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Public Banking: Equity in Action, By the People & For ALL People

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Public Banking: Equity in Action, By the People & For ALL People

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A: A public bank is a bank operated in the public interest, owned by the people through their representative governments. Public banks can exist at all levels, from local to state to national or even international. Any governmental body which can meet local banking requirements may, theoretically, create such a financial institution. Public banks can fund public projects at reduced cost, generate profits for the local government, and create low-cost credit for the local community.

A public bank is a chartered bank, owned by a government unit-a state, county, city, territory, tribe, or nation, serving as a depository for public funds, and mandated to serve a public mission reflecting the values and needs of the public it represents. In existing and proposed US public bank models, skilled bankers, not politicians, make bank decisions and provide accountability and transparency for how public funds are used.

Privately-owned banks, by contrast, are mandated to put short-term profits for their shareholders as their highest priority.
Q: WHAT PRECEDENT IS THERE FOR PUBLIC BANKING IN THE US?
A: Public banking was an ideal of the Founding Fathers, first tested in the colony of Pennsylvania. It had several precedents, successful and unsuccessful, in the 19 th century.

At the state level, the Bank of North Dakota has existed for a century and provides an excellent example of the power of public banking.

Since 2010, nearly half of U.S. states have introduced legislation to create public banks. This surge in legislation shows an attempt to regain control over regional economies after Wall Street destroyed much of the U.S. economy and was bailed out at the public's expense.
Q: WHAT IS THE DIFFERENCE BETWEEN A PUBLIC BANK AND OTHER BANKS?
A: Public banking is distinguished from private banking in that its mandate begins with the public's interest. Privately-owned banks, by contrast, have shareholders who generally seek short-term profits as their highest priority. Public banks are able to reduce taxes within their jurisdictions, because their profits are returned to the general fund of the public entity. The costs of public projects undertaken by governmental bodies are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.
Q: AREN'T PUBLIC BANKS A FORM OF SOCIALISM?
A: The Constitution of the United States specifies a number of services that the government is required to provide; for example, a military, a postal service, etc. These services are not based on economic philosophy (capitalism, socialism, etc.); rather, they are sovereign requirements. The Constitution vests Congress with the power "To coin Money, regulate the Value thereof..." This, too, is a sovereign requirement, and should not be characterized as an economic philosophy. It's also worth noting that the states are forbidden to issue "bills of credit" (currency), which implies only Congress may do that.

In the 18th Century, when the Constitution was written, coins were the most prevalent form of money. Today, most money comes from bank credit. Regulating the value of money can only be done today by regulating bank credit, which is properly a public utility. All of our money today is backed only by the full faith and credit of the United States.â€ The credit of the United States is an asset of the people and is properly dispensed and administered through publicly-owned banks using sovereign currency as legal tender.
Q: WHO BENEFITS FROM PUBLIC BANKS?
A: Taxpayers will benefit from both the profits the bank makes and the services the bank provides. Those services depend on the model the state or city chooses to follow, but possibilities include:

Affordable financing to municipalities for public projects.

Access to credit lines, loans, and other forms of finance to help local businesses succeed and grow.

Affordable loans for students to attend college.

Affordable loans on reasonable mortgage terms for home buyers

Q: WHAT PROBLEMS DO PUBLIC BANKS SOLVE?
A: City and state governments pay billions of dollars to banks and investors in interest on loans issued for public purposes. Fifty percent of the cost of infrastructure, on average, goes to interest. Public banks can make below-market loans to state and local governments, saving them millions or even billions of dollars.

Without that alternative, state and city governments today routinely cut programs that benefit low-income citizens and students to close "budget gaps" that appear on a regular basis, leaving many unmet needs for roads, bridges, public transit, energy, housing, education, water, and telecommunications services. If interest payments on infrastructure, housing, economic development, and student loans were going to the public instead of private shareholders, we could lower taxes and create the money to meet basic needs.

Public banks can also reduce the interest paid by consumers and businesses on student loans, home loans and business loans, and they can provide banking services to the un-banked and under-banked.
Q: WON'T GREEDY POLITICIANS USE A PUBLIC BANK TO FUND PET PROJECTS AND LINE THEIR POCKETS?
A: Recent studies have shown that public banks are actually less corrupt - and more profitable - than private banks. They can be structured in their charter to ensure that they are run free of influence from legislators and other high public offices.
Q: WILL A PUBLIC BANK COMPETE WITH LOCAL BANKS?
A: A public bank on the Bank of North Dakota model would not compete with local banks. It would accept deposits only or principally from state and municipal governments-not individuals, organizations or businesses.

Public banks following the lead of the Bank of North Dakota would partner with local and regional banks, allowing them to make loans and take deposits that normally would be out of reach because of their small size. North Dakota (home of the only publicly-owned bank in the United States) has more banks per capita than any other U.S. state.

Rather than competing with local private banks, public banks thus help create adverse, robust private banking system that truly serves the public.
Q: WHY ARE SOME BANKS OPPOSED TO PUBLIC BANKING?
A: The banks that oppose public banking tend to be large, multinational institutions that provide banking services to city and state governments and invest their funds in out of state projects, such as the Keystone XL pipeline and the tar sands in Canada. Government deposits are a cheap source of liquidity for these banks and help to bolster their credit ratings. For local community banks, on the other hand, the high collateralization requirements for government deposits make them of little use; and partnering with a public bank has many benefits. This is evidenced by the fact that the North Dakota Bankers Association endorses the Bank of North Dakota.
Q: HOW COULD A PUBLIC BANK HELP AN ECONOMICALLY STRUGGLING CITY OR STATE?
A: A public bank can help protect the local economy during larger economic crises by providing the city or state government with money in the form of low- or no-cost credit to inject into the economy to maintain essential services and stimulate production and commerce. The Bank of North Dakota supported North Dakota's economy in this way during the Great Depression and the Great Recession.
Q: CAN'T CITIES AND STATES JUST DEPOSIT THEIR FUNDS IN A CREDIT UNION? WOULDN'T THAT AMOUNT TO THE SAME THING?
A: Credit unions contribute to the economic strength of the communities they serve by returning their profits to local members rather than to out-of-state investors. But they are too small by law to handle the banking needs of a city or state. A public bank also differs from a credit union in that its profits go to the public-all the residents and taxpayers of a city or state-for public use.
Q: WOULD A PUBLIC BANK REQUIRE A CITY, COUNTY OR STATE TO RAISE NEW FUNDS THROUGH TAXES?
A: No. Nearly all city, county, and state governments have the money required to capitalize a public bank in the form of existing financial assets. If new money is needed, the local government can issue a commercial bond, repayable over time from bank profits.
Q: WHO WILL SET POLICY FOR PUBLIC BANKS? WHO DECIDES WHETHER TO APPROVE LOANS? HOW ARE DECISION MAKERS INSULATED FROM BRIBES AND PRESSURE FROM POLITICIANS AND BUSINESS INTERESTS?
A: The success of the Bank of North Dakota shows that a public bank can and must be run free of influence from legislators and other high offices.

Elected government lawmakers or policy makers determine the policies that govern the activities of a public bank , or in other words, the bank's mission or "charter." Policy makers can do this with the help of an informed advisory committee. Day-to-day decisions about credit worthiness and lending, on the other hand, are made by professional bankers. These decisions are governed by the bank's charter and subject to transparency and administrative review.

In the case of the Bank of North Dakota, a three-member "State Industrial Commission" oversees the bank's activities. The commission is made up ofthe Governor, the Attorney General and the Commissioner of Agriculture. The Bank of North Dakota also has a seven-member "Advisory Board"appointed by the governor, the members of which must be knowledgeable about banking and finance. The Advisory Board reviews the Bank'sactivities and makes recommendations about the bank's management, services, policies and procedures to the Industrial Commission.

Public banks have a mandate to be fiscally conservative, balancing their requirement to lend in the public interest with careful considerations of the risks involved in lending. Public banks are more cautious in their lending than Wall Street banks. The major credit rating agency Standard & Poor's has consistently awards the Bank of North Dakota an "A" rating, indicating the highest possible levels of confidence in the bank's standards, practices and credit worthiness. According to North Dakota Attorney General Wayne Stenehjem, "The [2013] S&P review of the bank confirmed that it is well-managed and supports the economic needs of North Dakota . . . The report recognized BND for its conservative management strategy."
Q: WOULDN'T THIS PUT STATE FUNDS IN A SIGNIFICANT AMOUNT OF RISK? AND WOULDN'T POLITICAL INTERESTS END UP FORCING THE STATE BANK TO MAKE BAD LOANS?
A. No. The Bank of North Dakota is staffed by a professional banking staff, not an economic development agency, and a state bank would be run based on prudent financial policies, not high risk practices.

The primary asset of a state bank based on the BND model is participation loans where the loan originator is a private bank. This not only serves the purpose of avoiding competition from a state bank, but it also provides market driven checks and balances against manipulation by political actors.

No loan portfolio is immune to loan failures, and a state bank would inevitably have some loan defaults. The Bank of North Dakota's allowance for loan loss ratio (allowance for loan loss/total loans) in Q3 2010 was 1.79%, while the average allowance ratio for comparably-sized (small- and medium-sized) private banks in the U.S. over the same period was about 2.03%. As with other banks around the world, a state bank would have a loan loss provision and would follow prudent banking practices. Thus, even if some loans held by a state bank fail, a state bank could not only cover its deposits, but provide a profit to both the bank and the state (beyond the deposit interest) - through state dividend payments. In 2009, the Bank of North Dakota showed a profit of $58 million-including loan defaults. And on average, the Bank of North Dakota has returned over $30 million per year to the state general fund over the past decade. Analysis suggests that this would be the case in other states as well.

Also, a state bank would work hand in hand with state bank regulators to evaluate its loan portfolio, risk exposure and profitability. A state bank would also be required to meet certain safety and soundness criteria in order to access its own liquidity sources to manage liquidity and interest rate risk (e.g., S&P ratings).
Q: DON'T WE ALREADY HAVE ECONOMIC DEVELOPMENT PROGRAMS THAT DO THESE THINGS?
A: A state bank is NOT an economic development program, and does not replace current state ED efforts. There is still a need for economic development programs and individuals to put together deals and work with businesses; a state bank can simply be a source of revenue to fund these programs as well as liquidity to help underwrite those deals. And because a state bank has the power to leverage funds (10 to 1 as a rule of thumb), it can increase the state's ability to fund economic development, along with helping to support private banks, consumers and businesses across the lending industry.
Q: THE STATE TREASURER ALREADY GETS A GOOD RETURN ON THE INVESTMENT POOLS WE USE, WHY CHANGE THAT?
A: A state bank is NOT a substitute for an investment manager, and we would expect that the treasurer would retain these functions. For example, in North Dakota, BND does not manage the state pension fund investments.
Q: HOW CAN A STATE BANK ACT AS THE STATE'S FISCAL AGENT (CONCENTRATION BANK); WOULDN'T IT BE COST PROHIBITIVE TO SET UP THAT OPERATION?
A: There is nothing to indicate that a state bank would not be able to handle the functions of a fiscal agent and still be profitable. The Bank of North Dakota has certainly done so for North Dakota. And state banks tend to have much lower overhead than comparable private banks due to the lack of branch offices, ATM services, marketing costs, etc. Over the last 15 years (1995-2009) the Bank of North Dakota averaged an efficiency ratio of about 28%, while small and medium sized banks in North Dakota averaged about 62%.

No matter the costs of operating the bank, the cost to the state is nil once the bank is up and running; indeed, as noted elsewhere, the bank should generally return money to the state. The primary difference is that while a concentration bank (like Bank of America) is the only bank to benefit from state deposits, a state bank would spread the benefit to small and medium sized banks throughout the state (through participation loans).

Also, as mentioned earlier, a state bank does not replace all functions of a state treasurer"s office, and we would expect that the same procedures around investment funds would remain.
Q: WOULD A STATE BANK IMPAIR THE NEED FOR LIQUIDITY IN STATE DEPOSITS?
A: No. Just like any private bank, a state bank has to carefully manage liquidity in order to be able to meet all its operational needs. However, this is obviously equally true of any other depository institution a state would use to manage state monies. If state deposits are currently deposited at a private financial institution (say Bank of America), that institution has to manage liquidity so that funds are available to the state to withdraw to meet payroll and other obligations as necessary. A state bank would be no different, and the Bank of North Dakota has demonstrated over the past 90+ years that it can do so capably and still turn a profit.
Q: HOW MUCH DO YOU NEED TO START A BANK?
A: There is no set minimum for start-up capital. Of course, a state bank would need to sustain its capital adequacy, so depending on how much state deposits will be held at the state bank, this could drive the capital needs. It seems likely that there will be a transition stage where the state bank's participation loan portfolio grows and there are arguments for growing the capital at a similar rate. Ultimately, a state bank can be thought of as an economic engine that will be greatly impacted by the inflow of state deposits and reinvestment of profits into state bank capital. CSI analysis shows that even after accounting for debt service obligations due to start-up capital, a state bank would still be profitable after a few years and a strong economic tool for a state.
Q: WHERE WOULD THE CAPITAL COME FROM?
A: The likely sources of state bank start-up capital are the state General Fund, General Obligation Bonds, or other dedicated state funds.
Q: ISN'T SETTING UP A BANK JUST TOO COMPLEX?
A: While setting up a state bank is more complex than, for example, establishing a single revolving loan fund, and there is only one such bank in the country, there are thousands of banks in operation in the U.S. and new private banks are formed every year. In many ways a state bank would be more straightforward to set-up than a private bank. We expect that a state bank would have one location, no marketing, very little direct lending and a single source of deposits (the state). A reliance on participation loans would also reduce the need for bank loan officers and loan brokers.
Q: ISN'T THE REASON THAT BANKS ARE LENDING LESS NOW DUE TO A DECREASE IN LOAN DEMAND OR GOOD LOANS?
A: Not completely. While a reduction in lending during an economic downturn is in part a reflection of decreased demand for new loans (i.e., businesses holding off expansion plans), some part of the demand curve is directly tied to the cost of debt. As lenders tighten their underwriting standards and increase the interest cost to borrowers, demand for new loans naturally drops. This does not mean that there aren't any "good" loans available, only that there is heightened price sensitivity (especially during less stable economic conditions). CSI analysis shows that banks in North Dakota reduced lending 33%-45% less than comparable states, and we believe that this is in no small part due to the stabilizing effects of its state bank.
Q: SURE, A STATE BANK WORKS FOR NORTH DAKOTA, BUT ISN'T MY STATE COMPLETELY DIFFERENT, BOTH POLITICALLY AND ECONOMICALLY?
A: Of course every state has a unique political and economic context. However, it is important to note that the Bank of North Dakota has enjoyed the support of both Democratic and Republican administrations and legislators. Sen. John Hoeven, the Republican former Governor of North Dakota, was President of the Bank of North Dakota earlier in his career.

Economically, it is, of course, difficult to separate the health of the lending market in a state from the overall economic health of the state. Over the past two years, North Dakota has been one of the states least impacted by the recession and it is difficult, if not impossible, to know to what extent that is due to the presence of the BND as opposed to other factors. However, attempting to tease apart the economy-lending linkage slightly, analysis has found that the health of North Dakota's small and medium sized bank lending market has been relatively independent of other major components of the state's economic health (namely, the housing markets and oil and gas industries). This provides circumstantial evidence, at least, that the BND has played an important role in supporting the state's lending market.

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A: A public bank is a bank operated in the public interest, owned by the people through their representative governments. Public banks can exist at all levels, from local to state to national or even international. Any governmental body which can meet local banking requirements may, theoretically, create such a financial institution.

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Why the 'Tax the Rich' mantra is RIGHT but still fails

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Why the 'Tax the Rich' mantra is RIGHT but still fails

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In the midterm election, voters in Washington state defeated Initiative 1098, which would have instituted a state income tax on people making over $200,000 a year and couples making over $400,000 a year (1.2 percent of the state's population).

The initiative lost by a 2-to-1 margin. As was the case elsewhere across the U.S., voter turnout in Washington was lower than 2008, with 70 percent of registered voters taking part, compared to 84 percent in 2008.

Washington state has the most regressive tax structure in the U.S. The poorest 20 percent pay 17 percent of their income in state taxes while the richest 1 percent pay less than 3 percent. I-1098 would have provided $2 billion a year in funding for education and health care while lowering taxes on the vast majority of people. Here, , Chris Mobley and Steve Leigh, activists at the University of Washington in Seattle, explain why the initiative lost.

DO PEOPLE oppose the idea of taxing the rich?

NO. WHEN 1098 was first made public in the spring, a large majority supported it. It collected nearly double the signatures needed to get on the ballot.

WHAT WAS the key reason people voted "No"?

THE NO on 1098 campaign hammered two themes relentlessly: 1098 will drive jobs out of the state, and if 1098 wins, the legislature will extend the income tax to everyone. The first claim had some influence, but the key argument was the second one.

WERE THESE arguments valid?

NO. THE campaign answered the first argument with lots of facts. Forty-three states already have an income tax. States with an income tax generally have higher economic growth than those without. Even had 1098 passed, Washington state would still have a relatively regressive tax structure, so there would be no incentive for the rich to flee the state.

Probably the most important argument from the pro-1098 side was that the rich in Washington state (and the U.S. generally) were sitting on tons of cash and not using it to hire people because of the recession.

Initiative 1098 would take some of that money and use it to hire people--teachers, nurses, social workers, etc. So, rather than being a job killer, 1098 would be a job creator.

The second argument was tougher to defeat. 1098 itself had a clause that the tax rates and the people they applied to could not be changed without a new popular vote. However, the Washington state constitution allows the legislature to change any initiative after two years.

People feared that the legislature would use that clause to impose an income tax on everyone. The 1098 campaign explained that the legislature already has the power to impose an income tax on everyone and has never done this--and that it would be political suicide for them to do so. Finally, the campaign argued that Washington state is prone to initiatives, so any major change in 1098 would provoke a new initiative campaign anyway. All of these counter-arguments were not enough to overcome the fear of an income tax on all.

WERE PEOPLE right to fear an income tax on everyone?

NO. THE arguments put forward by the 1098 campaign were correct, and we had good reason to hope they would carry the day. However, people were right to fear the legislature in general. It has not served the interests of ordinary people.

The Democrats usually control the legislature and the governor's office. This last term, they had a particularly strong majority. They responded to the budget crisis caused by the recession by cutting programs and imposing a new regressive tax on ordinary people--the tax on candy, soda and bottled water.

The legislature has allowed the raising of the very regressive sales tax by cities and counties. In Seattle, people pay nearly 10 percent in sales tax. The legislature has also given major tax breaks to corporations and the wealthy. The overall result is that ordinary Washington residents are extremely overtaxed, while the wealthy are very, very undertaxed.

This results in a perpetual crisis of funding for needed programs. For example, Washington state ranks in the bottom 10 states in education funding per student and has some of the highest class sizes in the U.S.

Especially with the recession making it hard for people to find jobs, keep their houses, get or keep health care, etc., the reaction of many people was "I can't risk a new tax. I can barely make it now." The vote against 1098 was part of the anti-incumbent mood that swept the country November 2. In this case, distrust of the legislature, distrust of the Democrats took down 1098.

WAS THE failure of 1098 part of a conservative tide in the electorate?

NO. THE results on other initiatives were often progressive. Voters rejected privatization of workers' compensation, which would have hurt workers and provided a boondoggle for insurance companies. They rejected privatization of liquor sales, which would have cost the state millions in revenue.

This shows that people were distrustful of corporations as well as of the politicians who defend corporate interests. They rejected the regressive tax on candy, soda and bottled water. They did, however, show their opposition to the politicians by tying their hands with a super-majority requirement to raise new taxes.

This was part of the anti-tax mood in the face of the recession. However, even the anti-tax mood was mixed. Some school levies passed, for example. In general, ordinary people were trying to defend their interests against the politicians and the rich, but were sometimes confused about how to do that.

WHOSE FAULT was the defeat?

THE MAJOR culprit for the failure of 1098 was the legislature, the governor and especially the Democratic Party. The record of the Democrats in consistently defending the interests of corporations set up the distrust that led to 1098's defeat.

Related to this is the political strategy of the labor movement in the state (and nationally). The labor leaders have tied their futures to the Democrats. They raised millions of dollars to elect the governor, Christine Gregoire, who then turned around and stabbed state employees and service recipients in the back by cutting the budget.

Because they have put so much time and energy into electing the "lesser-evil" pro-business party, they have neglected to promote workers organizing and fighting back directly.

In fact, it got worse than this--the strategy of union leaders is often to dampen down potential struggle so as to make deals with employers and politicians. Because there has been little collective fightback against the budget cuts, people have been encouraged to look to individual solutions to the recession. Part of the quest for individual solutions was "Keep my taxes low at all costs." There were also some failures of strategy and tactics in the 1098 campaign.

WHAT WERE some of the failures in the campaign?

THE CAMPAIGN stressed that 1098 was a "middle-class tax cut." This was correct in that working-class and middle-class class people would have seen their taxes drop slightly. However, most people rightly saw this as a very small tax cut, and feared a bigger tax increase later.

The campaign did not tap into the anger of people against Wall Street and the rich by stressing "tax the rich." This message resonated well when it was tried, but wasn't tried enough. It also did not lay out as starkly as necessary the draconian level of cuts that would come from its failure. 1098 TV ads at first refused to use the word "income tax," which came across as deceptive.

Finally, the campaign was well funded and well staffed as a traditional election campaign, but did not organize as a grassroots campaign. There were no public rallies. Volunteers were plugged into phone banking and door belling, but did not have democratic input into the strategy and tactics (except at the University of Washington and perhaps a few other places that stressed public tabling, speak-outs and democratic meetings to mobilize energy).

For all the faults, the main problem was not campaign strategy, but the overall political climate.

WHAT DOES the future hold for taxing the rich and solving the budget crisis in Washington?

THE BUDGET crisis at the state and local level continues throughout the U.S.--and the world. The financial crisis has morphed into a crisis of government funding. Austerity is sweeping the planet.

Last year, the state faced a $9 billion budget short fall. This year it is expected to face another $5 billion gap. In the face of this, and in the face of attacks by private employers, people will be pushed to fight back.

Part of that fightback will be other attempts to change the tax structure here in Washington as well as other places. People will see the results of the defeat of 1098 and begin to reassess their options. When the level of collective struggle rises, people will see the need for society-wide solutions, instead of just hunkering down and seeking individual ways out.

The role of socialists and other radicals and activists will be to do whatever we can to encourage the increase in collective struggle. We will continue to organize against layoffs and wage cuts to teachers and other state workers. But making these struggles more effective will require a broader understanding of what caused the crisis and what solutions are likely to work.

Socialists need to provide a deeper political analysis to help fill that need. If labor activists and other organizers continue to depend on the Democrats, they will continue to fight with one had tied behind their back while their "friends" attack them form behind.

There has never been a more important time for socialists to be active in organizing a fightback and in providing a political strategy and analysis that can help make the fightback more effective.

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In the midterm election, voters in Washington state defeated Initiative 1098, which would have instituted a state income tax on people making over $200,000 a year and couples making over $400,000 a year (1.2 percent of the state's population). The initiative lost by a 2-to-1 margin.

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This Moment: Federal Policies We Must Fight For

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This Moment: Federal Policies We Must Fight For

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In 2021, the new Congress and administration will inherit an unprecedented number of crises - from a devastating pandemic and recession to exploding levels of economic, racial, and gender inequality. To date, the public policy response to these crises has been weak to nonexistent.

To meet the scale of these challenges, the Congressional Progressive Caucus has unveiled a People's Agenda of legislative priorities for 2021. It includes monthly stimulus checks of $2,000 - far more generous than the one-time $600 payouts recently authorized by Congress - and action on many other fronts, from hazard pay and strong workplace protections for frontline workers to student and medical debt cancellation.

The Institute for Policy Studies joined with the Kairos Center, Repairers of the Breach, and the Poor People's Campaign to analyze the potential benefits of the People's Agenda for the country, with a particular focus on women, people of color, and poor and low-income families.

Our joint fact sheet lays out the scale of the economic and public health crises facing the country, as well the stark inequalities they've exacerbated. Broadly speaking, the impacts have been most severe for Americans of color, low-income people, and women. But this also means that robust action to address these crises now could also begin to repair decades of damage.

We highlight research finding, for example, that canceling up to $50,000 in student debt would erase all debt for more than three-quarters of student loan borrowers and significantly narrow racial and gender wealth divides. And while emergency relief is the first priority for jobless Americans, robust public investment in renewable energy, energy efficiency, and public transit could help the country achieve a full employment economy while reducing inequalities in energy and transit access.

Backed by IPS research, the Progressive Caucus will also be fighting to restructure our tax system to ensure that the wealthy, corporations, and Wall Street - who have profited enormously during the pandemic - pay their fair share for recovery. The People's Agenda also calls for cutting military spending and ending the wars in Yemen and Afghanistan, which IPS research shows would free up enormous resources for social programs.

Congress and the Biden administration will need to use every tool in the toolbox to combat the challenges of our time - and make our country stronger in the face of future crises. Read our full fact sheet to see how.

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Fact Sheet: Congressional Progressive Caucus Priorities - Institute for Policy Studies

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In 2021, the new Congress and administration will inherit an unprecedented number of crises - from a devastating pandemic and recession to exploding levels of economic, racial, and gender inequality. To date, the public policy response to these crises has been weak to nonexistent.

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Why the Poor People's Campaign is About All of Us

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Why the Poor People's Campaign is About All of Us

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Moral Monday with One Fair Wage

Join us on Monday, Feb. 8th to support the Raise the Wage Act!
CLICK HERE

14 Policy Priorities to Heal the Nation

A Moral and Economic Agenda for the First 100 Days
CLICK HERE

COVID-19 & Poverty Memorial Wall

A collective place to mourn and remember
CLICK HERE

"I took this picture of him w/ his dad. It was his last picture taken before he contracted covid in late January. Please listen to medical experts & together we can try to save lives." Christina Caasi
We honor the life of #EricCaasi: #PoorPeoplesCampaign http://memorial.poorpeoplescampaign.org

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"I took this picture of him w/ his dad. It was his last picture taken before he contracted covid in late January. Please listen to medical experts & together we can try to save lives." Christina Caasi We honor the life of #EricCaasi: #PoorPeoplesCampaign http://memorial.poorpeoplescampaign.org This error message is only visible to WordPress admins Error: There is no connected account for the user papoorpeoplescampaign.

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Criminalization of Poverty: Race & Class Indelibly Intertwined

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Criminalization of Poverty: Race & Class Indelibly Intertwined

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Criminalization of poverty has increased significantly in the U.S. since the Great Recession of 2009. Poor and low-income people, especially people of color, face a far greater risk of being targeted, profiled, fined, arrested, harassed, violated and incarcerated for minor offenses than other Americans. A broken taillight, an unpaid parking ticket, a minor drug offense, sitting on a sidewalk, or sleeping on a park can all result in jail time.

The criminalization of poor people happens at the intersectional oppressions of race, class, gender and gender identity. The criminalization of children is especially inhumane and disproportionality affects low-income Latinx and Black children, LGBTQI children and children with disabilities. The school-to-prison pipeline is a significant factor in removing opportunities for self-fulfillment, education and employment, often creating and perpetuating poverty.

By conducting research and reports on the various components of these injustices, and supporting movements on the ground with resources and capacity, the Criminalization of Poverty project aims to encourage and influence policy that will move us from intersectional in justice into intersectional justice.

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Criminalization of Race and Poverty - Institute for Policy Studies

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Criminalization of poverty has increased significantly in the U.S. since the Great Recession of 2009. Poor and low-income people, especially people of color, face a far greater risk of being targeted, profiled, fined, arrested, harassed, violated and incarcerated for minor offenses than other Americans.

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Angela Davis (video): We can't eradicate racism without eradicating racial capitalism

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Angela Davis (video): We can't eradicate racism without eradicating racial capitalism

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Angela Davis: We can't eradicate racism without eradicating racial capitalism

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POLICY SOLUTIONS: Progressive Roadmap Deep Dive Analysis

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POLICY SOLUTIONS: Progressive Roadmap Deep Dive Analysis

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Leaders Connecting the Dots; Their Time Has Come (ahem, Chairman Sanders)

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Leaders Connecting the Dots; Their Time Has Come (ahem, Chairman Sanders)

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Bernie Sanders Addresses the National Rainbow Coalition Conference 1986

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Movie Trailer: Judas & the Messiah How Does Pop Culture Effect Change?

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Movie Trailer: Judas & the Messiah How Does Pop Culture Effect Change?

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Judas and the Black Messiah – Official Trailer – Warner Bros. UK

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COVID Memorial: Poor People's Campaign Illuminates How Poverty + Racism Interact

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COVID Memorial: Poor People's Campaign Illuminates How Poverty + Racism Interact

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A collective place to mourn and remember our friends, family members, and community members who have been lost due to the COVID-19 pandemic and poverty. These are stories of their lives.

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Seattle Activism: The Renaming of Empire Way to Martin Luther King Jr. Way

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Seattle Activism: The Renaming of Empire Way to Martin Luther King Jr. Way

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It's fairly well known around Washington state that King County is named in honor of Dr. Martin Luther King, Jr.

Of course, when it was originally named back in 1852, what's now the State of Washington was part of Oregon Territory, and the county's namesake was William Rufus DeVane King. King was sworn in as vice president in Cuba and only made it as far as Mobile, Alabama before he died six weeks later in 1853. King's running mate in the election of 1852 had been, you guessed it, Franklin Pierce.

The process of re-dedicating King County to Dr. King began in the mid-1980s, and it was controversial. It took many years, and it took the efforts of the King County Council and State Senator Adam Kline before it became official in 2005.

What's not so well known nowadays is that a few years before the King County re-dedication efforts began, a group of local activists worked to change the name of a major thoroughfare through Seattle in honor of Dr. King.
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The street was Empire Way, stretching from Madison Street south through the Central Area, the Rainier Valley and the west side of Beacon Hill all the way to the city limits. Sound Transit light rail now runs down the center of the street from Rainier Avenue several miles south on its route to Sea-Tac Airport.

Seattle's Empire Way

The southern portion of Empire Way, beginning at Dearborn Street, was first mapped out by the city in 1913 as a major north-south thoroughfare parallel to Rainier Avenue. One theory is that creation of the parallel route may have been seen as a way to dilute the power of the private company that owned the streetcar line along Rainier Avenue and that wouldn't sell out to a larger firm that was consolidating many of the other private lines in the city in those years. It was a rough and tumble time, particularly in the field of transportation and real estate speculation.

Some accounts from recent decades say the street was named in honor of "Empire Builder" James J. Hill, the Great Northern Railway magnate whose links with the Pacific Northwest and Seattle helped build the region and the city. Hill spoke at the 1909 Alaska-Yukon-Pacific Exposition and apparently made quite an impression; a statue of him still stands on the UW campus where that fair was held.

Northern portions of Empire Way, from Dearborn to Madison, were created in the 1930s, though Montlake residents successfully stopped attempts by the city to push Empire Way through the Washington Park neighborhood to connect with the Montlake Bridge.

There are many twists and turns in the history of Empire Way, and the street had its name changed once before back in 1961, when plans called for the "R.H. Thomson Parkway" ( aka "Thomson Expressway") to follow the route of Empire Way from Highway 520 to what's now Interstate 90. Much like they did in the 1930s, Montlake activists again shut down the city's plans to bisect their neighborhood, and the name "Empire Way" came back.

Fast forward a few decades, and this time, it was an activist from the Central Area who led the effort to change the name of Empire Way to Martin Luther King, Jr. Way.

Eddie Rye is 75 years old and still very active in the community, and still working as a consultant. His dad was a Pullman porter, and the family moved to Seattle in 1952 from Shreveport, Louisiana when Eddie was 10 years old. He grew up in the Central District and has witnessed much change in the old neighborhood.

Earlier this week, Rye stopped at the corner of Martin Luther King, Jr. Way and Cherry Street. He shared his memories of being in Seattle on the day that Dr. King was assassinated 50 years ago in Memphis, and described how the name changing effort began one night just a dozen years later.

Eddie Rye's name-changing campaign

It was November 1980 when Eddie Rye was hosting a radio program on KYAC, and Jesse Jackson was his in-studio guest.

"During the interview, Reverend Jackson indicated that Stevie Wonder was having a huge event on January 15, 1981, to demand that Congress make Dr. King's birthday a national holiday," Rye said. "And since we were so far removed from Washington, DC geographically, Reverend Jackson suggested that many cities were having various things done in Dr. King's honor. [With] this push to have Dr. King's birthday become a national holiday, it was more important for people to do things locally to keep pressure on Congress."

Eddie Rye organized a campaign to get the City of Seattle to change the name of Empire Way. His group ran into opposition from people in the community who thought it would be better to name a library or a school or even the Kingdome after Dr. King. In May 1981, the Seattle Board of Public Works, the part of the city that made decisions on street names, suggested a compromise of renaming just a several-block portion of Empire Way.

But Rye found allies on the Seattle City Council in George Benson and Sam Smith, and the City Council unanimously passed an ordinance in July 1982 renaming all eight miles from Madison Street to the city limits. Mayor Charles Royer signed it on July 29, 1982.

Opposition from Seattle businesses

But then, a group of merchants along Empire Way, mostly south of Rainier Avenue, filed a lawsuit to stop the renaming of the street. It shut down the process. So Eddie Rye's group organized a boycott of some of the businesses.

They also made their own "Martin Luther King, Jr. Way" signs and did a guerrilla installation project one weekend in late 1982 or early 1983.

"One Saturday, a group of folks made some signs up and I think we put 'em up probably from Union all the way down to Yesler," Rye said. "They were made just exactly like the street signs. It was windy and rainy and it was a mess, [and] I refused to climb that high up on the ladder, too."

Eddie Rye says that the group of merchants who filed the suit claimed only fiscal reasons for their opposition to renaming Empire Way.

But Rye was skeptical.

"So they were going, 'We have to change our letterhead,'" Rye said. "How much letterhead does a second-hand store or a pizza shop [need]?"

Asked if there was some other motive for the merchants' lawsuit, Rye paused.

"We know what it was," he said.

Pressed further, Rye answered, "It was racism, that's what it was."

In the early 1980s, Rye says, more overt forms of racism were a thing of the very recent past in Seattle.

"It'd been a few years since blacks could try on clothes [at department stores] in downtown Seattle . . . [or work] certain jobs, [or be] able to go to certain restaurants," Rye said.

And Eddie Rye says racism is still a factor here, in that African Americans are still being treated unfairly because of realities such as Initiative 200 - and how it banned racial and gender preference in the granting of state contracts and enrollment in state universities. He calls the effects of these changes a kind of "economic apartheid."

The lead plaintiff in the Empire Way merchants' suit against the city was a man named Don Heider, who owned a store called Four Star Lumber. The business was sold many years ago, and Don Heider passed away in 1990. His son John, who also worked in the family business with his father, now lives in Idaho.

Does John Heider think that long-ago lawsuit against the street re-naming stemmed from racism?

"No, no, not with the people that were supporting with my father," John Heider said, though he acknowledges there was prejudice and resentment in the community at that time. "[The lawsuit] was strictly a business recognition and financial burden that they were feeling, that they were going to have to unnecessarily at that time shoulder."

Along with prejudice and resentment, the early 1980s were also a time of economic recession and tepid recovery.

"I remember at that time, times were tight," Heider said. "And nobody needed the additional expenses of maintaining legal documents, letterhead, signage things like that."

"We never could afford to repaint our trucks at the time to change it all before we ended up selling the business off," Heider said. "We never did make any changes. They all stayed the same."

But more than three decades later, things aren't the same, and it's hard to find any physical reminders of Empire Way. An informal survey of the entire length of Martin Luther King, Jr. Way earlier this week turned up only one remaining "Empire Way" reference still visible, on a tall sign for a private shopping center just north of South Graham Street.

Mayor Charley Royer recalls the name change

Charley Royer served three terms as mayor of Seattle, including during the time of the re-naming of Empire Way.

Royer says that the names we choose to attach to our public places matter.

"Oh, it does. It really does, it really does," Royer said by phone on Monday.

"I had several of those when I was in office. One was the re-naming of SeaTac [by the Port of Seattle] as the Henry M. Jackson International Airport. Tacoma took umbrage at that. It was like a sharp stick in the eye of people from Tacoma," Royer said.

Long-standing Tacoma-versus-Seattle "city envy" is one thing, but does Charley Royer think racism was involved in the opposition to the re-naming Martin Luther King, Jr. Way?

"I think there was a hint of that, [but] I don't think it was the dominant factor. I think more of a factor was just like what's going on in Seattle now," Royer said. "Dramatic change, and a lot of people who don't look like your old neighbors in your old neighborhood."

Royer also says he admires Eddie Rye's energetic commitment to the cause, but that this sometimes could backfire.

"He could be a little sharp-edged," Royer said. "[He's a] very smart guy and a good guy, I think. He was young and pretty aggressive and he could rub you the wrong way. So I think that was part of the problem for some merchants out on Empire Way who didn't like the expense [of new signage] and thought it was a waste of money on the city's part."

Royer says the businesses had a point about potential financial impacts, but that the outcome of the dispute ultimately worked out for the best.

"There were a lot of very small businesses out there, and it was a very different time the 1980s from the 2000s and small businesses, a lot of the minority-owned, were kind of struggling. So they had a legitimate concern, but I think cooler heads prevailed and I think it turned out fine," Royer said. "I don't know that anybody paid much attention after [the name change was made], and almost every city in the country has got a Martin Luther King, Jr. Way now, so it was kind of a national thing."
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The ruling from the Washington State Supreme Court came down on November 30, 1983. The name change could now proceed, and the signs - 217 of them, according to one media account at the time - started going up the very next day. The first one was installed above Cherry Street.

Hopeful for the future

And it was at Cherry Street and MLK, Jr. Way the other morning where Eddie Rye spoke near a mural of Dr. King and lamented how few African Americans still live in the Central Area. Changing demographics are another example, Rye says, of the "economic apartheid" that's driving lower-income people, including African Americans, out of Seattle.

But, regardless of the demographic shifts along what used to be Empire Way, Rye is still proud of what he and his group accomplished 35 years ago.

"I can say 'Thank God it was done,' and say the same thing about the county [re-dedication]," Rye said. "We have the only municipality in the country named for Martin Luther King, Jr. up in the remote Northwest."

And in spite of the other challenges facing the city and the country, Eddie Rye remains hopeful about the future.

"If you don't have hope you die ... so I definitely have hope," Rye said. "As long as I have energy I have hope because I know change begins with me. I'm not the kind of person to go around and try and do a study or a poll, [and ask] 'Do you think we should do this?' If it's wrong, and something needs to be done about it or said about it, I have no problems with doing that."

What better tribute could there be to Dr. King here in King County?

Eddie Rye, Jr. will be taking part in a ceremony and special program commemorating Dr. Martin Luther King, Jr. beginning at 6 p.m. at Mt. Zion Baptist Church on Wednesday, April 4.

The church is on Madison Street, about eight blocks west of the northern end of Martin Luther King, Jr. Way.
More from Feliks Banel

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Seattle's long-ago battle to honor Dr. Martin Luther King Jr.

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It's fairly well known around Washington state that King County is named in honor of Dr. Martin Luther King, Jr. Of course, when it was originally named back in 1852, what's now the State of Washington was part of Oregon Territory, and the county's namesake was William Rufus DeVane King.

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Rainbow Coalition Chicago Activism on Racial & Social Justice

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Rainbow Coalition Chicago Activism on Racial & Social Justice

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It would be foolhardy to try to succinctly sum up the political history of one of America's most historically politically complicated cities-Chicago-in one sweeping post. Rather, consider this a basic primer of touchstones that connect some key dots, with recommendations for ways to learn more, as you think about the histories presented in two essentially Chicago documentaries, and by extension, two quintessentially American stories: The First Rainbow Coalition , and Cooked: Survival by Zip Code .

From the protests and upheaval of the 1960s to the tragedy of the '90s heat disaster, Chicago has often been a hotbed of unrest and reassessment, oftentimes paralleling the story of America, but in its own big way. It is, after all, what Carl Sandburg once called the "City of the Big Shoulders" and "Freight Handler to the Nation." And as the "Hog Butcher to the World" (also Sandburg), Chicago was the subject of Upton Sinclair's seminal, harrowing 1906 work The Jungle, about the harsh conditions and exploited lives of immigrants working in the meatpacking industry. Sinclair was an activist-writer in his way, though while he stimulated change through his words:

When was published, its readers were outraged-but not in the way Sinclair had hoped. Their primary concern was food quality rather than the dangerous labor practices and cruel treatment of animals that Sinclair sought to expose. "I aimed at the public's heart, and by accident I hit it in the stomach," he said. Using the public's reaction to the novel, pushed Congress to pass both the Theodore Roosevelt Pure Food and Drug Act, which ensured that meatpacking plants processed their products in a sanitary manner, and the , which required that the Meat Inspection Ac t U.S. Department of Agriculture inspect all livestock before slaughter.

While sometimes larger than life, these Chicago histories reflect on all of us, they are American stories.

The history of Chicago mayors alone would make the most colorful collection of anecdotes: They have generally (but not always) been members of the Democratic Party, but on all points across the political spectrum, some beloved, some considered corrupt, some both - many powerful and often at odds with the rising activists representing the underrepresented, the people at the margins. Mayors figure prominently in both First Rainbow Coalition and Cooked, but here I'll touch more on just some of the other seminal people and events in 20th century Chicago activism, with links and clips to help you learn more.
Early 20th Century Activism
As detailed in the book When Republican Mayor City Indian: Native American Activism in Chicago, 1893-1934, Native Americans were active on the political front in the city, raising their point of view on numerous issues. "Big Bill" Thompson, a famously larger than life figure who ran the city from the 1910s to the early '30s, declared that Chicago public schools teach "America First," American Indian leaders publicly challenged him to include the true story of "First Americans."

(*"Thompson was a buffoon, a smart showman, a shrewd politician, all in one," wrote James Doherty, who covered him for the Chicago Tribune, in a 1951 assessment. [ source])
Race Riot
Thompson was presiding over Chicago during a terrible race riot in 1919, considered the worst spasm of racial violence in the city's history. White mobs attacking African Americans were epidemic in American cities small and large at that same time, in what was dubbed "Red Summer" in America, stemming in part from rising tensions after WWI, an economic slump and competition for jobs, fear of socialism's influence on civil rights, and racial bigotry.

From an piece on the anniversary of the Chicago riot:

Researchers believe that in a span of 10 months, more than 250 African Americans were killed in at least 25 riots across the U.S. by white mobs that never faced punishment. Historian John Hope Franklin called it "the greatest period of interracial strife the nation has ever witnessed."

The bloodshed was the product of a collision of social forces: Black men were returning from World War I expecting the same rights they had fought and bled for in Europe, and African Americans were moving north to escape the brutal Jim Crow laws of the South. Whites saw blacks as competition for jobs, homes and political power.

This awful event had repercussions in Chicago that lasted decades. Read more in this absolutely vivid, eye-opening oral history in Chicago Magazine by Robert Loerzel .

For nearly a week in the summer of 1919, Chicago descended into "a certain madness," in the words of the city's leading black newspaper, the Chicago Defender . White mobs assaulted virtually any black person they could find on the streets, and blacks engaged in deadly acts of retaliation and self-defense. By the time the violence subsided, 38 men - 23 of them black and 15 white - had been killed and more than 500 people were injured. "Chicago is disgraced and dishonored," the Chicago Daily Tribune declared. "Its head is bloodied and bowed, bloodied by crime and bowed in shame. Its reputation is besmirched. It will take a long time to remove the stain."

Jolting Chicago during the early years of the Great Migration, the riot cast a shadow over race relations in the city for decades. A hundred years later, it remains the worst outbreak of racially motivated violence in Chicago's history - and one of the deadliest nationally.

The aftermath of the attacks and riots, and subsequent outcry led the Illinois governor to create a bi-racial " Chicago Commission on Race Relations " to find solutions to racial tension. This was seen at the time as a step forward that led to many well-intentioned fixes, but that ultimately did not really mend deep-rooted tension.

"I am proud of this city, but not always proud," commission member George Cleveland Hall, a 55-year-old black surgeon at Provident Hospital, said at one meeting. "I am not proud when I remember that the homes of 27 Negroes have been bombed and no steps have been taken to apprehend the criminals. I am not proud when I remember that not a single civic organization has taken a definite stand in protest against these outrages. The Negro is silent, but he is thinking. He cannot be expected to remain patient forever under these continued attacks."

The commission released its findings in 1922. The 672-page report, titled The Negro in Chicago: A Study of Race Relations and a Race Riot, detailed how blacks faced discrimination in nearly every aspect of their lives. It urged reforms at all levels of Chicago society, from City Hall, police stations, and courthouses to real estate offices, churches, and newsrooms - reforms intended to ensure that people were treated the same, regardless of skin color. The report condemned segregation as illegal and "impracticable," warning that it would only "accentuate" racial tensions.

It all sounded well and good, but as later wrote in the autobiography she was working on at the time of her death in 1931, "many recommendations were made, but few, if any, have been carried out. Chicago has thus been left with a heritage of race prejudice which seems to increase rather than decrease." [ Ida B. Wells Chicago Magazine]

Ida B. Wells name is now famous enough to have schools named after her (and also the name of a Chicago Housing Authority (CHA) public housing project), and yet still seems an overlooked figure in early civil rights history, who risked her life many times to tell and print the truth. In 1919, she was a pioneering young Chicago journalist who was one of the few reporters to interview victims, and played an important role in getting that story out, as well as bravely telling the true and brutal stories of lynching in the South.
1919 Riots: Further Viewing and Reading

Pioneering silent film director Oscar Micheaux, considered "the father of Black Cinema," made a film called Within Our Gates which was created as an answer to, or clapback at, DW Griffith's technically brilliant but racist epic Birth of a Nation. The film centered around these 1919 race riots that took place only months before the film was completed, a rather remarkable feat for the time.

Brad Hunt, Vice President for Research and Academic Programs at the Newberry, helped devise and coordinate the programming with the partner organizations. He said he never tired of the "a-ha!" moments, when audiences could see how inequality has been created and reinforced over the decades. "I think we've already changed the conversation in the city," Hunt said.

He believes the larger impact of the series will be how it brought people together around something once so divisive. And it was important, he said, to draw parallels between 1919 and current events, such as the protests and reform demands that followed the fatal police shooting of black teenager Laquan McDonald in 2014.

"We don't talk about the riots enough-and we need to...because it's not hard to draw a line from Eugene Williams to Laquan McDonald," Hunt said.

Eugene Williams was an African-American teenager who drowned in Lake Michigan on July 27, 1919, after being stoned by a white man. He was attacked after floating over an invisible color line separating supposed white and black sections of a beach near 29th Street.
Congress of Racial Equality (CORE)
While World War II raged on, back in Chicago one of the earliest vestiges of the Civil Rights Movement was formed, one that would influence more famous touchstone moments to come in the '50s and '60s.

In 1942, this new organization aimed to focus on nonviolent direct action. Its founders had been influenced by the protest tactics of India's Mahatma Gandhi. Many will be surprised to learn that it was a group of Chicagoans who were first staging sit-ins, ahead of the famously important ones to come in the South some years later, but indeed this new organization, the Congress of Racial Equality (CORE), staged sit-ins and other protests against discriminatory Chicago restaurants and recreational centers. In the late 1940s activists of the United Packinghouse Workers union also targeted segregated eateries. By the early 1960s, most public accommodations in the city were open to African Americans. [ ]

Black and white activists from the Christian pacifist movement, including James Farmer and George Houser, created the Chicago Committee of Racial Equality, the first chapter of CORE, in 1942. The interracial group advocated nonviolent direct action to address racial discrimination. Not a mass membership organization, CORE depended on a small group of disciplined activists to conduct their campaigns to desegregate public accommodations, workplaces, and housing. Pioneering the use of sit-ins and other civil disobedience for civil rights causes, the Chicago chapter reached a high point when the organization desegregated department store the following year, the chapter became inactive during the 1950s until its disaffiliation. [ White City Roller Rink in 1946. After a failed employment campaign at a The Encyclopedia of Chicago]

One day in May 1942, a group of young Chicagoans - black and white - opened a key chapter in civil rights history by refusing to take no for an answer when told that Jack Spratt Coffee House on East 47th Street didn't serve African-Americans. At the time, the world took little notice. "If we were lucky, there might be a small paragraph on a back page of the Chicago Tribune saying, in effect, that a few nuts and crackpots sat in a restaurant until they were served, or thrown out, or the place closed - whichever came first," James Farmer recalled in his 1985 memoir, "Lay Bare the Heart."

Farmer was an organizer for the Fellowship of Reconciliation with a hunch that the organization's pacifist commitment to turning a cheek in the face of violence could be a weapon with which to combat segregation. The U.S. said it was fighting World War II to save democracy abroad, even as African-Americans were denied equal rights at home by Southern laws and Northern customs.

To test his idea, Farmer and 27 others, many of whom lived around the University of Chicago campus, went to the nearby restaurant, known to be unfriendly to African-Americans. As expected, whites were served, and blacks were not. All rejected the management's proposal that they dine in the basement. The police refused to remove Farmer and his friends, saying they hadn't broken any Illinois laws. Jack Spratt afterward quietly dropped its anti-black policies.

Eighteen years later a group of college students struggling to desegregate a Woolworth's lunch counter in Greensboro, N.C., sought advice from the Congress of Racial Equality, which was born during the civil rights campaign on 47th Street. In the South in 1960, police and whites were hardly the nonpartisan bystanders their Chicago counterparts had been. Food was dumped on protesters, who were also beaten and arrested.

It should be added here that from the late '60s onward, the modern incarnation of CORE, under the direction of Roy Innes (who passed away in 2017), was criticized in progressive circles for taking a much more conservative turn, including working for initiatives that seemed at odds with environmentalism, for climate change denial, and a series of controversial invitees to Martin Luther King Day festivities that included Republican strategist Karl Rove.
Pilsen and Little Village Neighborhoods
WTTW has an engaging interactive history of this historically industrial lower west side neighborhood that is now rich in Latino culture, after having seen many incarnations over the years. Focusing on the so-called "urban renewal" of the area, Pilsen, and the nearby Little Village area, are interesting examples of neighborhoods that became strengthened around identity, developing a sense of community.

The coming "Rainbow Coalition" actually had some precedence in the mini grassroots coalitions that formed protectively around issues of urban displacement in this part of Chicago.

It began with the construction of the Stevenson Expressway in the mid-1950s. That project displaced many lower-income Chicagoans from the Near West Side, including several Mexican families. They moved just south to the area surrounding Hull House. There, they joined an ongoing grassroots movement of black, Latino, and Italian-American residents hoping to leverage urban renewal policies to secure safer, more dignified affordable housing units in their existing neighborhoods. They had already secured "blighted" status for the area surrounding Harrison and Halsted, unlocking government-backed loans and other funding streams and triggering eminent domain laws that could force the removal of residents. They were in discussions with city officials and drafting plans for a new, mixed-use affordable housing project on the site. The Chicago Land Clearance Commission began appraising and purchasing lots, and residents began moving out.

This kicked off a wave of migration as Mexican families were displaced, and ended up going south to Pilsen. As the neighborhood became more and more predominantly Latino in the '60s, activist groups formed to transform the feel of the area:

And they began challenging more established institutions. In 1969, several emerging Latino leaders in Pilsen began criticizing Howell House, a local settlement house that opened in 1905, for failing to meet the needs of the changing community. In 1970, they succeeded in renaming the building Casa Aztlán, in reference to the Chicano power movement, which was gaining strength across the country. Soon after, the church-based funders pulled out and Mexican and Mexican-American activists took over the building wholesale. The Brown Berets, an organization allied with the Black Panther Party, took the lead, turning it into a completely independent hub of community and political organizing. They ran it with an all-volunteer staff and provided affordable housing for artists and activists, a free clinic for local residents, and a meeting space for throngs of young radicals.

Sadly, the Casa Aztlán building recently was re-developed and the original murals that were an iconic part of the building were lost, though the developer offered a wall dedicated to new murals.
"The First Rainbow Coalition"
A highly unlikely alliance formed in Chicago in the tumultuous 1960s: Latinos of the Young Lords organization, members of the Chicago chapter of the Black Panther Party, and the working-class young southern whites of the Young Patriots, a union that shocked some allies and scared police and the FBI, who feared the coalition would upend the social order. One key member of the coalition, Black Panther Fred Hampton, quickly demonstrated his leadership skills by securing a nonaggression pact among Chicago's most powerful street gangs and by organizing rallies, blood drives, a health clinic, and free breakfast programs.

He was only 21 years old when he was killed-along with fellow panther Mark Clark-during a predawn raid at his Chicago apartment by Chicago police on December 4, 1969.

"The Rainbow Coalition presented a possibility," says historian Lilia Fernandez. "It gave us a vision for what could be in terms of interracial politics among the urban poor."

The activists at the center of this new coalition included: the Young Patriots' Hy Thurman, who was born in Tennessee to a family of sharecroppers and moved to Chicago seeking new opportunities but instead finding mostly poverty when he ended up in the Uptown area local upper-class whites derisively called "Hillbilly Harlem"; Jose "Cha Cha" Jimenez, a founding member of the Latinx street gang Young Lords he later relaunched as a human rights organization, who resided in Chicago's Lincoln Park neighborhood; Robert "Bob" E. Lee III was a member of the Illinois Chapter of the Black Panther Party and was instrumental in building the Rainbow Coalition, alongside Hampton. Lee was born in Houston, Texas, and learned community organizing from his activist father, the civil rights leaders that frequented his mother's nightclub, and the Longshoreman Union organizers that lived across from his family home.

Further Reading and Viewing

In addition to of course the film The First Rainbow Coalition , which covers this in great detail, you can learn more about the people in this little-known but groundbreaking movement, through these tools:

First Rainbow Coalition Discussion Guide , written by Renee Gasch and overseen by filmmaker Ray Santisteban.

Hillbilly Nationalists, Urban Race Rebels and Black Power: Community Organizing in Radical Times , book by Amy Sonnie and James Tracy

, documentary by Mike Gray and Howard Alk (The Murder of Fred Hampton Facets Video, or streaming on Amazon Prime)

Judas and the Black Messiah: Fictionalized film with 2021 release about Hampton, the Black Panthers, and Hampton's murder.
The '68 Convention and the Chicago 7 or 8 (or 10)
First of all, which is it - were there 7 on trial, 8 or 10?

Social activist and counterculture icon Jerry Rubin may explain it best, as heard in the film Chicago 10: "Anyone who calls us the Chicago Seven is a racist. Because you're discrediting Bobby Seale. You can call us the Chicago Eight, but really we're the Chicago Ten, because our two lawyers went down with us." These activists- Abbie Hoffman (probably the most famous of the group, a "Yippie" and leading proponent of the Flower Power movement) , Rubin, David Dellinger, Tom Hayden, Rennie Davis, John Froines, and Lee Weiner -were anti-war protestors who were charged with inciting a riot and conspiracy for their part in demonstrations that led to violent clashes with Chicago police outside the 1968 Democratic National Convention.

Black Panther Seale was the eighth man charged but had his trial severed during the proceedings (and, infamously, Seale was literally bound and gagged during the trial on orders from the judge), which reduced the number of defendants from eight to seven. For historical context, they were the first people tried under the first federal anti-riot law. Five were convicted for inciting riots, all were acquitted of conspiracy, and then the other convictions were later reversed by the US Court of Appeals.

Among the many reasons this trial, and the legacy of these activists, is so important is because it was a case where the ultimate victory for political activists - their acquittal - came about because it was shown that the judge, Judge Hoffman, was politically biased against them, and the eight men played this up brilliantly.

During the trial, yippies Hoffman and Rubin sometimes used unusual tactics to draw attention to their arguments. In one instance, they showed up to court wearing judicial robes to protest Judge Julius Hoffman's decision to revoke Dellinger's bail. When the judge demanded they remove their robes, they took them off and stomped on them. Underneath, they were wearing Chicago police uniforms. Another time, Hoffman unfurled a National Liberation Front (aka "Viet Cong") flag on the defense table, and engaged in a tug-of-war over it with a court marshal who tried to remove it.

Sharman says the media tended to emphasize moments like these because they were so unusual. However, he thinks it's important to understand these incidents in the context of the judge's behavior toward the defendants.

"Even on the first day, Tom Hayden gave a fist salute to the jury and he was given a contempt of court citation," he says. "It was like nothing could be done without the judge sort of stamping on them, so that sort of encouraged them to do it, I think." By the end of the trial, the judge had charged all of the Chicago Eight as well as defense attorneys William Kunstler and Leonard Weinglass with contempt of court . [ ]
Further Viewing
There have been multiple movies about this group and this trial, both fictionalized and documentary (including an upcoming Aaron Sorkin work), from Medium Cool and Punishment Park to the TV docudrama Conspiracy: The Trial of the Chicago 8, but we'll go with the PBS documentary Chicago 10, which is available on DVD.
The Second "Rainbow Coalition"
Just a brief note about how there was later a more famous use of the "Rainbow Coalition" brand, founded by the Reverend Jesse Jackson. Some members of the first Rainbow Coalition weren't too thrilled when Jackson borrowed (or took) the name for his own grassroots, progressive organization aimed at e xpanding the Democratic party to include a new, more diverse base of younger voters, of African Americans, Latinos, women, labor union members, LGBTQ, Arab Americans, Asian Americans, Native Americans, students, peace activists, and environmentalists. Jackson's new Rainbow Coalition had its ups and downs but undeniably had an affect on 1980s electoral politics, coming to prominence when Jackson ran as a presidential candidate. Some writers, like 's Steve Cobble, think he was both an influencer and a sort of prophet for what the Democratic Party would become:

The Jackson presidential campaigns of the 1980s opened the door to Barack Obama's victory. Obama himself once told Jackson that after watching him debate in 1984, he knew it was possible for a black candidate to win.

The future President had once been a community organizer himself in Chicago.
1995 Heatwave Aftermath, Community Connections, and Climate Change Activism
As seen in the film , a confluence of terrible neglect, dangerous weather, and racism ultimately led to the tragedy of the 1995 heat wave that struck Chicago, in which an extremely high humidity and a layer of heat-retaining pollution drove the heat index up to more than 126 degrees. An unfathomable number of people died that week, 739 residents altogether - most of them elderly people of color. The film covers what happened, and why - the fallout from the disaster forced the city to learn some hard lessons.

While the city was shaken to its core enough to improve its emergency preparedness for the next natural disaster, on a macro level there began an increasing acknowledgment of the rise of an ongoing climate change crisis, while on a micro level, the need for community support and more accessible emergency services for those who need it the most.

Why did some lower-income neighborhoods make it through with less tragedy? That issue is examined in this In These Times piece on Eric Klinenberg's book Heat Wave: A Social Autopsy of Disaster in Chicago:

Much attention has been given in the last year or so to the impact of one's neighborhood on quality of life. From segregation to education to hyper-policing, we are probably more aware than ever that place matters. But Heat Wave, published over a decade ago, stretches this insight even further, showing that more than almost anything else, the neighborhood you lived in in the summer of 1995 determined your chances of survival, in ways that went far beyond income or race.

Perhaps the most well-known section of Klinenberg's book contrasts North Lawndale and South Lawndale (better known as Little Village, mentioned above), adjacent neighborhoods on the city's West Side. North Lawndale, a deeply impoverished, nearly entirely black community, faced one of the city's highest death rates during the heat wave. Little Village-a heavily Mexican immigrant area with more than its share of poverty, but also a bustling commercial district and dense network of civic organizations-had one of the lowest.

Klinenberg refers to this, and the fact that Latino neighborhoods across the city had extremely low death rates, lower even than whites in neighborhoods with higher average incomes, as the "Latino health paradox"-but three black areas on the South Side also had among the lowest rates in the city. At its best, Heat Wave cuts through the oversimplification that black or low-income neighborhoods must always be dysfunctional. Instead, what matters is the existence of a healthy neighborhood social life, enabled by neighborhood businesses, well-supported civic organizations and freedom from a debilitating fear of crime.

More and more cities are realizing that climate change-related planning and community organizing go hand in hand.

While Chicago eventually presented a genuinely forward-thinking " Climate Action Plan " in 2008, which included plans for more trees and rooftop gardens, residents further away from downtown, sometimes, change can be a long and gradual thing. Just recently, Chicago's new mayor (and first African American woman and first LGBTQ mayor) Lori Lightfoot announced a summit meant to address some of the ills that are part of the story seen in . Whether this anti-poverty summit succeeds is yet to be determined, but it reflects a connection to the legacy of those who saw what happened during the Chicago heatwave and wanted to change the very structures that led to the mass tragedy.

As Klinenberg wrote in a piece for , " People are realizing that when the floods come or the heat wave settles, neighbors are the true first responders. Next up, we'll be able to focus on an even more urgent problem: reducing our greenhouse gas emissions before there's no way to adapt."

Just as an aside, the aforementioned Pilsen area is now home to what Chicago has dubbed the "Greenest Street in America," which includes a streetscape project employing "a new roadway material named photocatalytic cement , also known as "smog-eating" cement, a compound which cleans the surface of the roadway and removes nitrogen oxide (NOx) gases from the surrounding air through a catalytic reaction driven by UV light," as well as Chicago's first permanent wind and solar-powered pedestrian lights, LED pedestrian light poles, efficient stormwater management systems, and high albedo pavement surfaces to reduce the urban heat island effect. [ Source: RentCafe ]
Further Reading
The Guardian: "' Heat islands': racist housing policies in US linked to deadly heatwave exposure "
Legacy of Activism
Eddie Bocanegra is one of the interventionists featured in the documentary The Interrupters [ stream on FRONTLINE]. Bocanegra spent 14 years in prison for murder and now works with the Chicago violence prevention organization CeaseFire, which runs the "interrupter" program. "I'll be honest," Bocanegra told NPR's Neal Conan. "During the filming, I was very ashamed revisiting some of these places and then taking somebody with me." But while taking outsiders to the scenes of his former crimes was humbling for Bocanegra, he says it also served as a fresh reminder of the positive changes he's trying to make in his old neighborhood.

The Interrupters addresses an issue plaguing Chicago in recent years: urban violence. The documentary intimately follows activists of the Chicago Project for Violence Prevention, "violence interrupters," former gang members who visit their old Chicago neighborhoods to try to stop youth violence. For those who committed acts of violence themselves in these neighborhoods, like Bocanegra, returning to "interrupt" was often a humbling (and sometimes life-threatening) experience, but they pushed through it because of how much they believed in this program.

While it does not show a world in which a high rate of gun violence has been resolved in Chicago, an issue far too complex for one group and one solution to resolve, the film does show what a few determined passionate and empathetic people can do when they are creative, inspired and fed up.

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Chicago Activism on Racial and Economic Justice

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It would be foolhardy to try to succinctly sum up the political history of one of America's most historically politically complicated cities-Chicago-in one sweeping post.

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Class Consciousness & False Consciousness as Defined by Marx

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Class Consciousness & False Consciousness as Defined by Marx

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Class consciousness and false consciousness are concepts introduced by Karl Marx that were later expanded by social theorists who came after him. Marx wrote about the theory in his book "Capital, Volume 1," and again with his frequent collaborator, Friedrich Engels, in the impassioned treatise, "Manifesto of the Communist Party." Class consciousness refers to the awareness by a social or economic class of their position and interests within the structure of the economic order and social system in which they live. In contrast, false consciousness is a perception of one's relationships to social and economic systems of an individual nature, and a failure to see oneself as a part of a class with particular class interests relative to the economic order and social system.

Marx's Theory of Class Consciousness

According to Marxist theory, class consciousness is an awareness of one's social and/or economic class relative to others, as well as an understanding of the economic rank of the class to which you belong in the context of the larger society. In addition, class consciousness involves an understanding of the defining social and economic characteristics and collective interests of your own class within the constructs of the given socio-economic and political order.

Class consciousness is a core facet of Marx's theory of class conflict, which focuses on the social, economic, and political relationships between workers and owners within a capitalist economy. The precept was developed in conjunction with his theory on how workers might overthrow the system of capitalism and then go on to create a new economic, social, and political system based on equality rather than inequality and exploitation.

The Proletariat vs. the Bourgeoisie

Marx believed that the capitalist system was rooted in class conflict-specifically, the economic exploitation of the proletariat (workers) by the bourgeoisie (those who owned and controlled production). He reasoned that the system only functioned as long as the workers did not recognize their unity as a class of laborers, their shared economic and political interests, and the power inherent in their numbers. Marx argued that when workers came to understand the totality of these factors, they would achieve class consciousness, and this, in turn, would lead to a workers' revolution that would overthrow the exploitative system of capitalism.

Hungarian social theorist Georg Lukács, who followed in the tradition of Marxist theory, expanded the concept by saying that class consciousness is an achievement that opposes individual consciousness and results from the group struggle to see the "totality" of social and economic systems.

The Problem of False Consciousness

According to Marx, before workers developed a class consciousness they were actually living with a false consciousness. (Though Marx never used the actual term, he did develop the ideas that it encompasses.) In essence, false consciousness is the opposite of class consciousness. Individualistic rather than collective in nature, it produces a view of oneself as a single entity engaged in competition with others of one's social and economic standing, rather than as part of a group with unified experiences, struggles, and interests. According to Marx and other social theorists who followed, false consciousness was dangerous because it encouraged people to think and act in ways that were counterintuitive to their economic, social, and political self-interests.

Marx saw false consciousness as a product of an unequal social system controlled by a powerful minority of elites. The false consciousness among workers, which prevented them from seeing their collective interests and power, was created by the material relations and conditions of the capitalist system, by the ideology (the dominant worldview and values) of those who control the system, and by social institutions and how they function in society.

Marx cited the phenomenon of commodity fetishism-the way capitalist production frames relationships between people (workers and owners) as relationships between things (money and products)-with playing a key role in producing false consciousness among workers. He believed that commodity fetishism served to obscure the fact that relations with regard to production within a capitalist system are actually relationships between people, and that as such, they are changeable.

Building on Marx's theory, Italian scholar, writer, and activist Antonio Gramsci expanded the ideological component of false consciousness by arguing that a process of cultural hegemony guided by those holding economic, social, and cultural power in society produced a "common sense" way of thinking that embued the status quo with legitimacy. Gramsci noted that by believing in the common sense of one's age, a person actually consents to the conditions of exploitation and domination that one experiences. This "common sense"-the ideology that produces false consciousness-is actually a misrepresentation and misunderstanding of the social relationships that define the economic, social, and political systems.

False Consciousness in a Stratified Society

An example of how cultural hegemony works to produce false consciousness-that is true both historically and today-is the belief that upward mobility is possible for all people, regardless of the circumstances of their birth, as long as they choose to dedicate themselves to education, training, and hard work. In the U.S. this belief is encapsulated in the ideal of "the American Dream." Viewing society and one's place within it based on the set of assumptions derived from "common sense" thinking results in a perception of being an individual rather than part of a collective. Economic success and failure rest squarely on the shoulders of the individual and do not take into account the totality of the social, economic, and political systems that shape our lives.

At the time Marx was writing about class consciousness, he perceived class as the relationship of people to the means of production-the owners versus the workers. While the model is still useful, we can also think about the economic stratification of our society into different classes based on income, occupation, and social status. Decades' worth of demographic data reveals that the American Dream and its promise of upward mobility is largely a myth. In truth, the economic class a person is born into is the primary determinant of how he or she will fair economically as an adult. However, as long as a person believes the myth, he or she will continue to live and operate with a false consciousness. Without a class consciousness, they will fail to recognize that the stratified economic system in which they're operating was designed to afford only the bare minimum of money to workers while funneling huge profits to the owners, executives, and financiers at the top.

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Defining Marx's Class Consciousness and False Consciousness

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Class consciousness and false consciousness are concepts introduced by Karl Marx that were later expanded by social theorists who came after him. Marx wrote about the theory in his book "Capital, Volume 1," and again with his frequent collaborator, Friedrich Engels, in the impassioned treatise, "Manifesto of the Communist Party."

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Greed trumps morality: How Slavery Became the Economic Engine of the South

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Greed trumps morality: How Slavery Became the Economic Engine of the South

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With cash crops of tobacco, cotton and sugar cane, America's southern states became the economic engine of the burgeoning nation. Their fuel of choice? Human slavery.

If the Confederacy had been a separate nation, it would have ranked as the fourth richest in the world at the start of the Civil War. The slave economy had been very good to American prosperity. By the start of the war, the South was producing 75 percent of the world's cotton and creating more millionaires per capita in the Mississippi River valley than anywhere in the nation. Enslaved workers represented Southern planters' most significant investment -and the bulk of their wealth.

An Economy Built on Slavery

Building a commercial enterprise out of the wilderness required labor and lots of it. For much of the 1600s, the American colonies operated as agricultural economies, driven largely by indentured servitude. Most workers were poor, unemployed laborers from Europe who, like others, had traveled to North America for a new life. In exchange for their work, they received food and shelter, a rudimentary education and sometimes a trade.

By 1680, the British economy improved and more jobs became available in Britain. During this time, slavery had become a morally, legally and socially acceptable institution in the colonies. As the number of European laborers coming to the colonies dwindled, enslaving Africans became a commercial necessity-and more widely acceptable.

With ideal climate and available land, property owners in the southern colonies began establishing plantation farms for cash crops like rice, tobacco and sugar cane-enterprises that required increasing amounts of labor. To meet the need, wealthy planters turned to traders, who imported ever more human chattel to the colonies, the vast majority from West Africa. As more enslaved Africans were imported and an upsurge in fertility rates expanded the "inventory," a new industry was born: the slave auction. These open markets where humans were inspected like animals and bought and sold to the highest bidder proved an increasingly lucrative enterprise. By the mid-19th century, a skilled, able-bodied enslaved person could fetch up to $2,000, although prices varied by the state.

Economic Necessity Trumps Morality

Slave labor had become so entrenched in the Southern economy that nothing-not even the belief that all men were created equal-would dislodge it. When delegates to the Constitutional Convention met in Philadelphia in the summer of 1787, they were split on the moral question of human bondage and man's inhumanity to man, but not on its economic necessity. At the time, there were nearly 700,000 enslaved people living in the United States, worth many millions in today's dollars.

When the topic of slavery arose during the deliberations over calculating political representation in Congress, the southern states of Georgia and the Carolinas demanded that each enslaved person be counted along with whites. The northern states balked, saying it gave southern states an unfair advantage. Their compromise? Delegates agreed that each enslaved person would count as three-fifths of a person, giving the South more representation, and that the slave trade would be banned 20 years hence, in 1807, a concession to Northern states that had abolished slavery several years earlier.

VIDEO: The System of American Slavery - Historians and experts examine the American system of racialized slavery and the hypocrisy it relied on to function.

Before the American Revolution, tobacco was the colonies' main cash crop, with exports of the aromatic leaf increasing from 60,000 pounds in 1622 to 1.5 million by 1639. By the end of the century, Britain was importing more than 20 million pounds of tobacco per year. But after the colonies won independence, Britain no longer favored American products and considered tobacco a competitor to crops produced elsewhere in the empire. Always a fickle commodity for growers, tobacco was beset by price fluctuations, weakness to weather changes and an exhausting of the soil's nutrients. But even as tobacco waned in importance, another cash crop showed promise: cotton.

King Cotton

Picking and cleaning cotton involved a labor-intensive process that slowed production and limited supply. In 1794, inventor Eli Whitney devised a machine that combed the cotton bolls free of their seeds in very short order. Manually, one enslaved person could pick the seeds out of 10 pounds of cotton in a day. The cotton gin, which Whitney patented in 1794, could process 100 pounds in the same time.

There was an irony in all this. Many people believed the cotton gin would reduce the need for enslaved people because the machine could supplant human labor. But in reality, the increased processing capacity accelerated demand. The more cotton processed, the more that could be exported to the mills of Great Britain and New England. And the invention of the cotton gin coincided with other developments that opened up large-scale global trade: Cargo ships were built bigger, better and easier to navigate. Powerful navies protected them against piracy. And newly invented steam engines powered these ships, as well as looms and weaving machines, which increased the capacity to produce cotton cloth.

With all these factors amping up production and distribution, the South was poised to expand its cotton-based economy. With more land needed for cultivation, the number of plantations expanded in the South and moved west into new territory. Production exploded: Between 1801 and 1835 alone, the U.S. cotton exports grew from 100,000 bales to more than a million, comprising half of all U.S. exports. The upshot: As cotton became the backbone of the Southern economy, slavery drove impressive profits.

The benefits of cotton produced by enslaved workers extended to industries beyond the South. In the North and Great Britain, cotton mills hummed, while the financial and shipping industries also saw gains. Banks in New York and London provided capital to new and expanding plantations for purchasing both land and enslaved workers. As a result, enslaved people became a legal form of property that could be used as collateral in business transactions or to pay off outstanding debt. Enslaved people comprised a sizable portion of a planter's property holdings, becoming a source of tax revenue for state and local governments. A sort of sales tax was also levied on enslaved worker transactions.

Steadily, a near-feudal society emerged in the South. At the top was the aristocratic landowning elite, who wielded much of the economic and political power. Their plantations spanned upward of a thousand acres, controlling hundreds-and, in some cases, thousands-of enslaved people. A culture of gentility and high-minded codes of honor emerged.

Below the elite class were the small planters who owned a handful of enslaved people. These farmers were self-made and fiercely independent. Small farmers without enslaved workers and landless whites were at the bottom, making up three-quarters of the white population-and dreaming of the day when they, too, might own enslaved people.

No matter how wide the gap between rich and poor, class tensions among whites were eased by the belief they all belonged to the "superior race." Many convinced themselves they were actually doing God's work taking care of what they believed was an inferior people.

Slavery, Wealth and the Confederacy

By the start of the 19th century, slavery and cotton had become essential to the continued growth of America's economy. However, by 1820, political and economic pressure on the South placed a wedge between the North and South. The Abolitionist movement, which called for an elimination of the institution of slavery, gained influence in Congress. Tariff taxes were passed to help Northern businesses fend off foreign competition but hurt Southern consumers. By the 1850s, many Southerners believed a peaceful secession from the Union was the only path forward.

When considering leaving the Union, Southerners knew the North had an overwhelming advantage over the South in population, industrial output and wealth. Yet, the booming cotton economy most Southerners were optimistic about their future. As one state after another left the Union in 1860 and 1861, many Southerners believed they were doing the right thing to preserve their independence and their property.

To raise funds, Confederate leaders sold bonds for gold coin, which was in circulation at the time. The Confederate currency was inherently weak and became weaker with each printing. In time, the paper money lost 90 percent of its buying power. What gold and silver existed, was taken out of circulation and hoarded by the government and private citizens.

What Happened to the Gold?

By war's end, the Confederacy had little usable capital to continue the fight. In the conflict's waning days, it is believed that Confederate officials stashed away millions of dollars' worth of gold, most in Richmond, Virginia. As the Union Army entered the Confederate capital in 1865, Confederate President Jefferson Davis and millions of dollars of gold escaped to Georgia. What happened after that is disputed, the subject of many myths and legends.
WATCH: Confederate Gold on HISTORY Vault

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How Slavery Became the Economic Engine of the South

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With cash crops of tobacco, cotton and sugar cane, America's southern states became the economic engine of the burgeoning nation. Their fuel of choice? Human slavery. If the Confederacy had been a separate nation, it would have ranked as the fourth richest in the world at the start of the Civil War.