  would not be a sprint. It requires the focus, discipline and tenacity of a marathon runner who realizes achieving that goal is a lifetime pursuit.

So keeping that philosophy in mind, let’s lace up our track shoes today.

How did I, as a young black entrepreneur, manage to get my business off the ground during a recession? How did Black Enterprise survive an even more devastating economic downturn before we even made it to our fifth anniversary? And how did we make it through five more recessions, including the one we as a nation are fighting to recover from now?

It boils down to this: faith. We never give up. We never stop believing that we will not only survive adversity, but we will conquer it, becoming wiser, stronger and better in the process. We refuse to surrender our hope.

As we close out our yearlong celebration of the 40th anniversary of Black Enterprise, I never forget that the history of our company—and that of African Americans in general—has been no crystal stair, to paraphrase the great poet Langston Hughes. We’ve made it this far not because we’ve traveled an easy road, but because we are a tough, resilient, determined people who’ve already overcome more than our share of daunting obstacles and demoralizing setbacks over the centuries, only to stand triumphant and full of hope in the end. Many of my proudest moments as the founder of Black Enterprise have come during the most difficult times. It’s our track record of surviving adversity in the past that we must focus on to maintain the confidence and determination to thrive in the future, no matter what challenges lay ahead.

I exhort you to do no less. Many of us are discouraged and frustrated because economic relief has been too slow in coming for too many people. The distress is real and legitimate; Americans of all races and economic backgrounds are under tremendous pressure as a result of an economy that continues to struggle. However, this is when we must remember that we’ve come through much worse, as individuals, as families, as a people, and as a nation. And from that we can draw new strength, renewed confidence, and faith—not just hoping we can succeed, but knowing that we will.

As we close out this year to make way for 2011, I challenge you to hold on to your dream of a better life and stay committed to striving to realize it. Keep the faith. Never give up. Do not surrender your hope. We at Black Enterprise believe in you. And through both tough and good times, we’re with you every step of the way.

On behalf of Black Enterprise and the Graves family, I wish you and yours a blessed Christmas and a New Year of realized hopes, fresh possibilities, and new prosperity.

Conrad is a member of the B.E. Board of Economists and is interim dean at Scripps College, an elite women’s institution in Claremont, California.  She says that beneath their surface of providing friends with music and home-made fried chicken, these fundraising gatherings embody two important principles.

Pooling Resources

The first idea is that cooperative enterprises reduce risk.  When people pool resources, risks are smaller for the group than they are for any individual person.  One pool member might lose his job, but it’s unlikely every member would lose theirs at the same time.  Conrad says the historical pattern of mutual aid in the black community goes all the way back to the late-1800s burial societies that evolved into black life insurance companies.

A second pattern represented by rent parties is the value of lower-cost, family-based entertainment.  Parents can show their children ways to entertain themselves that don’t involve large expenditures of money.  Families can read public library books for free.  Such a habit advances the economic and financial education of young people, helping them understand the family’s budget situation and constraints.

Other activities besides organizing a rent party can put cooperative ventures to work today, says Conrad.  Two families could pool resources to purchase and share a house now selling at a bargain price in a safer neighborhood with better schools.  Black churches or civic organizations could take advantage of city programs for purchase foreclosed houses to be converted from residences to community use.

Lending circles are an acknowledged strength in Asian American and Caribbean communities, but were an African American community tradition that disappeared, says Conrad.  She thinks blacks’ urbanization as they migrated from the South to the North undermined some of the historical roots of cooperative ventures.

“African Americans have utilized cooperative ownership in good and bad times throughout U.S. history,” says Dr. Jessica Gordon Nembhard.  Throughout the 1930s and 1940s there were Black farmers’ cooperatives, credit unions, co-op grocery stores and schools, points out Nembhard, an associate professor at John Jay College of the City University of New York (CUNY) and a member of the B.E. Board of Economists.

In 1930, George Schuyler, a controversial journalist for the Pittsburgh Courier black newspaper, founded the Young Negro Cooperative League.  Ella J. Baker, who later became a luminary of the Civil Rights Movement, led the organization’s two dozen young people.  By 1932, the League had formed councils in cities from Philadelphia and Washington, D.C., to Cleveland, New Orleans and Phoenix.  They promoted cooperative businesses in black communities.

Some cooperative ventures made real money.  “In the fall of 1932 Gary, Indiana, was ravaged by the depression, the steel mills were closed and only one bank remained. Black citizens came together and formed the Consumers Cooperative Trading Company,” Nembhard writes.  “Starting with a buying club, the Trading Company came to operate a main grocery store, a branch store, a filling station and a credit union. By 1934 there were over 400 members and seven full-time employees in the grocery store. The Credit Union was organized in November 1934. In 1936, sales for the co-op store were at $160,000, and dividends were paid to share owners.”

A Foundation of Hope

But that was 70-plus years ago.  Dr. H. Viscount Nelson, a professor in the Afro-American Studies Department of UCLA, believes that several strengths that helped blacks survive during the Great Depression no longer exist or have become weaker. In the 1930s, he asserts, the masses of the black population — not just a middle-class or well-off black minority — functioned on hope.  Many young blacks today have given up hope, Nelson says.  The idea that education is the key to upward mobility was more widely embraced by black youths then than it is now.  There was also a greater respect for work, with blacks admiring people able to hold down any job.  Many young blacks today reject the concept of starting at a low level and working one’s way up, he says.

Author of the book, “Black Leadership’s Response to the Great Depression in Philadelphia,” Nelson  used 1930-1931 data to study Philadelphia’s black 30th Ward.  “What I discovered was that despite the economic reversals that people had suffered, life was relatively placid and calm,” says Nelson.  Crime was minimal, with no rapes, no murders and very few robberies or assaults and batteries.  Most 30th Ward arrests during these Prohibition years involved alcohol. Nelson found all socioeconomic levels of blacks living within the same neighborhood — doctors, schoolteachers and businessmen residing on blocks also home to laborers and house cleaners.   Depression-era segregation and discrimination made life hard, but forced blacks to live together, pull together and have racial consciousness.  Demographic diversity within the black community kept hope high.  This general optimism has been lost, Nelson believes.

While Conrad disagrees with Nelson that widespread hope remains lost, she does admit that upward-mobile blacks’ departure from inner-city neighborhoods has reduced opportunities for young people to interact with social and employment networks.  Conrad remembers how her father, a Dallas physician, helped steer the six children of the janitor next door toward all going to college.  Today, churches can perform some of those networking functions, she believes.  But middle-class suburbanites commuting to old-neighborhood churches must consciously make an effort to make this happen, says Conrad.  “They need to be there other than on Sunday.”

Sowing the Seeds

The image of First Lady Michelle Obama planting a vegetable patch on the White House lawn is perhaps a signal to Americans that taking down-to-earth self-help action is something everybody must do to make it through our current economic crisis.

Cultivation of that garden may bring to mind one of the most basic forms of commerce — bartering, where one farmer trades his beans for another farmer’s corn.  Bartering, however, can be more than the exchange of one product for another.  It includes exchanges of services, caregiving and skills.  “If there is a particular kind of repair or construction skill you have, you can use that as a form of bartering within a community,” says Conrad. “It goes back to a kind of cooperative venture notion, but here you exchange services with each other directly.”

Further Reading
Voices of Economic Survival

Continue reading for first-hand accounts from those who saw the country come back from the brink of economic ruin before, as well as those who are witnessing the extreme economic uncertainty for the first time.

Nobie Thomas, 93, Rome, Georgia

I remember living through the Great Depression. It was terrible, but we made it. I was in my teens. I was living in Rome, Georgia. It was considered part of the Atlanta metro area.

There was no work. And even if you did find work, it didn’t pay much of anything. Everything was dirt cheap but that didn’t help anyone because you still had to get the money to get anything. And nobody had money. A lot of people were coming here to Georgia because the standard of living was so that you could make it on less. But there was no relief.

No one had money to buy food. We did a little better than some other people because my father was a farmer, so we had food. He planted corn. We had chickens, so we always had plenty of eggs. We had a cow so we had plenty of milk and butter. If we had anything extra we helped other people.

Things started to get better in the late ’30s. At that time, men could find jobs again. Women didn’t work back then — they stayed home — so it was mostly the men who were out of work.

We had money in the bank. Any time we had anything extra, we’d put it in the bank. But we could only take it out on certain days of the month. So even if we had money, we couldn’t get to it. Banks were failing.

I think things are going to get worse than they were in the Great Depression because [costs are] so high. I think people need to prepare. I think people should save. They should have already been saving money.

The Great Depression changed me. Even after things got better, I would remember that time, and I would never waste. If I spend a dollar, I want a dollar saved.

Charlotte Ricks, 99, Landover, Maryland

During the Great Depression, I was in my 20s.

I lived in North Carolina. We didn’t have a lot of things like we have now. We had to walk many miles a day to school and back. A lot of people were out of work. We didn’t have homes. We didn’t have food. That was the [Herbert] Hoover administration. Then [Franklin D.] Roosevelt came in and he kind of brought the nation back to health again. Jobs were created. He brought welfare and people got food stamps.

Then young men went into CC camps (Civilian Conservation Corps) [set up in 1933 by Franklin Delano Roosevelt for unemployed men who could receive military-style training and education while getting food, clothing, shelter, and health services.]

We lived in the country, and my father was the type of person who grew everything. We had our own cow [which] gave us milk and butter. We had fruit trees. My mother made jelly and preserves. She made our own bread. So since we were on a farm where we grew everything to eat, we had food. That made a difference. The people who lived in town — when they got laid off, they had nothing. We were never hungry. But we didn’t have any money.

People helped each other. If they had enough to share with somebody, they’d share.

We had one pair of shoes. My sister learned how to sew, and then we had a little more to wear. We didn’t have raincoats and rain hats and umbrellas and things like that.  Men had one suit. And you wore that whenever you’d need to wear a suit.

Today, we’re right back in the hole again, but I’ve already come through this and know what it’s all about. When I try to talk to people about it, people don’t believe it. They tell me, ‘I couldn’t live like that.’ But if that’s all you had, you’d have no choice.

Pauline Giles, 89, Cambridge, Maryland

I grew up in Cambridge, Maryland. During that time, I was around nine or ten. As children, as long as we were eating and playing, and had a little candy, we were satisfied, unlike how many people are today. We weren’t thinking about having things to wear and places to go.

Even if our parents were worried, they could do things to keep us happy. I remember they would take cocoa and make candy and fudge. They took sugar and melted it with butter and put peanuts in it and it was peanut brittle. Even though things were hard, people lived more simply than they do today, so we made do.

I don’t think this recession is as bad as the Great Depression, but I think people were happier back in those times. People back then could do more with less. They hadn’t experienced having anything like today – we’ve experienced having some of the good things. And so we’re more likely to miss them. We didn’t have as far to fall back then.

During that time, people learned to make do with what they had. My parents always tried to get a little bit ahead. We didn’t have money to buy clothes, but my mother would sew and she would try to make our clothes like the things that were in the store. She would look at the magazines, and they had catalogs, and she would sit down and take some newspaper and cut little patterns. That was a big savings because we weren’t able to go out and buy those things.  If my parents were worried, they handled it well.

Today, if it gets worse, so many people are not going to know what to do. It’s at the point now where people are not really able to save. I guess there are little things we could do without, but it’s going to be hard for many people to do without the things they’re used to.

Rosa Lee Johnston, 83, Richmond, Va.

I remember [Herbert] Hoover was president. I think it was in 1929 going into 1930. At that particular time, I lived in Southampton County, Virginia, with my aunt. My mother lived in Richmond.

We didn’t have too hard of a time with food because we didn’t get the best of foods then anyway. We got cheese and stuff like that for ten cents a pound. They had salt pork — we got that for six cents a pound. My mother came and got me and brought me to Richmond and the Depression was still going on.

I was 6 or 7 when I lived in Southampton County, but when I got to Richmond, I was 10 or 11.

One of the main things I remember is different things being rationed. I remember shoes were rationed. Each family could get only a certain number of pairs of shoes, and that was it. But it didn’t matter whether shoes were rationed as far as we were concerned because we could only afford one pair anyway and we wore that pair until we couldn’t use them anymore. Sugar was rationed.  We saved money on clothes because all of our clothes were hand-made.

Because we remembered how hard things were during the Depression, we always believed in saving. My mother would save money at home. When I started school, I started saving money in the bank. At first we would start saving for Christmas – we’d save so much each week and then Christmas time we would have $50. If we didn’t have to use that $50 we wouldn’t spend it. We’d put it in a savings account. I worked in factories and I’d spend some of my money and put some in a savings account. Saving is something people should be doing more of today.

Raymond C. Jenkins, 53, Columbia, Maryland

If I were to compare the Great Depression – from what I’ve heard about it – with where we are today, I think the word ‘depression’ could be used to describe what’s going on. We already use this strong word – recession – and it’s getting worse. But President Barack Obama is in this to win this. So there’s hope. And with hope, you can move on to belief and you can move on to achievement. I tend to believe that this is a correction that needs to happen in the world. It is a world, global crisis. But I am very hopeful even though we are in this.

I have a good job. I work in sales. Like everyone else, I’m watching my 401(k) tank. I’m on pins and needles. I don’t know whether [I should] go in there and make changes and stop my losses and put all of my savings in bonds.

When it comes to spending, we’ve never been a family that goes out to dinner every weekend. But my wife and I are being even more conservative with our spending now. If you just watch CNN — watch the news — you’re going to spend less because the news is all bad.

I’m hopeful, but the economic situation causes me a lot of concern for my children. My oldest daughter is 24 [and moved back home 18 months ago]. I read somewhere that this is the first generation that is not living better than the generation before them. And she is an example of that. She’s starting off with a teacher’s salary. But can she afford to live in the Washington metropolitan area? Not really. Her car’s a 1994 Honda. If she had a car note and an apartment, plus had to pay for laundry and eating, how could she do it? I am very concerned for what will be there for them.

Mark Anthony Benson, 39, Los Angeles California

I’ve been out of work since October. I’m a filmmaker, but I was employed in the food industry in the corporate office, in charge of wholesale.

My rent is not as bad as a lot of other people’s. My car note is not as bad as a lot of other people’s. Unemployment has been able to cover that. It’s just the extras I’m used to having. Each year, I go home to Philadelphia in March. This year, I didn’t want to put that on my credit card. So it has affected my spring and summer plans so far. I’m used to seeing my family by now.

I’m a little more cautious now when I spend. Before, if I was going out to dinner, there wouldn’t be a second thought. Now I’m thinking,  ‘I’m not going to go to this restaurant now. Maybe I’ll go to the one that’s a little less expensive.’ I’m going to Costco and more wholesale places to get stuff that’s going to last me a lot longer.

You would always hear that this could happen, but I didn’t believe it with so many people investing and all my friends who were in the real estate industry making money hand over fist. They would go on vacation for a month, and now those same people are like, ‘I wish I had that money back.’ I always knew there would be recessions, but I didn’t know they would affect this many people.

In California, the unemployment rate is [high]. I feel like this is a wake-up call for a lot of people on how they live their lives. I’ve never been a big saver, but when I get back on my feet, I’m going to make sure that I have that six months of expenses that people talk about having saved.

Now, the inevitable winter of the economic cycle has arrived, and we’re all paying the price for not putting aside resources for tough times. I find it encouraging to remember an American generation that didn’t just talk about fiscal responsibility, but lived it: the survivors of the oft referenced Great Depression of 1929. They learned the hard way to save diligently, borrow sparingly and appreciate everything, taking nothing for granted.

I remain hopeful that we will not experience a depression on the scale of the one from 80 years ago. However, the silver lining in the cloud swamping our economy could be a resetting of our values, turning us away from our addiction to credit, disdain for saving and immature obsession with satisfying our every whim now, even if we can’t afford it. There is a conversation that many parents, including me, have been forced to have with our children this Christmas: The presents under the tree will be neither as large, nor as plentiful this year. But it’s not about the stuff we can buy; it’s about valuing life and the people in it. I’m hoping that this reality check will be the gift that keeps on giving long after the economy recovers.

Alfred Edmond Jr. is the editor-in-chief of BlackEnterprise.com