Larry Schweikart: An Alternative Theory of the Riots

Guest Piece by Larry Schweikart

Some of you may know that I’m a historian of American banking and finance—that was my original research area and I probably wrote 4-5 books on the subject. What makes that all the more remarkable is that I never took a formal course in banking, finance, or even economics in my life. It was all “on the job training.”

So in a recent chat with a former co-author, Professor Charles Calormiris of Columbia University, on an article that came to be the most-cited piece I’ve ever written (“The Panic of 1857,” Journal of Economic History), our conversation naturally turned to banking. He began discussing research from his 2015 book “Fragile By Design” with Stephen Haber. He mentioned that something they found in that book now seemed all the clearer in light of recent riots.

In the 1990s through the early 2000s, there was a merger wave occurring among banks and financial firms. Many of you will remember your local, hometown banks began to disappear, replaced by J. P. Morgan Chase, Citibank, Wachovia, and Bank of America. It turns out that in the late 1990s, in order to gain congressional approval for these pending mergers, the banks needed to get certain legislators on their side. Legislators who were, shall we say, highly persuaded by minority communities. More to the point, the big banks needed leading black organizations and leaders to support their mergers.

Now, you ask, what possibly could be the benefit to minorities of having giants like Citibank or Chase take over more local banks? Under normal circumstances, nothing. But shakedown artists like Rev. Jesse Jackson and the Rev. Al Sharpton always know where to find a buck. In this case it was “community reinvestment.” Banks, they figured, could be “encouraged” to make massive loans in minority neighborhoods. Gee, someone might have to, er, “direct” such lending, wouldn’t they?

Absolutely. May I introduce NCRC, the National Community Reinvestment Coalition. Bank loans to the “minority community” were funneled through the NCRC—no doubt with the reverends taking a reasonable fee for their services—and in return, the black community wrote letters and gave testimony supporting the mergers. Just how much money are we talking about here? Two trillion dollars.

That money began to run out in 2015. The loans were usually either 10- or 15-year loan programs. “What’s the big deal? Just go back and shake them down again,” you say. Not so fast: the mergers are already complete. The banks don’t need the black community anymore. Just where were the bulk of these loans made? Oh, my friends, you know the answer to that. Calomiris and Haber found the usual suspects: Baltimore, St. Louis, Chicago—virtually anywhere there has been a riot recently.

It’s abundantly clear that one (perhaps only one, but perhaps the most important) of the factors that kept the streets quiet was the “walkin’ around money” spread by the banks seeking mergers. While the “Black Lives Matter” corporate coercion may produce relative dabs of cash, the leaders of these movements cannot hope to make up a $2 trillion shortfall. There may be much more to these riots than just “police brutality.” The gravy train has run out, and for now, even the ransom payments from corporate America won’t come close to replacing it.

Larry Schweikart is a historian, the co-author of A Patriot’s History of the United States with Michael Allen, author of Reagan: The American President, and is “America’s History Teacher” with a full US and World History curriculum for homeschoolers and other educators at www.wildworldofhistory.com.

 

That is all.

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

2 thoughts on “Larry Schweikart: An Alternative Theory of the Riots

  1. Gregg - June 21, 2020

    In politics, always follow the money. Does the corruption even end?

    Haven’t seen Jackson (in his late seventies – Biden’s age – and has Parkinson’s since 2017) much lately, and Sharpton looks wan and gaunt (really sickly) on a recent video of him getting on a private airplane. Years ago, he looked more like Sergeant Shultz, now he looks like a starving Holocaust survivor.

    I have not yet seen their heir apparent(s) to lead their (bowel) movement, but I’m sure (just like with Soros et al,) their is another “community” agitator waiting in the wings.

    IMO, all this qualifies for prosecution under RICO statues.

    This white and black collar corruption must be exposed, stopped, and prosecuted as America cannot survive with so much of this back door extortion and pay (with other people’s money) to play SOP going on.

    The president has to get with McConnell and Graham and tell them to get on board and get his people in place, with none of the senatorial “courtesy” blue slip preference schiff! If Trump has to run his executive branch with a revolving door acting directors and prosecutors to get around slimy Schumer and lightweight Gillibrand, so be it.

    We need a constitutional amendment to ‘clarify’ how the president can fire and hire his people. I know that could be a two edged sword, but when has the GOP in the senate ever “Borked” a Dem president’s nominee? None of BJ Clinton’s or ‘the One’s’ SC ‘judges’ were qualified to be a judge on a talent show, let alone a law judge on any court, especially the SC!

    If we are forced to get the radical Dem partisan political hacks like RBGs and SS-Ms of the judicial swamp with no pushback, then we must be able to get the mostly milquetoasts that GOP presidents nominate.

  2. brian - June 21, 2020

    Odd that these two ‘reverends’ seem to be living the high life in servitude to their ‘sheep’. One thing you can always count on with these two long time scammers is, if there is a ‘racial fire’, they’ll show up with gas cans. If there is money involved, they’ll have their hands buried in it for themselves. These two are the furthest from ‘reverend’ as you can get.

    Matt 7: 15 – 20 You will know them by their fruit

    Its a war… don’t be fooled.

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