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Regaining Prosperity... and Protecting It: Job Creation and Financial Literacy in Black America

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I am so pleased to see The Huffington Post inaugurating its Black Voices site, and I appreciate the opportunity to contribute in its first week.

As an African-American member of Congress at this critical moment in our nation's history, my first duty is to bring jobs back to the community I represent. To create jobs, we need smart and bold investments that put people back to work today and sustain opportunity in the future -- investments in infrastructure, energy, education, science and technology.

The Recovery Act stimulus package that was passed in early 2009 helped stabilize an economy in free fall and laid the foundations for sustained investment in these pillars of economic growth. But the current Congress, with a Republican-controlled House of Representatives, categorically refuses further investment in job creation and is singularly focused upon deficit reduction. Don't get me wrong: long-term deficit reduction is an admirable goal. We do have to rebalance our national checkbook in years to come, and President Obama has advanced substantive proposals to do just that.

But now is the time for aggressive investment in jobs and economic growth.

The Republican refusal to invest in jobs -- motivated in part, I believe, by their belief that a weak economy will harm President Obama's reelection prospects -- harms the black community in particular.

African Americans have been disproportionately impoverished and unemployed by the "Great Recession" that began in 2007. The statistics are staggering. In 2009, African Americans saw their median household worth fall by 53 percent -- yes, you read that correctly -- compared with a 16-percent reduction in median net worth for white households. This acute toll on the black community only exacerbated preexisting inequality. The median wealth of white U.S. households in 2009 was $113,149, compared with just $5,677 for blacks. That ratio is 20 to 1. In 1995, it was 7 to 1.

With our communities in such pain -- and an obstructionist Republican House of Representatives unwilling to do the right thing -- it is doubly important that we get out the vote in 2012, retake the U.S. House of Representatives, and reelect President Obama to the White House. If you think it is difficult today to enact policies that invest in the American people -- especially America's most vulnerable people -- imagine the consequences of further losses at the ballot box in 2012.

A further point: African Americans' staggering financial losses suffered during the recent recession reveal a fundamental economic weakness in our communities -- financial illiteracy. Effective and responsible wealth management insulates our families both against predatory lending practices and sudden loss of wealth during an economic crisis.

The African-American community has been pervasively victimized by predatory lenders who sell high-cost, high-interest financial products like subprime mortgages, rent-to-own schemes and tax-refund lending.

Without a doubt, a crackdown by law enforcement on exploitative lending practices is critical; the financial reform legislation passed by Congress in 2009 makes great strides toward justice. But a consumer base uninformed of the risks and unable to defend itself against predatory lending will always be easier to exploit. That makes dramatically improved financial literacy imperative, especially for the black community.

Financial literacy is equally critical if families are to protect themselves against risk during an economic downturn. Let me put it bluntly: had African Americans better understood personal and household financial management -- had we equipped ourselves to thrive under complex and unpredictable economic circumstances -- we would not have been so disproportionately harmed by this economic crisis. Of course, taking our responsibility does not absolve the financial lending institutions from theirs. But take responsibility we must.

As a community, we must manage our finances more effectively so that no single event can undo decades of economic progress. It will require a collective effort to get it done.

As a small step toward this worthy goal, I am proud to announce today my co-sponsorship of H.R. 300, the Young Adults Financial Literacy Act introduced by Indiana Congressman Andre Carson. This bill will establish a grant program at the Treasury Department to fund the establishment of centers to support development and implementation of financial literacy programs for young American adults and families.

It will continue to be a tough climb out of these difficult times. And there will be difficult times again ahead. Each of us must evaluate our financial circumstances and those of our families, friends and neighbors. We must arm ourselves with the knowledge and tools to manage our wealth effectively so that our communities can never be so deeply damaged again.