30 Million Small Businesses: The Army President Obama Has Yet To Deploy


Update: We interviewed Cedric Muhammad on Hard Knock Radio about the economy and how its looking under what many see as a New World Order of sorts. He expounds up on his article and gives some keen breakdowns..Here’s a link to the archived show


30 Million Small Businesses: The Army President Obama Has Yet To Deploy

by Cedrick Muhammad

President Barrack Obama’s decision to deploy more troops to Afghanistan should be a reminder and not a distraction that the country is involved in a two-front war. Not only one where the battlefields are Iraq and Afghanistan, but also a domestic economic war where saving an ailing banking system, is one front, while the struggle of small businesses to grow and expand is the other.

So far, that second war is only being waged on one battlefield.

It may be a generalization but not an oversimplification to say that when push came to shove, during and after the Financial Panic of 2008, the United States government – both Congress and two Presidential administrations – decided the interests of Wall Street and only a small portion of America’s 10,000 commercial banks, along with a handful of auto companies, were more important than the needs of approximately 30,000,000 small businesses [There were 6.1 million employer and 23.1 million nonemployer firms (a nonemployer firm is defined as one that has no paid employees, has annual business receipts of $1,000 or more and is subject to federal income taxes.) in the U.S. in 2008 according to Statistics of U.S. Businesses (SUSB) data from the U.S. Census Bureau].

The commercial banking sector is important – especially those smaller and community-oriented institutions that have been an after-thought in the plans of both Presidents Obama and George W. Bush. And if money is the lifeblood of a nation, then the financial system is somewhat like a circulatory system moving capital and credit wherever it is needed throughout the economic body.

This crisis was a financial one for sure, and its roots can be found in four areas.

First, a fractional reserve banking system which allows banks to lend out (or extend credit) several times the actual amount of money they actually have on deposit.

Second, a fiat currency (money with no sound backing) created gradually in three stages – initially when the Federal Reserve was born in 1913 giving a private central bank control over the issuance of America’s currency, a responsibility the U.S. constitution reserved for Congress. And then, when the gold standard was ended in two stages – in 1933 under Franklin Delano Roosevelt and 1971under president Richard Nixon.

Third, the out of control growth of a derivatives market initially built upon the legitimate need of farmers and businesses to insure themselves from disasters and unpredictable circumstances (like storms and poor crops) which grew to dwarf the real economy (the physical and digital goods and services that we need to survive and want to enjoy) in size. It should be noted that the first major derivatives market was in foreign currency and it grew out of the instability of a world where the dollar was no longer on the gold standard and investors, entrepreneurs, farmers and corporations had to guess and gamble each day over what the world’s currencies were worth.

Fourth, the birth of the modern securitization market in 1970s, started by the Government National Mortgage Association (GNMA) or ‘Ginnie Mae’ which allowed private institutions to gather mortgages extended to different customers and owned by different banks into large bundles to be resold to other institutions – like pension funds and investment banks. With the help of institutions like Salomon Brothers this practice grew to the size of trillions of dollars and saw bundles as large as 5,000 mortgages and up, sold all over the world. By 2009 loans of all kinds – mortgages, bank, student, credit card and business – were being made not because individuals and entities qualified for them but because banks could make more money off of securitizing and re-selling them to Wall Street investors and institutions and governments all over the world. When these loans could not be repaid the whole house of cards tumbled.

For the most part, first under President Bush, and afterward President Obama very little has been done to effectively address these four fundamental aspects of the financial crisis. When you combine this reality with a national debt of $12 trillion (around $60 trillion when you add in the money owed for Social Security and Medicare payments) it is not hard to see the hand-writing on the wall – the American economy is headed for a painful day of reckoning.

But there was an equally important problem to be solved, aside from the financial one. In fact, it was already in effect and looming on the horizon before the Panic of 2007-2008. It was the challenge of how the American economy was going to transition through the era of globalization that was eroding its foundation due to two practices – offshoring and outsourcing. Offshoring is the decision of a company to relocate an entire business process from one country to another and outsourcing is the subcontracting of a service or business process to a third party.

Former Federal Reserve Governor and Princeton University Professor Alan Blinder, before the recession, estimated that 30 million to 40 million American jobs have the potential to be offshored. These include such professions as tax accounting, film and video editors, computer programming, bookkeepers, architects, lawyers specializing in contract law, mathematicians, graphic designers, financial analysts, actuaries, microbiologists, and even economists.

And who was on the front lines of this battle best positioned to win it and create the jobs that will replace those being lost, but also suffering the greatest casualties?

Without question, it is the country’s 30 million small business owners.

According to the Small Business Administration (SBA)’s 2009 “Small Business Economy: A Report To The President,” ‘…since the mid-1990s, small businesses have generally created 60 to 80 percent of the net new employment, but in 2008 there was a net loss of 3.1 million jobs. While it is not yet possible to know how many were lost in smaller businesses, it is likely they were a significant share of the losses. In the first three quarters, the United States lost 1,695,00 jobs, of which 60 percent were in small businesses.’

And what has been the official policy response to this recognition?

Virtually none of the over $700 billion Troubled Asset Relief Program (TARP) under President Bush went to small businesses (including most of the nation’s 8,000 smaller community banks) and while President Obama signed the $787 billion American Recovery and Reinvestment Act, funding to the U.S. Small Business Administration (SBA) was increased by only $730 million. An SBA plan designed to generate $10 billion in loans to small businesses has been crawling for months.

When one considers other steps taken by the administration of President Obama including putting $2 trillion on the line in order to jump-start the previously mentioned securitization market (through the Federal Reserve-engineered Troubled Asset Relief Facility or TALF), it can be argued that while the U.S. government has put an estimated $4 trillion on the line to help revive the commercial banking sector and securitization markets, its best efforts to help small business may have not even reached $10 billion.

To make matters worse, the economic pain is not being distributed evenly across racial lines.

While the overall unemployment rate in the country was 10.2% in October it was 15.7% for Black Americans, with Black males 20 and over at an unemployment rate of 17.1% and Black teenagers of both sexes unemployed at the rate of 41.3%. This is all the more troubling when one considers that prior to the recession, it had already been determined that Black male unemployment in cities like New York and Milwaukee was over 50%.

With all of this doom and gloom what should President Obama do?

First, he should be applauded for hosting this week’s Jobs Summit.

But summits, meetings and conferences are only as good as their agenda, the quality of the dialogue and debate, and the follow-through on the best ideas, policies and decisions that emerge.

To that end here is a nine-point platform for consideration at the Jobs Summit that could jumpstart the American economy from the ground up:

1) Cut the Payroll Tax. In his November 18, 2009 Wall Street Journal op-ed, Michael J. Boskin makes the case, “…to evaluate the stimulus properly we should consider not just what we got for the $787 billion cost but the effects of alternative policies that might have been enacted. My Stanford colleague Pete Klenow and Rochester economist Mark Bils estimated that cutting the payroll tax by six percentage points (of the 12.4% Social Security component) would, under standard assumptions, increase employment by three million to four million workers—an amount equal to all the job losses since the stimulus was passed. The payroll tax cut would have reduced firms’ costs by roughly the same amount as from the entire decline in employment. It would have cost less than half as much as the stimulus bill, gotten far more income into paychecks quickly and, most importantly, greatly reduced incentives for firms to lay off workers. In fact, it would have created incentives to hire. Even using the administration’s claims of one million jobs ‘created or saved,’ the stimulus program passed in early February is millions of jobs short of what a cheaper payroll tax suspension would have delivered.”

2) Enact Job creation tax credits (as proposed by the Economic Policy Institute: http://www.epi.org/publications/entry/bp248/).

3) General capital gains tax rate reduction to 10%, indexed for inflation and made permanent.

4) Reduce the holding period to qualify for capital gains tax elimination in distressed rural and urban areas from 5 years to 6 months. This will encourage investors to make investments in struggling inner cities because they know they don’t have to wait 5 years to see a return. Entrepreneurs don’t want patient capital (what makes 5 years a magic number for the government anyway – especially since most small businesses have failed by then?) as much as they want smart capital.

5) Expand of the number of Empowerment Zones and Renewal Communities that receive incentives for economic development in distressed communities. If, since the financial crisis, the rest of the country has been receiving incentives that were previously reserved for these areas, something must be done to maintain their comparative advantage.

6) Increase incentives and worker tax credits for any business which hires a previously incarcerated person. This gets at the core of the unemployment problem (aggravated by state laws that make it illegal for ex-offenders to be employed in certain jobs) in the poorest areas, and in communities where the social fabric is the frailest.

7) Complete capital gains tax elimination for investment clubs which invest in businesses with less than 5 paid employees, and an increase of the limit from 99 persons to 250 on the size of an investment club before it falls under SEC regulations. This may inspire the merger of several successful existing clubs – increasing their scale and reach – and fill the void in areas of the economy where venture capital and private equity are unavailable or unwilling to invest (the government’s SSBIC program to bring venture capital into the Black economy has been a failure, as Senator John Kerry has so duly highlighted, and which I discuss in my book, The Entrepreneurial Secret). If something is not done to move these areas away from debt-dependency and toward equity capital, a mass of small businesses are set to go under as the government fails to re-start lending and unfreeze credit, even in programs it sponsors through the SBA.

8) Reduce combined state (of course with the assistance of Governors and State legislatures here) and federal corporate tax rates. Perhaps the problem with the corporate tax is that only an elite group of corporations has the resources to avoid paying it. The motivation here is not only to produce shareholder earnings, capital investment, higher wages, and lower prices for goods and services but also to increase the attractiveness of the limited liability company to sole proprietorships. Utilizing the corporate legal form of business will allow them to raise capital more efficiently (only 10% of Black businesses utilize the C or S corporate form of business), share and spread risk, and develop a managerial hierarchy (about 90% of these businesses do not have more than a single paid employee).

9) Reduce regulations that hamper entrepreneurship and create a burden on cash strapped and employee-thin small businesses. As John Berlau and William Yeatman wrote recently in a Washington Times op-ed, ‘Solutions: How To Reduce Unemployment’: “Congress also should pare back job-killing mandates like those embedded in the Sarbanes-Oxley Act of 2002, which was rushed through Congress in the wake of the Enron and WorldCom scandals. This law has showered business with massive accounting procedures that may have created jobs for auditors — the law is often called the Accountants Full Employment Act — but discouraged business expansion by making it so costly for a firm to raise money by going public.” Sure enough, according to the Small Business and Entrepreneurship Council, the Small Business Administration (SBA)’s Office of Advocacy has noted, “Very small firms with fewer than 20 employees annually spend 45 percent more per employee than larger firms to comply with federal regulations. These very small firms spend four and a half times as much per employee to comply with environmental regulations and 67 percent more per employee on tax compliance than their larger counterparts.”

The above proposal is an eclectic mix of policies favored by some on the Left, Right and Center, members of both political parties and Independents. It is a framework that would invite creative compromise and deal-making – always a function of the political processs. What is required to help this economy can only be advanced with this kind of electoral coalition and a wide cross section of support from others, which the skillful and gifted President Obama can uniquely convene, organize and build.

Paul Ryan

If President Obama could enlist the support of a leading pro economic growth Republican like Congressman Paul Ryan (who I know understands the economic challenge from past discussion with him: http://www.blackelectorate.com/articles.asp?ID=591) and a liberal, business conscious Democrat like Senator Charles Schumer (surprisingly the strongest political voice on the crisis of Black male unemployment: http://jec.senate.gov/archive/Hearings/03.08.07BlackMaleUnemploymentHearing.htm) , and have the initiative spearheaded by the rare embodiment of compassion for the poor and understanding of the rich – the brilliant and nimble Jared Bernstein (Vice-President Biden’s Chief Economist and co-author of the penetrating ‘The Benefits Of Full Employment’: http://www.epi.org/page/-/old/books/full_employment-intro.pdf) – the country would find if not these, then other realistic and radical solutions that the time demands.

With these policies – the nation’s army of small businesses will have more of the weaponry, ammunition, and moral support they need to do what they do best – innovate, and create jobs.

It should be noted that there are one and not two wars underway that will determine the future of America. What is more obvious are the war underway in Afghanistan and Iraq. What is less obvious is that the battle to save the American economy has a second front.

An army – 30,000,000 million strong – awaits its orders from the Commander In Chief.

Cedric Muhammad is a business consultant, political strategist, and monetary economist. He is author of the book, The Entrepreneurial Secret: To Starting a Business Without A Bank Loan, Collateral Or Revenue (http://theEsecret.com/). His talk show, ‘The Cedric Muhammad and Black Coffee Program’ can be viewed every Wednesday from 12 to 5 PM EST (USA) at: http://www.cedricmuhammad.com/media/. He can be contacted via e-mail at: cedric(at)cmcap.com

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Barack Obama: Diasporic Personality, Cultural Entrepreneur, American Emperor



Barack Obama: Diasporic Personality, Cultural Entrepreneur, American Emperor

by Cedrick Muhammad 

The Following Are Remarks Given by Cedric Muhammad At George Mason University During The ‘Fall For The Book’ Festival On September 22, 2009 while participating in a Panel Discussion: “Understanding Obama: Three Views”

[The material and concepts of this speech are lightly drawn from the forthcoming book, ‘The Entrepreneurial Secret’ by Cedric Muhammad, available October 7th at BlackElectorate.com, Amazon.com and Barnesandnoble.com]

cedricmuhammad2-225Barack Obama arose at a time when Black America was somewhere in between a Cult of Personality and a Cult Of Ideology, in an era where partisan attachment to the Democratic Party somehow became equated with grassroots activism and where independent institution building as a priority – a hallmark of the Black power movement had waned [in no small part due to the success of the Counter Intelligence Program (COINTELPRO) of the Federal Bureau of Investigation (FBI)]. Community development, for many, has now come to take on the characteristics of personal transformation, with a focus on quality of life issues and not a raw or rigid form of Black nationalism. As an Ivy-league educated lawyer, community organizer, and member of the Black Church, Barack Obama maneuvered through the power centers of Civil Rights, Black Power, middle class-professionalism, civic participation, and the prophetic voice with relative success and without being absorbed by any of them.

The result: he is claimed by all because he is first and foremost a Diasporic Persona and a Cultural Entrepreneur.

What is that you ask?

ObamaNAACP-400He – Barrack Hussein Obama – is that rare individual skilled in navigating the waters and traveling through that space shared by an empire, a homeland, and a diaspora. He lives in and comes to power in the American empire (and its two dominant and separate societies: Black and White) while embracing his relationship to both an African and Islamic diaspora. Through emigration, dispersion, bloodline, creed or belief, the Disaporic personality and cultural entrepreneur have a connection to a homeland or broader civilization outside of the country in which they now live. By nature, he internationalizes the individuals, events, circumstances, and institutions that he engages, as he is claimed simultaneously by different communities: African, Muslim, Southeast Asian, Hawaiian, White American; Black American etc…

MuhammadAliTo understand how suddenly one can become a Diasporic personality, it is helpful to remember Muhammad Ali, for example. When the Honorable Elijah Muhammad gave him that name in place of ‘Cassius Clay,’ a Black American born in the American South, among an immobile people, who were denied freedom, justice, and equality, suddenly became an international figure upon whom an entire world (including the very wicked) would eventually project their hopes, aspirations, and fears.

Who is Barack Obama, the diasporic personality and cultural entrepreneur?

He’s mobile, cosmopolitan, sophisticated and a risk-taker. He embraces change – both technological and demographic. He deftly moves in and out of different perspectives and civilizations, which by the way dovetails nicely with the Aloha Spirit (which he absorbed in Hawaii, where he did middle and high school). His socialization skills and ability to adapt to different cultures is uncanny. But this also makes him the ultimate challenge to rigid forms of identity (tribe, race, religion, ethnicity, political ideology, partisanship, and nationalism). He is foremost a universalist. He resists and pushes back any time he is pigeon-holed or stereotyped.

Barack Obama is no ordinary personality or entrepreneur, because of his day job. As president of the United States, he is the representative of the American empire, which makes him something like the captain of the Titanic. He is in a situation where radical change is necessary but where only moderate and incremental improvement – gradual change – is tolerated (and barely that) by a two party system that manages the political process. So he has the power and baggage of representing an Empire while he carries the power and baggage of a persona and personality tied to several Diasporas. It is clear that much of the controversy around Barack Obama comes not from his words or policies but rather from the confusion and discomfort that comes from not knowing or not being sure on whose behalf, interest and perspective he speaks.

There are six speeches that make all of the above clear:

1) His speech at the Democratic Convention in July 26 of 2004 from Boston, Mass. (significant because he introduced his Diasporic persona and connected it to the American dream and empire).

2) His speech in Springfield, Massachusetts announcing his candidacy for President in February 10th 2007 (significant because he bypassed associating himself with the, at that time, influential ‘State of Black America’ forum convened by Tavis Smiley).

3) His speech on race-relations in America made in Philadelphia, Pennsylvania on March 18, 2009 (significant because he did not disown the Black American community in response to controversy stemming from media coverage of a rhetorical challenge to the American empire, made by his Pastor).

4) His speech to the Muslim World, delivered on June 4, 2009 – significant because he acknowledged the Islamic Diaspora and critiqued the Western empire’s (with America as its titular head) relationship to it. The two civilizations have been in an alternating state of conflict and cooperation in a unique way since the 15th century, a time period which brought the West into contact with a pan-Islamic community crossing borders and oceans (Portuguese imperialism meets the Islamic Diaspora in the Indian Ocean).

5) His speech from Accra, Ghana, July 11, 2009 (significant because it suggests that Obama will not necessarily use his Diasporic persona on behalf of real change in the foreign policy of the American empire). Some Africans are offended by his tone and even Kenyans are insulted by the manner in which President Obama’s chief foreign representative – Secretary of State Hillary Clinton – lectured them on governance. Prime Minister Raila Odinga even spoke out against this saying America has a double standard – chastising Kenya but not Saudi Arabia or Egypt. Young Africans continue to be inspired by President Obama (whom they claim not as ‘Black’ or ‘American’ but as ‘African’) while they dislike the attitude and policies of his government toward Africa. Many Africans, based in America, express support for the tone of President Obama toward leaders back home, whom they find corrupt and believe should be removed from power.

6) President Obama’s speech to the NAACP in New York on July 16, 2009 (significant because he gave an individual empowerment, and social responsibility speech before the nation’s oldest civil rights organization). He spoke to self-improvement and community development more than pending legislation, executive orders, or court decisions in response to historical discrimination. A vocal minority of Black Americans find the speech paternalistic and condescending, while others view it as badly needed truth-telling and a sign that a changing of the guard has taken place within Black American leadership where appeals to government will be less popular among the young. The debate over whether President Obama is fundamentally a political progressive or a cultural conservative where ‘his own people’ are concerned continues.

Franklin D rooseveltAs President, Barack Obama makes everyone uncomfortable because he is uncomfortable operating inside of the confines of narrow ideology and partisanship. Therefore, pragmatism and triangulation (where he takes ideas from, or executes policies more often favored by his political opponents) are his modus operandi, strategy, and tactics. He throws down the gauntlet and challenge to almost every interest group, lobby or community. It isn’t enough that he likes, agrees, and knows you. To get his attention you have to speak the language of power. It is best represented by President Franklin Delano Roosevelt (whose history Obama studies carefully) who told Civil Rights Leader A. Phillip Randolph in the 1940s that while he agreed with his agenda, intellectual agreement was not enough for him to change policy. Reportedly, Roosevelt told Randolph that he and the civil rights leaders would have to make him change policy. Presidents must be forced to do what is right, not just told.

I believe that in so many words, President Obama is ‘telling’ Blacks, Progressives and Liberals – his ‘base’ who may be suspicious of him – that they will have to force him to do what they want. His stance will either expose their current inability to mobilize people or influence the public debate, or it will inspire them to step their game up and be more effective.

He can get away with things that no other Democrat can, while he can never rise above a certain level of Republican support because of what he represents, and the fear he provokes in the minds of White Supremacists on the Right (they exist on the Left too, by the way). His unmistakable effort to go after ‘waste and fraud’ in social safety net programs like unemployment insurance, Medicaid and social security would never be accepted by a Republican president (“If only a Republican like Richard Nixon could be the first president to go to China, only a Democrat like Mr. Obama could persuade Democrats to cut payments for unemployment and disability, said Isabel Sawhill, co-director of the Center on Children and Families at the Brookings Institution.” We read this in a March 2009 Wall Street Journal article).

Yes, Bill Clinton got away with doing things that President Reagan and both Bushes could not (Crime Bill, Welfare Reform, talk of ‘mending’ Affirmative Action) and Barack Obama can get away with things Bill Clinton couldn’t.

For better and worse, this Cultural Entrepreneur, unlike Democratic-Blacks (a new hyphenated identity that perhaps should be added to the Census categories) understands that party loyalty does not mean being a parrot or slave to ideology (I didn’t forget about you sycophants on the Right either).

And now, in the controversy over the Governor’s race in New York, only Barack Obama – the first Black president – could get away with discouraging New York’s first Black governor from seeking office again. Apparently ‘Yes we can!’ also means ‘No you can’t.’ He does all of this while distancing himself from remarks made by former President Jimmy Carter who says racism is obviously a factor in the opposition of a certain segment of Obama’s opponents. Just when you think you have figured him out and can predict his behavior, he changes, adjusts and absorbs resistance because only two things matter to a Diasporic personality and cultural entrepreneur – getting a deal done in a diverse environment, and staying ahead of the curve.

He moves like a lawyer and a businessman. He takes the long view. He understands that in the etiquette of business and society subtlety rules and things like language, tone, and style are substance. On the September 13th edition of 60 Minutes he said, “One of the things that I’m trying to figure out is how can we make sure that civility is interesting…Hopefully I will be a good model for the fact that you don’t have to yell and holler to make your point and to be passionate about your position.’

Sounds like Negotiating and How To Make Moves 101. Is it any wonder that he is so popular among the most enthusiastic fans of mainstream Hip-Hop music?

Perhaps they – the young and the poor – understand that being a Diasporic Personality and Cultural Entrepreneur has nothing to do with elections, talking points, or political chatter, and everything to do with building personal power and leveraging it in pursuit of what you want in life, business, and on behalf of your community (or communities).

In closing, President Barack Obama’s greatest contribution is cultural, not political. He models behavior and attitudes in Black America that had been previously marginalized by the commercial projection of the poorest and worst kind of behavior – married life (While in Kenya in March I actually had a Sister from Zimbabwe tell me she did not know that there were hardly any married Black couples until she saw Barack and Michelle and that her view of Black American men came from the gangster rap music of the 1980s and 90s), high academic performance, polish and cultural refinement, and social etiquette do matter, after all.

And he does it all without entirely divorcing himself from a people and culture that has been most victimized and exploited.

Like him or not, for most, he is a Role-Model-In Chief, even Power Broker-In-Chief, more than the Commander-in-Chief.

The question now, for Barack Obama, Diasporic Personality and Cultural Entrepreneur, is what are the costs of representing the American empire?

Perhaps the question is the same for the rest of the radically hip and self-enlightened, living in the Disapora.

Remarks Given By Cedric Muhammad At The George Mason University ‘Fall For The Book’ Festival (September 22, 2009)

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Rap COINTELPRO XIII: MTV’s “Hip-Hop Cops: Is The NYPD At War With Hip-Hop?”

Cedric Muhammad

Cedric Muhammad

MTV should be commended for its recent look at something that we have been writing about for a couple of years – the surveillance of Hip-Hop artists by law enforcement. But the series doesn’t go far enough.

It has been a peculiarity, at least in our view, that the subject of law enforcement and Hip-Hop artists has been primarily reviewed from the prism of two major police departments – the Los Angeles Police Department (LAPD) and the New York Police Department (NYPD). Certainly there are logical and natural reasons for this. And for sure, any investigation of this subject should include those law enforcement officers and departments who have the most contact with artists at the local level. But the fact that the Notorious B.I.G.’s car was being followed by the FBI and ATF agents at the moment he was shot; the fact that the DEA was on the point of a major investigation of Rap-A-Lot Records and Hip-Hop legend Scarface (Read Our “Hip-Hop Fridays: Rap COINTELPRO Part IV: Congress Holds Hearings On DEA Rap-A-Lot Investigation”); the fact that the FBI and IRS were investigating Death Row Records at the height of the record label’s popularity and when Tupac Shakur was murdered; the fact that the FBI and IRS have been watching Puffy (P.Diddy) and Bad Boy Records’ business activities for at least 8 years; the fact that a government informant infiltrated the Wu-Tang Clan over two years ago and the ATF was offering convicts less time if they would implicate the group in gun-running (Read Our “Hip-Hop Fridays: Rap COINTELPRO Part II”); and the fact that federal law enforcement agencies are investigating the Murder Inc. record label right now and raided its offices recently should make it clear as to why we are not satisfied with any investigative report that makes the NYPD and/or the LAPD the end-all or be-all.

The problem isn’t MTV. They actually did a service and credible job exploring the context for how all of this mischief-making is possible and how the need for Hip-Hop-centered investigations is “plausible”, due to the cultural and socio-economic conditions and deleterious aspects of the Hip-Hop industry.

Russell Simmons

Russell Simmons

The problem is that for a variety of reasons activists, journalists, artists and executives can’t seem to accept the premise that what is happening is a continuation of COINTELPRO and not profiling or harassment. Many know that what is happening goes way above the power and influence of any local police department. But they are afraid to follow the trail all the way up. This was an important part of my recent conversation with Russell Simmons. Russell’s reticence in tackling the issue is understandable but until the Hip-Hop community learns the lessons of history and shakes its fear and state of denial, it is doomed to repeat the mistakes that others made before them in ignorance. Once the reality of RapCOINTELPRO is accepted for what it is then the appropriate political leaders can be pressured to hold hearings, write letters and obtain the files that would show beyond a shadow of a doubt that the United States Government, partly through the NYPD and LAPD is absolutely at war with Hip-Hop. And the rest of the members of civil society can confer on what actions should be taken. We have a lot of work to do in only a little bit of time.

The War on Street Gangs has been merged with a War On Drugs which has been merged with a War On Terrorism which will intensify with the war in Iraq. In all of this Hip-Hop will be framed as a primary force of sedition in America.

This is definitely one issue that separates the men and women from the boys and girls.

Cedric Muhammad
February 21, 2003

photo credit: Panther 1619

photo credit: Panther 1619

Here is the first portion of MTV’s report followed by a link to the subsequent portion(s) of the series:

One of the most hotly debated topics in the hip-hop world is the New York Police Department’s reported clampdown on the rap industry.

In the wake of high-profile investigations into the slaying of Jam Master Jay, the joint FBI-NYPD raids on the offices of Murder Inc., and the recent arrests of 50 Cent and Fabolous on weapons charges, the hip-hop community is abuzz with talk of an elite “hip-hop squad” or “rap task force” whose duties include tailing rappers’ vehicles and even monitoring their lyrics.

During a recent stint as a guest DJ on New York’s Hot 97, 50 Cent tauntingly shouted out the “hip-hop cops” that he claims follow him everywhere. But does such a task force targeting rappers really exist?

No, insists the NYPD.

“There is no such thing,” said Detective Walter Burns, a senior NYPD spokesperson. “We have no hip-hop task force, no hip-hop unit, no hip-hop patrol.”

Police point out that when they do create task forces, like the Terrorism Task Force or the Hate Crimes Task Force, one of their purposes is to let the public know they’re making an extra effort to stop crime. “If we did have a hip-hop task force,” another NYPD spokesperson said, “we wouldn’t deny it. We’d want to tell you that it exists.”

But many artists aren’t buying it.

“It’s definitely a task force,” Fat Joe said. “You go to hip-hop spots now and they ain’t just your normal walking-the-beat cops. There’s cops out there in undercover cars like they know something we don’t know. Like bin Laden’s in the club, B.”

“It’s just a thing where it’s targeting hip-hop,” Fabolous said. “I don’t think you should target something. If it’s a problem, you go handle the problem, that’s what cops are for. They are there to protect and serve. They’re not there to make a problem.”

Hip-hop Web sites liken the current situation to the once-secret FBI surveillance of African-American leaders and civil rights activists in the 1960s. Many rappers claim to have first-hand knowledge of the elite task force’s existence, and some say they’ve even seen confidential NYPD Intelligence Division documents containing information on rappers’ places of residence and vehicles.

“It’s called the Entertainment Task Force,” Keith Murray said. “They watch you as far as on the streets, and they watch you as far as monetary operations, taxes, who’s paying who what, where you getting money from. They got they scope on rappers right now.”

Pressed on his source for the existence of this task force, Murray said, “I’ve read numerous things on it and I’m seeing it come to fruition.”

The story of a hip-hop unit within the NYPD has been widely disseminated by major news organizations, and such reports have led to accusations of “rapper profiling” and civil rights infringement. But police spokespeople as well as other sources within the force say it’s simply not true. “We don’t target rappers,” Burns said. “The NYPD investigates crimes.”

Perhaps it’s a sense of self-mythologizing – all the Italian-gangster wannabes populating the ranks of the hip-hop game – that leads some rappers to feel they’re constantly under surveillance. Just how did they think law enforcement was going to react to artists who take on the surnames of crime kingpins like Gotti and Capone and Gambino?

Lieutenant Tony Mazziotti, a retired 28-year veteran who oversaw investigations of actual gangsters – major racketeers in the Gambino and Genovese crime families – said: “With the rappers, I think it’s this sense that, ‘Hey, we’re worthy of being investigated. That means we’re for real.’ ”

But what’s actually for real, one retired NYPD detective insists, is that there is a rap-related unit within the police force. What’s more, he said, he’s the cop who created it.

“I was the one who started the whole thing,” Derrick Parker revealed to MTV News. “The unit was created in ’98. … When Biggie was buried here in New York, there was a lot of concern, there were a lot of threats made. The chief [of the department] wanted me to run this entire investigation for him and to report to him.”

Parker said that for more than four years he gathered intelligence on the rap community, compiled files, went to nightclubs and interviewed rappers who were jammed up in criminal cases. Pressed on the exact name for the entity he created, Parker said, “It’s not called the hip-hop unit, it’s really just under Gang Intel.”


Cedric Muhammad

Friday, February 21, 2003