Friday, January 29, 2016

Why #OscarsSoWhite and #OscarsBoycott are a waste of time...

An effort to boycott the Oscars has gained significant traction, even leading to "a history-making announcement by the Academy of Motion Picture Arts and Sciences about diversifying its membership.."
Simple economic analysis reveals why the Academy responded so quickly. It also reveals why the course of action chosen is likely to be less effective than many hope. Finally, it points to a more effective solution.
As noted in the charts above and below, both drawn from the 2014 Motion Picture Association of America Stat Book, Asians, African-Americans and Hispanics comprised 46% of movie ticket sales in 2014.
You don't need an MBA from the University of Chicago to know policies and practices that disrespect 46% of your customers, while several of your employees make statements that appear to channel Donald Trump's perspective on diversity, are bad for business. As I wrote in an MLK Day post, Dr. King stated quite clearly that "If you respect my dollar you must respect my person."
So it is here. 
Even more relevant is the fact that Asians, African-Americans and Hispanics comprise a large share (46%) of tickets sold to the top grossing movies in 2014.
Why #OscarsSoWhite and #OscarsBoycott Won't Work
A boycott of a specific, one day only event is likely to fail to generate significant change. Institutions tend to respond with tokenism, defined as "the practice of making only a perfunctory or symbolic effort to do a particular thing, especially by recruiting a small number of people from underrepresented groups in order to give the appearance of sexual or racial equality within a workforce." Tokenism implies that if one Black (or minority, or woman) benefits, all members of the target group do. (Clarence Thomas replaced Thurgood Marshall on the Supreme Court, but was Mr. Thomas really as qualified as Mr. Marshall? What does the record show?)  
In this case, the appointment of Black people in highly visible positions, as ceremony hosts or even as CEO is symptomatic of this approach. (Should these people step down?  Hell no. Why would you do that?) While the reality is these appointments do not  have the power to actually change the shape of discrimination, this does not mean they have no value. (It depends upon the person: Marshall vs Thomas....)
Given the facts outlined, a more effective approach may be for members of the affected groups to boycott all new films for, say, a week or a month.
Historically, these groups have been prevented from working together toward a single goal, so a coordinated effort is a long shot.
But economic analysis reveals it would be the most effective approach.

Tuesday, January 26, 2016

William Michael Cunningham invited to speak at the Wall Street Project Economic Summit

Jan. 26, 2016 --- William Michael Cunningham has been invited to serve as a speaker during the Rainbow PUSH Coalition & Citizenship Education Fund 19th Annual Wall Street Project Economic Summit, convening February 16-18, 2016 at the Sheraton New York Times Square Hotel, 811 Seventh Avenue at 53rd Street, New York, NY 10019.

The theme of the Summit will be “Wall Street: The New Paradigm – Access to Opportunity.” Up to 2,500 corporate executives, minority suppliers, and political, community, religious and world leaders are expected to attend.

Mr. Cunningham will speak at a panel titled “Access to Capital: Crowdfunding, Alternative Funding Sources and Business Development for MBW/WBES” on Thursday, February 18th (10:45a.m.-12:00p.m.). He will discuss new techniques to acquire funding to start or grow a business. As the organizers noted, "It seems like every day you hear about a new crowdfunding site or another firm looking to invest in new ventures. Some things sound easy, but, in most cases, they are far from it. This panel of experts will tell you what to consider, what to avoid, and what you’ll need in order to pursue funding opportunities."

Mr. Cunningham is also expected to discuss his resource guide, The Minority and Women-owned Company Small Business Financing Guide and Workbook, 2016 Edition.

The Guide and Workbook are designed to provide actionable information minorities and women can use to obtain small business financing. For more, see:

Tuesday, January 19, 2016

Martin Luther King's Philosophy on Investing

Capitalism and Equality 
As the civil rights movement expands to include investing and investments, I thought it would be an appropriate time to reflect on Martin Luther King, Jr.'s attitude toward investing. Though it may surprise some, Dr. King was one of capitalism's staunchest proponents. In this respect, his actions were fully consistent with his faith: as he noted in one of his speeches, "Jesus never made a universal indictment against all wealth." What's more, Dr. King's work made capital markets more efficient, as I discuss below.
 A Socially Responsible Investor
Martin Luther King was more concerned with how wealth was obtained and used. To him, the fact that one owned a Cadillac said nothing about one's faith or about one's character, for that matter. Worshiping the Cadillac, however, did. This certainly made him a socially responsible investor, specifically a values investor. His emphasis on values rested on a concern he expressed many times, that "material means have outdistanced spiritual ends, (does anyone really need a Gucci handbag?), that mentality has outdistanced morality (Goldman Sachs), and that civilization has outdistanced culture." ( Trump, some popular music, and most reality TV).
 Community Investing
Dr. King believed in both the power of community and in the power of the market. In fact, economic development projects started by Dr. King laid the foundation for future initiatives in socially responsible investing. Operation Breadbasket in Chicago combined ongoing dialog with boycotts and direct action targeting specific corporations. His efforts also strengthened and developed three African American banks, two in Chicago and one in Cleveland.
Finally, Dr. King helped people realize the economic power of their own spending. Or as he put it, "If you respect my dollar you must respect my person." As I noted in one of my earlier articles, I like Carver Bancorp (CNY). Carver is a small-cap bank operating in Harlem that is African-American owned. The bank has strong management, a solid balance sheet, and is well positioned to benefit from the continuing development of the Harlem real estate market.
Economic Impact
Martin Luther King's work also supported domestic economic growth. By my estimate, the elimination of Jim Crow laws and reduced employment discrimination boosted the U.S. economy by $20 trillion dollars over the 20 years after King's death. (This includes domestic spending and productive capacity between 1970 and 1990.) By contrast, in 2010 the US Treasury estimated that $19.2 trillion in wealth had been lost due to the impact of the financial crisis and corporate fraud.
This certainly puts the bursting of the housing bubble in perspective.
 1) "Why Jesus Called A Man A Fool", A Knock At Midnight: Inspiration from the Great Sermons of Rev. Martin Luther King. Warner Books, 1998, page 148.
 2) "Rediscovering Lost Values". Ibid. Page 11.
 3) "Paul's Letter To American Christians". Ibid. Page 27.
 4) "The Financial Crisis Response In Charts April 2012." US Treasury. Online at:
5) "The Birth of a New Nation", A Call to Conscience: The Landmark Speeches of Dr. Martin Luther King, Jr. Edited by Clayborne Carson and Kris Shepard. Warner Books, 2001, page 18.