482 The Great Transition Lessons of History and Hope

This show is sponsored by FIS. Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King.

And I’m Jason Henricks. Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns, and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future.

I’m J.P. Nichols, and this is Breaking Banks. Welcome back to Breaking Banks. Joining me all the way from Asia.

I’m guessing you’re in Asia, E.D. Where are you right now? Right now, today in Beijing, Brett. Ah, ni hao, ni hao. Emmanuel Daniel is the founder of The Asian Banker.

He is a longtime friend. We’ve been working, we’ve known each other for 23 years, E.D. You realize? Yeah, and as E.D. was saying just before we got started on the call, when I was actually on my book tour for my very first book, Bank 2.0, I stayed at E.D.’s house, and he got the second copy off the printing press. The first went to my dad.

And then we launched the book at Asian Banker at the summit and sold out. This was in April, 2011. So E.D., now it’s time I can return the favor.

You know, when I published my book, you’re like one of the first people that I had to send a signed copy to. And by this time, we were both in different continents and doing different things. And so much water has passed under the bridge for us.

So it’s amazing. And I look up to you. I look up to what you’ve achieved.

When you published your first book, I already had it in my mind to write my book. But it was nearly 12, 13 years later. I’m glad I sort of broke the ground for a lot of writers in this respect.

It was tough. The first book, it was published out of Singapore, actually, with Marshall Cavendish. Because Wiley had passed on it.

And then they represented me on the subsequent books in the U.S., at least. But Wiley passed on it initially. And Townsend, the guy, was at Marshall.

He said to me, yeah, we’re not sure if this is even going to work. So we’ll do a print run for a couple of thousand copies. And if we sell a thousand, then we consider it a breakeven success.

And of course, it went off. And within six months, I was on the fifth print run of the book. And it had been a bestseller in 19 countries or something.

It just changed my life. But even I have to tell you, my ex would be like, she’s like, yeah, you’re not going to make any money out of the book. It’s like, maybe you should get a job as a bus driver.

Anyway, so tell me about the great transition in your book. And because, as you say, you’ve been working on germinating this for a long time. Tell me about that process that brought you here to the book.

You know, Brett, when you wrote Breaking Banks, you know, 2.0, right? Bank 2.0, yeah, Bank 2 was the first, yeah. Breaking Banks 2013, yeah. Yeah, Bank 2.0. And I still have that signed copy that you gave me.

And when you wrote it, you wrote it for a banking audience. But by the time, and that, you know, that was quite straightforward. But as I started writing my book, I realized that the decentralized finance world was germinating.

It was coming around. And I had to struggle in bringing the two worlds together, the traditional bankers and the decentralized players, who even to this day are more like disruptors sitting on the sideline of the industry. And I had to spend a lot of time thinking, how would banking itself make the transition into the new technologies that were coming through? A lot of what you had to say in your book was that, guys, branches don’t work.

We need to go digital, you know, that the customer doesn’t want to be in the branch, you know, and you had to preach that like a priest almost. It’s only now that people are saying you were right, you know, but that’s like 10 years later. That’s why, I guess that’s why I’m a futurist, right? I guess futurists are like that, you’re a little ahead of your time and you just have to keep preaching until it becomes a truism and then warm up to you.

So maybe I’m struggling with the same issues, except that things have got even more complex in finance. And in order to make my point, I not only have to deal with the business of banking, but also the transitions that technology itself is making. So the book, you know, if you ask who the intended audience should be, it’s traditional bankers, it’s DeFi players and the platform players today.

So what I’m saying in the book is that the platform industry as we know it today, which is young, you know, Facebook was 2007 and Google 2003. And, you know, in that period, and here I am in Beijing, where Alipay was 2011, you know, so, and these are still growing industries, but I’m saying that it’s going to start fragmenting into personalization. In other words, the power of the relationship is moving towards the customer, the user, you know, the end user.

And the technology is what’s making that journey possible. And then within that transition, I had to reimagine what finance is really about. And as I was writing the book, I was learning and I was coming to terms with the DNA of finance, the things that makes it work, that will be carried into the digital world.

So one of the things I’m saying is that, if you want to understand how finance should look like, look at the balance sheet of the business, not at the technology itself. So recently, for example, when you had the, you know, the buy now, pay later frenzy, and, you know, a lot of them around the world, Australia and Sweden and the US getting off the ground very strongly. I looked at it and I said, you know what, the balance sheet of the business doesn’t show that it’s going to work.

Because number one, it’s, you know, carry over from what the credit card players were doing. Number two, you’re only as good as how cheap your funds are in order to be able to, you know, to fund this business and so on. And, you know, so look at the balance sheet to understand where this is going.

You know, it’s interesting you use that example, because, you know, I think there’s two elements to the buy now, pay later thing. And one doesn’t necessarily… So the balance sheet thing, absolutely, you know, a firm just laid off 18% of their workforce. Klarna has had, you know, significant issues on the book in terms of write-offs and so forth.

And the Australian one, after pay or whatever, just went belly up. And so clearly significant issues. But at the same time, the provision of contextual credit without the need to sign for a credit card is a digital experience trend, right? And something that from, you know, if they can get the tech right and get the balance sheet right, then there’s no reason that buy now, pay later or sort of contextual credit experiences like that might work.

But, you know, we’re also in a… We’ve had a pretty tough couple of years from a total industry perspective. Even, you know, major banks have taken some pretty big write-offs, right? But yeah, I get what you’re saying. In terms of, you know, this more inclusive environment, you talk about it in an interesting way.

You talk about it as the amateurisation of finance in the book. Can you explain a little bit more, you know, what you mean by that term in terms of sort of this rise of rebel players that you describe in the book? Well, you know, we saw the Reddit revolution just the last two years where, you know, entire armies of retail investors getting together are able to influence how markets behave, you know. And increasingly, we will see that the end user is going to dictate the relationship, dictate price, costs, you know, how credit is perceived and so on.

And, you know, we are in the world right now where all of the, you know, structures in finance are dictated by the large institutions. The banks tell you whether they want to take you on as a credit. The banks tell you, you know, whether they will, you know, look after you and the kind of services they want to provide to you, the kind of products they want to give to you.

The amateurisation of finance is where the end user, you know, has the power of the relationship and banks to start chasing the customer in order to, you know, to hold the relationship together. And many things are happening on that front. So what you just described, which is, you know, when the relationship is made seamless to technology, you know, that in itself will make a business case for something like buy now, pay later.

In fact, that’s also what I’m saying. That is that when technology becomes more mature, there’s more data available, there’s a network effect put into place, then you will start seeing that the power of the relationship moves from the institution to the end user, to the, you know, to the individual. And this is the power of millions of individuals behaving in a way that subjugates the institution to doing what, you know, what they need to do to reach out to the individual.

You know, when I think about… Can I jump in there a little bit? Because I want to delve a little bit more into… You just mentioned, you know, Alipay earlier. But, you know, when you start talking about the sort of new experiences and so forth, obviously, you’ve been in China more than 10 years now, you know, and you’ve seen the rise of mobile payments that have completely sort of changed the banking environment there. How much did that really influence, you know, the way you wrote about this stuff, particularly in terms of that evolution of the front end of banking from a distribution perspective? It’s an interesting question because how much did anything influence how I wrote my book? I had to take into account what I was looking at and then stand it on its head.

So when you ask me about Alipay, what I’m saying is that even Alipay will pass. And it will pass because we are now going into a world which involves the metaverse. The digital reality is as important as the physical reality.

And, you know, we’re going into a world where interactions take place, not just on the mobile device, but on the, you know, the Internet of Things, right? Which is every… And using AI agents, potentially, for example, that will act on our behalf, right? For smart contracts, yeah. And the story of Alipay, how it, you know, how it rose into dominance and became the dominant payment platform for China and, you know, the host of millions of microsites and so on, something that wasn’t even replicated in the US was because of a short window of time when the regulators still hadn’t got the act together, you know, and then Alipay and WeChat Pay came to dominate. And that dimension is not ever going to exist ever in the history of mankind in any country, because regulators now understand what they’re dealing with, you know, and they want to see greater, you know, responsibility in terms of the way… I think China did a pretty good job of it, though, in terms of, you know, their solution with, you know, UnionPay 2.0 and so forth.

Obviously, there’s been a fair bit of pressure on Ant Group in particular, and Jack Ma since his, you know, announcements pre-IPO, which I don’t think is fair on Jack, because I think he, you know, is a phenomenal creator and, you know, built something really interesting. Having said that, Ant Group is still, you know, one of the largest financial institutions in the world today. But you raise that really interesting point is that, you know, like in this world of programmable banking, and, you know, where your wallet is in the cloud, and it’s connected to CBDCs and the metaverse, and you can pay for it with your smart glasses or whatever in this future world, then, you know, what happens to banks? So what I’m telling the banks in my book is, if the product doesn’t change, nothing changed, okay? So I’m telling the banks to say, look at the most beloved of products that you have, and ask yourself, do you see a time when this will change? And the most beloved of products in the banking stable is the deposit account.

And what is the deposit account? It is an account where you’re given a string of numbers, you’ve got to show up at the bank with cash and deposit in there for hardly any interest while the bank takes your money and uses it for, you know, to make even more money on treasury and so on. And you can’t interact with a whole universe of transactions that are taking place in the digital front, you know? And sure, banks woke up when players like Alipay set up digital wallets. And so the first thing that a bank account needs to be is a digital wallet.

Second thing it needs to be is that with more transactions taking place in the digital space, whether it’s the metaverse or gaming and so on, banks need to be relevant in that space as well. So what I’m saying to banks is, if you don’t have a digital wallet, you know, your bank account, your deposit account is useless. And if you don’t then take it another step further, I can see a time when every bank in the world will need to issue its own stable coin.

OK, and I’m probably the first person saying this because I’ve been following very closely the regulations that are being put in place on stable coins. And there’s no reason why a bank cannot lend its balance sheet to offer a stable coin where the utility of it is just as important as the interest rates that you give. So I see where it can possibly head towards.

And that’s where I start seeing the convergence between, you know, traditional finance and decentralized finance coming through today. I can’t remember, apart from maybe a mention of it in the book, but where do you think universal basic income might fit in this? I know it’s a bit left field, but… Yeah, I think what is happening is that the way in which banking is structured today, it is in fact structured to make the rich richer and the poor poorer, partially due to regulation. What regulators do is to say that the real money making schemes are for the rich, you know, and everybody else… You need financial education to be able to understand the market, etc., etc., yeah.

And a lot of players talk about financial inclusion. Actually, nobody, in my view, needs financial inclusion. Everybody has the right to digital inclusion.

You need to be able to onboard the poor into the digital space, because then they’re free to go out and look at all forms of alternative investments, alternative assets, invest in them and create their own wealth. You know, the guy who bought the first Beeple for $67 million, for example, he was a poor boy from India, you know, and all he did was save up on Bitcoin for years, before he became a Bitcoin billionaire, and then being able to make that change. And he’s so committed to the decentralized world that he just refuses to go fiat.

In other words, for better or for worse, he’s Bitcoin native in that way. And there’s a whole generation of young people coming through who are building their idea of wealth, of assets, you know, in digital terminology, in the digital space. So the big thing about the basic universal income thing is that something has to take place in order to be able to allow people to generate their own wealth and spread that wealth around.

And it’s now no longer possible for people who just have ordinary jobs to even look after, you know, inflation and their savings for old age and all of that. So something has to be leveled through. And I can see where that’s coming from, you know, and just take… This is more than a banking system shift, though.

This is like a transition of society, right? Of how assets are created in society, value is created in society. You know, a lot of the arguments in digital assets today, people take one of two sides. One is that they are totally immersed in it.

And the other side is that they think that this is all rubbish. But what’s actually happening is that society is trying to look for ways in which to value new forms of assets that are being created in the digital space. And we cannot ignore that.

You know, sometimes when I travel, I go to places like the Caribbean and so on. And then it just strikes me that the reason that South America was even founded was, you know, it was founded on the basis of a number of fiction. You know, the Europeans were going there, thought that it was gold.

And they thought it was the other way to China. It wasn’t, or to India. That’s why they call them Indians.

They also thought that what the natives needed most was religion. You know, so today, when we look at that, we said, you know, we pursue fiction in order to create reality. You know, and I think that’s what’s happening in the digital world.

And so we need to pay attention to where society is starting to create assets, where they’re willing to, you know, save money and protect their own future. So we need to bring that into the equation. Plus the fact that those one excluded will never be able to create, you know, generate the kind of wealth that the people with digital access are able to do.

And where does automation fit into this? Because, you know, as we get into more highly automated societies and also climate change response and things like that, we can expect that this should also change sort of value sets, you know, and the way we think about money, you know, may be less important in the future. Is that something that’s possible? Something that I wrote in my book, but which I didn’t get to deal with Chad GBT, because the book was published in October last year, was that I made the distinction between automation and digitization. A lot of what banks do today is automation.

It’s doing more of the same, cheaper, faster, you know, and much more inclusive and all that. Automation doesn’t really change very much. Extreme automation does change the rules a little bit, like what Chad GBT is doing.

What Chad GBT does is increases the ability of platforms to gather, accumulate all the knowledge there is around in the world on a topic and present that to you. It doesn’t create new knowledge. That’s for us to do at the moment.

And we are going to continue being creative, you know, and then we need iterative technology to be able to simulate that. But simulating digitization and automating what we already do are two very different things, you know. And, you know, it’s digitization that transforms society.

But you are talking about digitizing the world. In the book, you talk about tokenizing and these other elements of how we’re figuring out how to digitize the world. And so we’re digitizing it so computers can automate, you know, supply chain and, you know, automation and, you know, transportation and, you know, healthcare and so forth.

So this should, in theory, like you talk about balance sheet issues, you know, think about it when, you know, we disconnect human capital from the labor markets, you know, through automation. This is a very fundamental shift in terms of human development. It’s quite interesting, but it’s almost a philosophical change, isn’t it? You know, rather than, you know, an economic system change.

It’s more like that. What it does is it takes away the labor intensive, you know, aspects of, you know, the human worth, the human value, the labor intensive aspects and forces humanity to redefine what work is, what they want to focus on and so on. So many of the things that we take for granted, like menial labor, for example, we need to really look at it and say, so, you know, if part of our society is not, you know, plugged into that sort of meaningless work, what are they going to do? You know, how are we going to support them? So those are the issues that comes up with automation.

Digitization is like creating entire new realities that didn’t exist before, you know, and that’s a much more hard, much more difficult question to answer. And we make it up as we go, I guess. Yeah.

So what do you hope this book accomplishes, you know, for you and for society in general? What’s your hope? The first purpose of this book is to alert the finance industry that the industry is in a great transition from the platform era to personalization, which means that the industry has to rethink a lot about itself. And as I said, if the product doesn’t change, nothing changes. And that’s a hard sell to, you know, to bankers who truly believe that what they’re doing is right.

So I remind them of the Kodak story, for example, which is, you know, Kodak… The ice farming, too, is a good one. Yeah. You know, and just to repeat the Kodak story a little bit, it’s like in 1995, Kodak, along with a few other players, literally invented the digital film, but it continued selling its 35mm, you know, hard box, yellow box, you know, physical film, right up to the time that it went into bankruptcy in 2010, you know.

So why do banks continue to hold on to products that need to change in a new world? Well, you know, this is what I say. You know, I use this line when I’m doing my talking head stuff. I say to banks, if you’re still issuing a debit card or a credit card today in the age of wallets, you’re using 1970s tech in a 21st century world.

But hey, Edie, it’s been great to have you on the show. We’ve got to wrap up. The great transition, the personalisation of finances here is out now.

Where can people find out more information about yourself and the book? Brad, it’s DanielDaniel.com. All the details of the book are in there. And I continue to write and post new material on that site. Fantastic.

Well, Edie, it’s good to see you. It’s great to see you finally get into print, you know, other than the Asian Banking Journal and so forth. But it’s a great, it’s a really thought provoking piece.

And thanks for coming on the show. Thanks for having me on, Brad. All right.

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FIS, advancing the way the world pays, banks and invests. Welcome to Emerge Everywhere. I’m Jennifer Tescher, journalist turned financial health champion.

As founder and CEO of the Financial Health Network, I’ve spent my career connecting forward-thinking leaders to the growing FinHealth movement. Now I’m sharing these conversations with you. Discover how these visionaries are challenging the status quo and improving financial health for their customers, employees, and communities.

My guest this week, John Hope Bryant, brings passion, dedication, and pure enthusiasm to everything he does. Born and raised in Los Angeles, the 1992 Rodney King riots profoundly impacted John and led to the founding of his organization, Operation Hope. For the last 30 years now, John has used the organization and his platform to address economic inequality, social injustice, and systemic financial barriers born out of the history of racism in the United States.

John Hope Bryant, welcome to Emerge Everywhere. Honored to be here. Honored to be with you.

Thanks for all you do. And to you. You know, we have both been at the work of financial inclusion for a long time, but you’ve got a good eight years on me.

You started Operation Hope in 1992, and it’s been really inspiring to watch your vision and your work grow and evolve over these last 30 years. I’d love for you to just talk a little bit about your flagship organization, Operation Hope, and the key learnings and pivot points on the journey. I think you’re such a well-known figure and everyone knows Operation Hope, but I don’t think they really know just how much your organization is doing every day.

Operation Hope was founded after the Rodney King riots in 1992 as America’s first non-profit social investment banking organization. And I was laughed at then by that and a few other things. Financial literacy, ha ha ha ha ha.

Capitalism and free enterprise in the hood, ha ha ha ha ha. We have four million clients. We have $4 billion in capital that our partners through Operation Hope has invested for home ownership, small business ownership, consumer credit, et cetera, down payment assistance, disaster recovery.

We’re about to go into Florida right now. God bless those who are affected there. We created financial literacy policy, at least at the executive level with it, through George H.W. Bush and then Obama followed suit.

We created the emergency financial disaster preparedness response recovery policy under Secretary Tom Ridge, first secretary of DHS, Hope Department of Homeland Security, and are the national partner with FEMA and Homeland Security and FEMA. FEMA and Homeland Security are on, basically the economic Red Cross is our model. After you have a physical and emotional disaster, you have a financial one.

We are in 46 states, 200 locations full time. Budget last year doubled from our projections. And the work also doubled.

We surged again during the pandemic. We surged, unfortunately, during every crisis. And whether it’s good news or bad news, there’s a role for Operation Hope.

Our mission is to become America’s financial coach. As you know, my mission is a little bit more than that. But so that people can understand it, it’s the private banker to the working class.

Folks with too much month at the end of their money. We’re raising credit scores, 54 points in six months. 120 points in 24 months.

Nothing changed your life more than God or love. The move in your credit score, 120 points. We’re reducing debt by $2,600 for somebody making 50 grand a year.

That’s transformational. We’re increasing savings, about $300 for that same individual. Doesn’t sound like a lot, but the average American, as you know, doesn’t have $400 for an unplanned thing.

So yeah, there’s much more to it, but that’s the bones of the organization. Founded, this is our 30th year. And we’ve only just begun.

You know, you mentioned the history of Operation Hope really being rooted in the LA riots. And people still talk about that first bus tour, John, that you led where you brought largely white male corporate execs to South Central LA to help open their eyes to the disinvestment. And now here we are 30 years later.

Both laugh at that, too, by the way. I know, I know. But my question is, have things improved in the way that your 20-something-year-old self had hoped they would? Better and worse.

Say more. It’s really funny. Talk about generational situation.

T.I., the entertainer T.I., is a friend of mine. And he calls me a mentor. And we were talking one day, and I said something.

He said, say less. I said, excuse me? You said, say more. You trying to offend me? What do you mean, say less? I got a lot to say.

He’s like, no, no, say less, meaning I understand what you meant. Right. Well, I mean, listen, it is bold of me as a podcast host to be telling John Hope Bryant to say more, because we all know you got a lot to say.

Yeah, talking to me is like getting a glass of water out of a fire hydrant. But you never want to be the old guy in the club. So before you kick me out of this deal, I’m going to leave.

No, look, passion is not my problem. Look, I think that if you had asked me, would I be national with 200 locations, with, I think, a logical vision to get to 1,000? No, I wouldn’t have said that. If you had asked me, would I think that major corporations would just sort of hand me their brand and large chunks of capital and trust me with it, I’d say no.

If you asked me if this would become a mainstream issue in this country back then, based on where I came from, I would say no. So those are some positive things. And I can see scale coming around the corner.

The negatives are the problem has outrun the moment. I think we’re in a moment. I think that we’re sitting in a moment in history right now.

I don’t think history feels historic when you’re sitting in it. It just feels like another day. But that doesn’t mean it’s not historic.

And you sort of feel like no matter how many speeches I give, no matter how many great podcasts like yours I do, no matter how many meetings I have, no matter how much I travel, somehow the problem and the issue of struggling people is outrunning my capacity in real time to solve it or address it. I think that the political environment has surprised me. In what way? I never thought that this country would manipulate facts.

I never thought that we would be dumb on purpose. I mean, to be stupid is a lot of work because we live in a smart economy. You can search anything you want on your smartphone.

The internet is available to everybody. Knowledge is accessible. Common sense, you fill it in your gut.

Women have an intuition. I’m not a woman, but I’m sure you know what I’m talking about. There’s a woman’s intuition.

And I think there’s God speaking to you and through you. I think people know in their bones what the truth looks like. And now I sort of realize that democracy is a very delicate thing.

And you’ve got to protect it and earn it back every day. And we are in a very dangerous moment. We’re in a cultural civil war because we never healed.

We never said, the Confederates, you lost. That was a sin. That was wrong.

We’re Americans. Now we’re all on this team. Now, by the way, publicly acknowledge that.

Okay, tear up that flag and let’s be done with it. Now we’re all Americans. Never did it.

And that’s where we are. We just have a lot of unfinished business. And I never thought that it would bubble up to be mainstream.

I knew there’d be fringe this and fringe that. But to have fringe in the main and to have people lying with a straight face is, I mean, good thing my middle name is Hope. So I guess, so those are the two dichotomies.

We have the infrastructure I never thought I’d have, the momentum I never thought I’d have. But now I’m trying to catch up to the danger of problems. Well, and I think that begs the question, how do we as a nation simultaneously do that healing that you talk about and make progress on empowerment and ownership for Black Americans and people of color? How do you do those things at the same time? Because there’s equal pressure, frankly, on both right now.

So coincidence is God’s way of remaining anonymous. If it wasn’t for the global pandemic, the worst in 125 years, we wouldn’t have gotten rid of a certain individual who would have been reelected as president by an overwhelming margin. Luckily, he mismanaged it.

Because if he had a second term, we’d be a banana republic, in my opinion. If it wasn’t for the pandemic and then the George Floyd incident that followed that, because of the pandemic, everybody’s watching the news. If it wasn’t for the pandemic, a large swath of us would have been like, well, what was that thing? George who? Somebody Floyd? OK, what time is dinner? But because of the pandemic, we’re all watching the news.

All of us, children, college students, hippies, everybody, right? And we saw public lynching. Well, that triggered the 400-year-old social justice reckoning of Black America. Then you had, I’m paraphrasing here, you had January 6th, which is the first time that’s happened since the 1800s.

That was the British attacking us. These were Americans attacking us. And then you had, this year, Roe versus Wade.

I’m at a dinner, and very like you, I go to these dinners. People expect us to talk. So I went to dinner in Sun Valley and they set me at the head of the table.

I said, OK, here we go again. And I didn’t have to say a word for 45 minutes because there were wealthy white women at the table who were cursing. They’re like, this is some BS, right? And they were talking about Roe versus Wade.

And they were upset. And after 45 minutes, I turned to them and I said, well, congratulations. You now know what it feels like to be Black when you don’t have a voice.

And no one’s listening to you and paying attention. And somebody tells you what to do with your body and your life and doesn’t care what you think about it. And so now that you’re outraged about this, what are you going to do about this? So now you have outrage about the environment.

You have outrage. I mean, what happened in Florida would have been much less intense if we didn’t have global warming. Warming of the seas because hurricanes feed on warm weather, warm water, et cetera.

You have the women’s rights issue. You have the environmental issue. You have this economic issue that’s affecting everybody, by the way, not just Black people.

You have the global pandemic. You had this political unraveling. If you’re a Republican, you’re wondering what the heck happened to your party.

I mean, so everybody’s got something to be pissed off about. That, to me, that’s a reason for hope. Because if it’s just Black people upset or just Latinos or just poor people, you’re doomed.

So there’s two reasons why I’m actually hopeful. Rainbows only follow storms. You cannot have a rainbow without a storm first.

Number one, everybody’s got a knot on their head. Everybody’s frustrated about something. And nothing gets solved unless you’re frustrated.

If you’re happy, you move on with your life. Number two, demographics are destiny. I love math, Melody Hobson quote, because it doesn’t have an opinion.

And the math for the first time in history is that people of color and women together are going to become the demographic majority. Now, that’s not some sort of wide-eyed liberal statement. It has nothing to do with any of that.

Blacks won because we’re all in this thing together. The economy lost $16 trillion, according to a Citigroup report, during the pandemic because of racism against Blacks alone in the last 20 years alone. That every major company that is successful financially has embraced diversity and inclusion.

And companies that have hit a hard nose and thumbed out is because they actually have rejected progressive thought. The largest economies in the U.S., the largest economy in the U.S. Well, first of all, the U.S. is the largest economy in the world, the most diverse place in the world. The two largest economies are the most diverse states.

The only city in the South that embraces all people is the most economically prosperous, where I’m at, Atlanta, the moral capital of America. You can go on and on and on. How diversity is a business case, not a moral case.

That’s what gives me hope, is that the math now is on the side of justice. And by the way, we’ve been here before. I know you have a question coming up, so I won’t upend it because you mentioned we want to talk about the role of the private sector.

We’re going there next, so go ahead. I mean, essentially, while all these friction points and challenges have been going on, there’s been increasing pressure on the private sector to step up. I think there’s a lot of statements being made and a lot of commitments being made.

And I’m curious to know what you think about those, whether you feel like it’s legit, it’s real, is it window dressing? And do you think it’s lasting? It’s the same answer I gave you about Operation Hope. And when I look back, it’s the same answer, but just different. $62 billion, $62 billion, $62 billion that was committed by corporations for social justice after George Floyd in 2020, well, by 2021.

That’s a big number by anybody’s measurement. Now, is some of that number fluff? Yes, it is, because some of that by banks would have been done anyway, is mortgages and so on and so forth. They’re already on a trend line to do some of that stuff.

It’s their job, by the way, under the Community Reinvestment Act to do it. But I don’t mind them getting credit for doing that. Maybe it holds them accountable.

But even if half of $62 billion is malarkey, I’ll take it. It’s still the largest commitment to social justice and economic uplift of those who are the underserved in the history of any modern economy. Do you think the commitments are off the side of the desk, philanthropic, et cetera? Or do you think you’re seeing change in the actual business and business cases in the boardrooms? That’s the question.

I think that you’re saying this is business. Let me answer your question directly. This is business.

I’m no longer talking to the… I’ve talked to everybody, CRA manager, vice president of public affairs, and coming up in my career. The speed dial I’ve got now are CEOs. CEOs, billionaires, the folks who lead the companies want to know, what the heck are you thinking, John? What are we doing? How are we doing it? This comes up to my desk now.

This hits my desk. I’m dealing with the vice chairman, the chairman, the CEO, the shareholders. They see their brand equity wrapped up in these issues.

They see their customers and their employees wrapped up in these issues. This used to be a foundation issue or a public affairs issue or PR issue or community. Nothing wrong with that stuff, by the way.

Now, this is squarely a business issue. They just don’t know what to do. That’s all.

They want to do something. They don’t know what to do. A large part of this $62 billion, which I think is well-meaning, it’s just that the corporate suite does not know how to get down to the public street.

That’s part of my job, part of your job, part of other folks’ job is to be the translator and the transmitter to help folks who want to do good to do good so they can go from Ph.D. to Ph.D. Let me give you a place of hope. We’ve been here before. The South, where I’m at now, the Southern states were not integrated by the mayors and the governors and elected officials.

In fact, those elected officials were standing oftentimes in the doors of progress and saying, over my dead body, will you enter this room? Playing on the fears of politics of that moment. It was the private sector, Jennifer, the private sector that stood up and said, knock it off. The color of my currency is green.

The black folks got green just like the white folks got green. Y’all picketing in my neighborhoods, in my city where the majority of the customers are black is causing me to go broke. The JCP and Woolworth and the corner soda shop and the bus company, which back then was privately held, took down the whites only signs first.

That was my mentor, Ambassador Andrew Young, who negotiated those deals behind closed doors. Dr. King would shut down the economy, and a few weeks later, Andrew Young would go put on a business suit behind closed doors and cut a deal to take down the whites only signs. They would then, the leaders in that town, Jennifer, would go to the politicians and say, okay, now we’ve knocked it off and it’s time for you to knock it off.

By the way, if you’re not compelled, we’re financing your campaign. That’s what changed the South. It was the private sector that opened it up.

That’s why I have hope, one of the many reasons I have hope today. I think that racism is economically stupid. I actually think whenever you turn on the greed button on saving the environment, the environment will be saved.

I don’t mean that bluntly as that sounded, but if you stop saying do good and say- Listen, self-interest is a very effective lever. I mean, look, think about solar highways all around the world. We’ve got concrete highways, the concrete, the asphalt, which is raising all kinds of heat levels.

This was created in the 1940s, 1950s. It was a huge boon for jobs, for contracting. It went on for 20 years.

Imagine if you flip that switch worldwide around turning that into solar highways, plugging the solar homes, and then those who have places that are hot, which tend to be poor, by the way, could sell that excess energy to places that are cold. Now you created a whole other industry instead of businesses. We’re getting off topic, sort of, but I’m just saying that in some ways, we’ve been looking for love in all the wrong places.

Right. Yeah. So I love the way that you are a student of history and that you help connect points in history because history just repeats itself over and over again.

But despite your embrace of the private sector and mine, I think we both would agree that government does play a vital role. Oh, absolutely. And so the question is, particularly as it relates to racial equity, reducing the racial wealth gap, promoting Black wealth, what should the government be doing? There are many things the government is trying to do.

What’s the most important thing it can be doing? The groundwater effects. You know, it’s really interesting. When I was coming up, folks did not take me seriously.

And they literally, literally rolled their eyes. Well, you were young back then. And back then, you know, young people didn’t get anything done.

And, you know, we’re like, unfortunately, Gen Xers, right? Everyone counted us out. Now, today, young people do everything. Well, yeah.

Well, you cannot have a movement without young people. Because young people are idealistic and they want to change the world. You know, Dr. King was young and Gandhi, I mean, all these folks that, you know, had started when they were young.

Mandela started when he was young. And I was young, started Operation Hope. I just, thank God, people dismissed me.

They take me seriously. They stood in my way. By the time you look up, I’ve got momentum.

And you remember people, I’d walk into a room, you weren’t there in the room. People would, and I’m not talking about 20, 30 years ago. I’m talking about a decade ago.

People were still rolling their eyes. OK, here comes John, Brian, whatever it is they had in their mind. All my point is that I just was in a, I just saw something different than everybody else saw and was, and I was willing to take the road less traveled and pursue it.

My point here is that I wasn’t taken seriously initially. And now I’m almost taken too seriously. Because now people are asking me, what is he not asking me? Is he going to run for office? If I help him, is he going to be trying to unseat me or whatever? Again, fear and stupidity.

If I was going to run for office, I would have done it by now. I really do believe in what it is I’m doing and believe that this could be a transformational, historic force for good. I think this is what Dr. King would be doing if he was alive today.

And one thing sets up another. So Dr. King didn’t run for office, as an example. Dr. King set up an environment for officeholders to do the right thing.

Dr. King won the Nobel Peace Prize and went to see Johnson. Johnson didn’t want to see him because he was afraid Dr. King was going to ask him for something. So they tried to come up with all kinds of excuses.

Finally had to see him. They saw him in the residence that night, meaning no TV cameras. I’m sorry, Dr. King.

I can’t do another civil rights bill. I’m just doing this very quickly so we can move on to something else. I’m sorry, Dr. King.

We can’t do another civil rights bill. And Dr. King said, why? He said, well, you think I’ve got more power as president than I really have. I’m sorry.

So they left. And Dr. King was smiling at Andrew Young. And Andrew Young said, why are you smiling? We got a head handed to us.

He said, well, Andy, the president said that he thinks that we think that he’s got more power than he really has. Why, Andy? This would give the president some more power. And Andrew Young turned to Dr. King and said, I’ve never heard a more arrogant thing from a Morehouse man than that.

But they went to—within two months, you had the Pettus Bridge incident. Again, we don’t have time to unpack the whole story, but that was also an accident of history. Dr. King was supposed to be there on another Sunday.

So he was there that Sunday, but he’s got his schedule mixed up. He didn’t show up. They never would have attacked folks on the Pettus Bridge if Dr. King was there.

The attack happened. That created an environment where Johnson created another civil rights bill. We end up having four.

So there are groundwater effects in our system that I can’t do anything about. Somebody needs to at the policy level. What I can do is tee up the results, tee up the moment, create the positive friction that will allow leaders to pass financial literacy for all in K-12 college and to pass legislation that gives a tax credit for internships at scale, apprenticeships at scale.

So we are, I think, the instigator. At the time we’re recording this, I suspect that tomorrow you will be in Washington at the Freedman Bank event, which Treasury has now turned into an annual event really focused on economic inclusion. And when I think about the role of government and I think about the Freedman’s Bank, in fact, you kind of inspired me.

This goes back to the idea of truth and reconciliation and the need for healing. When I think about the history, the Freedman Bank story and the fact that the government ultimately let it fail, didn’t come in and backstop it. And the hundreds of thousands of people who lost everything, the tragedy of managing to scrape together a little something after being set free only to have it lost forever.

But we have those records. We know exactly who is owed and how much. And we could make a very easy calculation about what that is worth in today’s dollars.

So when I think about what the government could be doing, I think about a sort of a mini Freedman’s Bank reparations. It’s not the kind of capital R reparations that a lot of people talk about. It’s more like what you see colleges and universities doing when they think about, oh, we own slaves and let’s calculate the benefit that we owe those people.

I’m curious, what do you think about that? And what other ways can the government really make good on what happened in over history with the Freedman’s Bank? First of all, I want to say that what you just said is brilliant. And as much as I think and do and whatever people say I’m an innovative thinker, I had never thought of what you just said. And my first reaction was I was going to tell you I thought you were wrong, but actually I think you’re right.

The reason I was going to say I thought you were wrong is if you were going to say then thus this, thus reparations for all, reparations for all would literally bankrupt the largest economy on the planet because the slaves were worth, those enslaved were worth twice as much what railroads were worth in the 1840s. And we literally built this country for free. The country has been two thirds enslaved, one third free.

People don’t realize that. And everybody was involved with the banks, insurance companies, universities. It’s touched every part of society writ large.

And it is incalculable from an economic, the largest reverse transfer of wealth in certainly American history, maybe world history because of how big the U.S. economy is and has been slavery. So it is a wrong you cannot fiscally make right. But this thing about Freedman’s Banks, that’s very doable.

And it’s very logical because the best records in the world for formerly enslaved are, people don’t know, Freedman’s Banks records. Because if you were a Union soldier and you died in the line of duty, the government had to know where to send you, send your assets. And so they went three deep on knowing, documenting your family structure.

Because of slavery, there aren’t those natural records to find. My great-grandfather was, my grandfather was a slave, sorry. My great-grandmother was a slave.

I can’t get beyond my great-grandmother’s records. I can’t get beyond my great-grandfather’s records. Because they were owned by somebody, like a pair of shoes.

So this idea you have is brilliant. And there were 71,000, I think, depositors. They were Union soldiers primarily.

And they were being preyed upon in local camps by the Czech cashers of that day. And the bank was created to domicile their savings and, quote, teach them about the language of money, financial literacy, circa 1865. What people don’t know, Jennifer, is that two months before the Freedman’s Bank was Field Action 15, which allocated 40 acres per Union soldier in a pilot program.

And then the mule came the month after. They worked that land really hard. They said, my God, they’re so industrious, give them a mule.

People don’t know that’s the story of 40 acres and a mule. The bank came 30 days later to finance the land and domicile the savings, giving them the sort of the Jewish economic infrastructure experience of land, tools, machinery, economics, money, right, for those who were oppressed. And then Lincoln was killed the next month when he promised Blacks the right to vote.

And Booth said, that’ll be the last speech you ever give. And so you wonder today why Blacks, Latinos, sorry, Blacks, Native American Indians, and poor whites are left out of the economic system. I mean, African-American Blacks, not African Blacks, Caribbean Blacks.

It’s because they were never given the memo, how the system works, how does economics work. They were denied the basic infrastructure and systems of how to succeed in a capitalist society. Poor whites shows you it’s not just racial.

It’s just worse if you’re Black. Native American Indians and African-Americans. And I love just, again, breaking this down into facts and details, getting it out of the generic so you can understand it.

So the Freedman’s Bank idea you have for reparations with small r is a brilliant idea. And I think it would show that we believe in a right in this country. Let’s work on that together, you and me.

I’ll be honored to. I think that would be fun. All right.

One last question I have for you. We could talk all day, but, you know, you are always clear about whose shoulders you stand on. And you talk about that a lot.

By the way, by the way, some people resent even that I renamed the Freedman’s Bank. That’s a whole nother. Yeah, it’s unbelievable.

Here’s a quote for your listeners. This is what Andrew Youngmaster and Dr. King. Talk without being offensive.

Listen without being defensive. And always leave even your adversary with their dignity. Because if you don’t, they’ll spend the rest of their life trying to make you miserable.

It becomes personal. And I would encourage people to listen to this to learn to step over mess and not in it. Battle, not the war.

Don’t rearrange the deck chairs in the Titanic in your life. Just let it go and keep it moving. Let the work be your legacy.

So this is another example of how you are constantly inspiring other leaders. And what I want to know is who inspires you? I know there are many people from the past who inspire you every day. I’m curious in present day, who inspires you? Well, you know, Andrew Young’s still here.

He’s 90. True. He’s around the corner.

So I call him my hero. I’ll talk to him today. He answers the phone.

Hey, my hero. I love the dude. Walking history.

Bishop T.D. Jakes, dear friend of mine. And he is who we know him to be, privately as publicly. Doug McMillan, CEO of Walmart.

That dude is real. He’s my co-chair of Financial Literacy for All. He emails and texts me directly.

There’s no, he doesn’t push it off. We don’t have time for this, but the story I can tell you about the boldness with which he moved quickly, and he did it himself so that his staff couldn’t stop him, was inspiring. CEO of Delta Airlines, Ed Bastian.

CEO of PayPal. I’m going to his wedding tomorrow in Italy. I shouldn’t have said that.

Dan Shulman. CEO of Nike, John Donahoe. Luckily, I can go down his list forever.

Max, Maxwell Myers, the producer of arguably the most powerful business show in the world, Squawk Box, who doesn’t have me on as a Black guest, just a guest. And he puts me up with whomever, and it’s my job to be the last man standing on the issue of the day, not the Black issue of the day, just the issue of the day. And by doing that, you prove that it’s not a Black guest, it’s just a guest.

Who happens to be Black? There are a lot of these people. Bill Rodgers of Truist. Charlie Sharp is a new friend of mine, a guy I really admire at Wells Fargo who’s fighting the good fight and doing the right thing.

Brian Jordan at First Horizon Bank. And women and men, Oprah Winfrey and others, who have quietly done the right thing consistently. John, thank you for joining me on Emerge Everywhere.

It’s my honor to be with you and keep changing the world everywhere. Excellent. That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks.

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