Normally, I write about financial matters. This item, which originally appeared as a guest blog on Bill Carey’s blog, The Dystopia Report, is something completely different.

By Tom Fredrickson

When former National Football League great Donté Stallworth quoted my dad in a New York Times op-ed piece, it was cool in a buzzy, Facebook sort of way. It also got me to turn off Netflix and start to think.

I was also glad to see my father cited because this is a pivotal moment and he spent his career studying the roots and consequences of racism. He is deeply relevant, Stallworth recognized.

“The N.F.L. has had plenty of opportunities to be on the right side of history,” Stallworth wrote. “It could have supported Colin Kaepernick and other players who took a knee four years ago to protest police brutality and racial inequities in the U.S. justice system. But the league failed to protect them when the players needed them most.”

The Black Lives Matter movement is boldly calling out racism in the justice system. The N.F.L., though distorted by celebrity and wealth, is part of society and reflects it. American history, in turn, illuminates football and other elements of modern society.

“It was only last month that the league issued an apology of sorts, admitting that ‘it was wrong for not listening to N.F.L. players earlier’” Stallworth wrote.

“How could the N.F.L. be so blind? The author and historian George M. Fredrickson wrote that ‘societal racism did not require an ideology to sustain it as long as it was taken for granted.’”

An overwhelming majority of owners in the N.F.L.’s history has been white men. “Today, more than two-thirds of the players are Black. But across 32 teams, there are only three Black head coaches and two Black general managers. Over the past three years, there have been 20 head coaching vacancies, but Black coaches filled only two of them.”

Racism was always present, but no one needed to express it because there was no concerted challenge to the status quo. The league made the implicit assumption that blacks lack the leadership qualities, intelligence, and discipline to run teams.  Following the murder of George Floyd, the outrage (personal and societal protests) became too great to ignore.

The Arrogance of Race (Fredrickson, 2008) continues where Stallworth left off:

In citing my father’s quote, Stallworth appears to suggest an analogy between team owners and slaveholders. I am sure many people would find it laughable to consider men earning millions of dollars a year slaves, but as in slavery,  players (usually) lack agency, are subject to physical battering, and get traded like chattel.

“Until the revolutionary era no one had seriously challenged slavery and black subordination in the southern colonies. During and after the Revolution there was a challenge of sorts, but the most recent historical studies suggest that it was half-hearted and ineffectual. … In the absence of a serious political and intellectual challenge to the implicit assumptions of southern biracialism, slaveholders found that they could protect their interests merely by encouraging the belief that emancipation was impractical or, if pushed, by standing firm on their ‘rights’ as owners of slave property.”

More directly, football fits right in the corporate mold. In the entirety of the Fortune 500 companies, there are only four black CEOs. Just as there is a paucity of black offensive and defensive coordinators being groomed for coaching jobs, there is a small pool of black executives to tap as corporate leaders. Blacks are sharply underrepresented in top business schools, largely because the tuition is unaffordable. In a sense the N.F.L. is worse than other businesses: It has many talented black players who could easily be groomed for leadership roles.

Young black players are “stacked” (players are slated to compete for certain spots) for positions that require speed and quick reflexes as opposed to the down-the-middle “thinking” positions such as quarterback, center, and linebacker. Black children gravitate to positions held by role models, reinforcing the pattern. Even players who have developed the requisite skills have been pulled in different directions because of the league’s prejudice.

“Walt Frazier, an esteemed high school quarterback who received scholarship offers to play college football, chose to play basketball in college instead, believing he had no future as a black quarterback when his time came to play professionally (the move paid off, as Frazier would have a Hall of Fame basketball career).” (msgnetworks.com, Wikipedia)

American history and the history of football show that black progress mainly occurs only when white people are forced to give way. George Preston Marshall integrated the Washington Redskins in 1962 only after Mo Udall, U.S. secretary of the interior under John F. Kennedy, and Attorney General Robert F. Kennedy conveyed that the team would have to because D.C. Stadium was federally owned.

The racial path of professional sports has a parallel in the Civil War. It took the threat of losing the war of secession for the nation’s military and political leaders to accept blacks as soldiers. The conventional thinking was that blacks would be cowardly and undisciplined – that they would drop their weapons at the first challenge. When the exact opposite proved to be the case, and black regiments fought with valor and distinction, public, military, and political opinion started to change.

In my father’s book, Big Enough to Be Inconsistent (2008), which was released shortly after he died, he examined in part how the exemplary performance of black soldiers influenced the evolution of Abraham Lincoln’s thinking about their capacity to be free citizens. This idea was taken up by historian Eric Foner, who supplied a blurb for my father’s book, yet failed to acknowledge or credit the work in Foner’s Pulitzer Prize winning book, The Fiery Trial, 2010.

Fredrickson: “Clearly … Lincoln’s personal view of African American capabilities had become more favorable as a result of (black) military achievements.”

Foner: “Partly because of the value he placed on the contribution of black soldiers, Lincoln’s racial view seemed to change.”

Because of segregation, playing football and other sports on white professional teams remained out of reach for black athletes. Courageous pioneers such as baseball legend Jackie Robinson helped to change that. The small, difficult openings finally cracked wide and black athletes eventually took a huge role. But in football, they have bumped up against the glass ceiling described by Stallworth.

One of the greatest obstacles faced by both slaves who wanted to become soldiers and black players who wanted to play in the N.F.L. was the appeasement of Southern racism. Some Union generals took the initiative to free slaves in areas they controlled. This was upsetting to Lincoln, partly because he felt he needed to appease border states of Kentucky, Missouri, and Maryland, which were insecurely in the Union hold. Both my father and Foner used the same quote in a letter that Lincoln wrote to his friend Orville Browning: “I think to lose Kentucky is to lose the whole game.”

The integration of the N.F.L. also faced the obstacle of Southern appeasement. Marshall claimed that integrating the Washington team would cause it to lose fans in the South and the team was at the time the southernmost team in the league. 

Marshall said: “We’ll start signing Negroes when the Harlem Globetrotters start signing whites.”

Racism, as my father saw it, is the belief that certain races are innately inferior. According to racist ideologies, no amount of education or culture can bring an inferior race to true equality because of inborn biological differences.

Racism developed as a response to Northern abolitionism, which grew in force and volume in the 1830s.

“Prior to the 1830s, black subordination was the practice of white Americans, and the inferiority of the Negro was undoubtedly a common assumption, but open assumptions of permanent inferiority were exceedingly rare. It took the assault of the abolitionists to unmask the cant about a theoretical human equality that coexisted with Negro slavery and racial discrimination and to force the practitioners of racial oppression to develop a theory that accorded with their behavior.” (Fredrickson, The Black Image in the White Mind, 1971)

Blacks were lazy and bestial by nature, the thinking went. The structure and discipline of slavery was not only a positive good but necessary. The development of “scientific” views of racial inferiority made long-standing, vulgar prejudice against blacks more respectable and actionable.

A competing ethos was “romantic racialism,” which posited blacks as sweet and simple but in need of paternalistic help or control. Uncle Tom in Harriet Beecher Stowe’s Uncle Tom’s Cabin exemplifies this. At least this form of prejudice sought to offer protection from abuse and, in Stowe’s view, outright emancipation.

The tension between democratic ideals and the immense profitability and looming expansion of slavery led to the Civil War.

“Convince me that one man may rightfully make another man his slave, and I will no longer subscribe to the Declaration of Independence,” abolitionist editor William Lloyd Garrison said in a speech in Boston in 1854.

Lincoln issued the Emancipation Proclamation in 1863 in large part to weaken the confederacy; the proclamation declared slaves free in secessionist states, though their freedom had to wait for their escape or the victory of Union forces.

The end of the Civil War, the passage of the 15^th Amendment, and the start of Reconstruction led to the slaughter of thousands of blacks to prevent them from voting and holding office by the Ku Klux Klan and the White League. “Klan violence was unquestionably the worst outbreak of domestic terrorism in American history,” wrote Ron Chernow. (Grant, 2018)

In the decades that followed, blacks were “excluded from industry for a long period except in parts of the deep South and confined largely to agriculture.” (C. Vann Woodward, The New York Review of Books, Aug. 12, 1971)

Blacks were not competing directly with whites for jobs, thus not an economic threat, but they were held in contempt by many people in the South as well as the North thanks to tradition, “science,” politics, and legal segregation.

In the view of W.E.B. Du Bois, the great black intellectual and founder of the National Association for the Advancement of Colored People, poor whites accepted their place in the post-Civil War capitalist system partly because they received non-financial recompense.

Reviewing a biographical volume about Du Bois, my father wrote: “… in explaining poor white support for the Jim Crow system, he called attention to the way in which white workers, although poorly paid, were ‘compensated in part by a sort of public and psychological wage. They were given public deference and titles of courtesy because they are white.’” (The New York Review of Books, Feb. 8, 2001)

The famous idea, which was outlined in Dubois’ 1935 book Black Reconstruction in America 1860-1880  rings true to me. In his Marx-influenced construct, white laborers withstood their economic exploitation with help from the mental lifeline of white supremacy.

(White laborers) were given public deference and were admitted freely with all classes of white people to public functions, public parks, and the best schools. The police were drawn from their ranks, and the courts, dependent on their votes, treated them with such leniency as to encourage lawlessness. Their vote selected public officials, and while this had small effect upon the economic situation, it had great effect upon their personal treatment and the deference shown them. White schoolhouses were the best in the community, and conspicuously placed, and they cost anywhere from twice to ten times as much per capita as the colored schools. The newspapers specialized on news that flattered the poor whites and almost utterly ignored the Negro except in crime and ridicule.

Du Bois had become a socialist but split from the Marxist left because of its under-emphasis of racism. Mainline Communists and socialists believed that racism was a byproduct of the class struggle and that racial animus would disappear when capitalism was destroyed.

As blacks, faced with the resurgence of the Klan and lynching, moved North in search of safety and job opportunities, they became an economic threat to whites, who discriminated against them in all facets of life, from trade unions and employment to housing and schools. Economic discrimination reinforced a longstanding cultural prejudice.

My father cited Du Bois’ 1940 autobiography, Dusk of Dawn, in which Du Bois wrote the split between white and black workers: “depended not simply on economic exploitation but on a racial folklore grounded on centuries of instinct, habit and thought and implemented by the conditioned reflex of visible color.”

The question of whether racism is fueled more by cultural or economic factors is very much alive. Is racism thriving because, as it did under slavery, it serves the economic interests of the ruling class? Or are cultural prejudices more important? Or is it some combination of both?

Clearly, racism played a pronounced role in Donald Trump’s victory in 2016 and in his ongoing though falling political appeal.  Did he build his campaign on the bedrock of historical, cultural racism? Or do minorities and immigrants make convenient scapegoats in a time of inequality and economic hardship, as they did for Adolf Hitler in Nazi Germany?

When it comes to the glass ceiling in professional sports, racism in the justice system, and social inequality, is the answer moral suasion, debate, and legislative action? Or does real change require taking to the streets? Can we get to where we want to go through incremental change or does it require a ”revolution,” however you define the word?

Maybe – like Lincoln – we are big enough to change.

Never mind how you were during finals week. Avoid cramming to figure out how to pay your children’s college expenses.

The year your scholar applies to college is too late to get your ducks in a row.

Early on,  parents should assess if their kids will get aid based on need. Not surprisingly, need is based mostly on the parents’ income and assets.

The income level that virtually guarantees you won’t get assistance is $250,000, according to Peter Van Buskirk, president of consulting company Best College Fit, whom I heard speak recently at a National Association of Personal Financial Advisors (NAPFA) conference. Plenty of young, newlywed couples in New York City – with its flourishing tech and financial industries – earn more.

Their best friend – absent wealthy, generous parents or a trust fund – is a 529 College Savings Plan. A 529 plan is like a Roth IRA for education. Money in the plan is not taxed. Money pulled out, if used for qualified education expenses, is tax-free.

New York residents have an extra incentive. Married couples filing jointly can deduct up to $10,000 from their state income taxes for contributions to the New York State 529 College Savings Plan. For single filers, the deduction caps out at $5,000. To get the tax break, they would need to invest through New York’s 529 Program (Direct) or New York’s Advisor-Guided College Savings Plan.

I prefer the direct plan. Not only does it offer low-cost Vanguard funds, it’s commission-free. That’s not the case for plans sold through advisors.

Within the direct plan, parents leery about making financial choices can opt for age-based portfolios rated conservative, moderate or aggressive. The underlying investments become gradually more conservative.

In addition to the two New York state plans, non-New York-based plans are available for purchase, but they are ineligible for the New York State tax deduction. I don’t see how out-of-state plans would overcome this disadvantage.

Like other assets owned outside of retirement accounts (besides the  primary residence and an excluded amount of about $20,000), 5.64 percent of parental 529 assets are counted toward the expected family contribution in the Free Application for Federal Student Aid (FAFSA). When the plans are held in a custodial account, the expected contribution rate is 20 percent under FAFSA and 25 percent under the CSS Profile, which is required by about 300 more selective colleges. (CSS also considers equity in a primary residence, which, of course, can have a significant impact in New York and other pricey real estate markets.)

A third possibility is for grandparents to own the plan with the child as a beneficiary. These assets are not counted in FAFSA. However, money drawn from grandparents’ accounts to pay for college expenses is considered the beneficiary’s income in the following year’s FAFSA. (The same applies to gifts from the grandparents to the grandchildren.) Therefore, it’s generally best for grandparents to hang onto these funds until after the final FAFSA is submitted in the student’s junior year of college.

Custodial accounts in general count heavily in the FAFSA formula at 20 percent. These accounts may have built up from gifts or inheritances. It may be wise to use the funds for private school tuition, camp or other expenses for your child before applying for financial aid.

All investing involves risk. Consult with a financial advisor and tax professional to see how the information here may apply to your personal situation.

This just fits in a few pieces of the college funding puzzle. If you want more information, contact me for a consultation – or suggest a blog topic.

 

When it comes to preparing for retirement, it’s not what you make, it’s what you save.

One of the best ways to bolster retirement savings is through a Health Savings Account (HSA). These accounts are available in conjunction with an HSA-compatible, high-deductible health insurance plan.

That mouthful refers to an option available from some employers as well as a small number available through state health-care exchanges or privately from insurance companies.

It may seem counter-intuitive to think of an account for health spending as a retirement resource. But health care looms as a huge expense for most retirees. According to Fidelity Investments’ 16th annual retiree health-care cost estimate, released in April, the average couple age 65 in 2018 will need about $280,000 (after tax) just to cover health-care expenses in retirement.

Having an account set aside to help pay these expenses could help, especially since the cost of medical care is expected to increase much faster than the general cost of living.

For the clients I serve, mainly in Brooklyn and the rest of the New York metropolitan area, I assume general inflation of 3 percent and medical inflation of 5 percent in my retirement plans. Over time, that added inflation makes a very substantial demand on a retirement portfolio.

Saving in an HSA is more advantageous than saving in a 401(k) or IRA. Money contributed to an HSA is deducted from your taxable income even if you don’t itemize. Money coming out of an HSA is tax-free if used for qualified medical expenses. It’s like having the best features of a Roth IRA and a Traditional IRA.

To take full advantage of this benefit, you will need a plan that allows you to invest the money in mutual funds. (You should remain conservatively invested if you may need to draw on them in the next few years.)

Of course, an HSA does not replace ordinary retirement savings, which are needed for non-healthcare expenses. But it can provide a great supplement; it may be especially attractive for high-earners who have maxed out contributions to other retirement plans.

The maximum that can be contributed to an HSA in 2019 is $3,500 for an individual and $7,000 for a family.

Compared with a standard plan, premiums are typically lower but deductibles are higher.  Employers may make the high-deductible option more attractive by contributing to an HSA on behalf of their employees.

High-deductible health plans in 2019 require a minimum deductible of $1,350 for an individual and $2,700 for a family. Maximum out-of-pocket expenses (not including premiums) are $6,750 for an individual and $13,500 for a family. (Side point here – but a big caveat – is that out-of-network expenses do not apply toward the out-of-pocket maximum in any health plans.)

All in all, an HSA can be a great way to keep your finances healthy in retirement.