Category Archives: Editorial

City Bus Stops: An Underutilized Force For Education


Users do not care about what is inside the box, as long as the box does what they need done. – Jef Raskin

By William A. Foster, IV

It was one evening some years ago that my father and I had a debate in my  parents living room about an article that I read in the New York Times concerning prep schools versus public schools and how much they spend per student. The New York Times stated that Philips Exeter Academy in 2008 spent $63,500 per student annually, while a report from the Organization for Economic Cooperation and Development shows that the U.S. as a whole spends about $12,000 per student annually. My father could not understand what PEA could possibly be spending over five times the amount on. I said to him it was the difference between showing a kid a map of India and taking them there. That being said, as someone who comes from a family of educators and being a community college professor for a period of time and seeing just what happens when an adult has had a weak K-12 experience, I often ponder ways in which communities can go about closing education gaps among groups and strengthening the education infrastructure.

Perhaps the worst kept secret is that groups who come from disadvantaged backgrounds have a chronic gap when it comes to education. By age three, children from lower income homes have heard 30 million fewer words. The national high school graduation rate for African Americans is 73 percent, which is almost 10 percentage points lower than the national average and 14 percentage points lower than European Americans. There have been calls for a universal Pre-K, which sounds good in theory but probably will ultimately do just as much harm as the current system. Many have argued that the U.S. does not spend enough on education, this despite the OECD saying that the U.S. actually spends more than any other country on education. The report according to CBS News that, “In 2010, the United States spent 7.3 percent of its gross domestic product on education, compared with the 6.3 percent average of other OECD countries.” This appears to be not a case of not spending too much, but spending it poorly. As an economist and investor myself, one of the most important things for my firm is capital allocation. It is not just a matter of how much we are spending, but where and how we are allocating that spending. Simply spending more is not always an answer to fixing problems as many on the political left suggest, but neither is allowing students to go to better schools through vouchers a sensible alternative as those on the political right suggest which would have devastating effects on the economics of poor and middle class communities. In essence, what is needed is a better creation of supplemental education for those communities. Supplemental education is the ability to access learning away from the four walls of a school.

For many upper income families, museums, summer camps, and private tutors provide the moonshot to the education they receive during their K-12 matriculation. These experiences and building blocks add to a substantive educational gap between the haves and have nots and while there are always many fascinating high brow proposals of how to fix education for underserved communities, we often ignore the simplest. Two things of note should be focused on to that respect. First, provide supplemental education where the people you hope to reach spend their time. Secondly, keep it simple. Academics, again I come from a family of them, while I admire their ability to convey information, they are at times too smart for their own good. In other words, they can make one plus one into the next coming of Einstein’s theory of relativity if you give them enough time. For underserved communities though it is often at the foundational level where they are most deficient. An issue that then cascades and compounds year after year as they progressed through secondary and then into adulthood. It was the simple foundation that they missed and that their kids are missing that could have moved their trajectory. So how do cities both meet the people where they are and more importantly where their time is “hostage” and and also keep it simple? Bus stops.

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That is right, bus stops. New York City has 16,350 of them, Los Angeles has 15,967 bus stops, Chicago has 10,813 bus stops, and Houston has approximately 9,000 according to a Twitter inquiry. These are the four largest urban cities in the United States of America with a combined population of 17.5 million, a number equivalent to 5.4 percent of the entire U.S. population. The four cities ability to serve low income and middle class families is obviously magnified just by the probability of the sheer size of the populations they have that will fall within those confines. The poverty levels for the four aforementioned cities is also surprisingly inversely correlated to their public transpiration size with New York City’s 20.3 percent, L.A.’s 22 percent, Chicago’s 22.6 percent, and Houston’s 22.9 percent. According to Pew Research Center, “Americans who are lower-income, black or Hispanic, immigrants or under 50 are especially likely to use public transportation on a regular basis.” There is not enough research to show a correlation to public transportation’s reduction in poverty, but one can access that the easement of which labor can move farther distances allows for more economic opportunities to be gained. Therefore, if a low-income community has access to affordable public transportation and their own community lacks economic opportunity, the ease by which they can move into areas of stronger economic prowess may allow them work opportunities they may not otherwise have available. However, while there maybe no correlation, there is opportunity to educate and we know that correlates to reducing poverty.

Imagine for a moment that each bus stop, both children and adults, are introduced to a digital screen (think those annoying “commercials” at gas station pumps) that circulates a plethora of vocabulary words, basic mathematics problems,  and science and history clips. Just the basics, but again fundamental. If a city really wants to get out of the box, even introducing lessons in financial, health, and government literacy. If done in concert with the school districts in the city, teachers at the elementary through college levels could be featured in these videos and those teachers targeted in bus stops within their teaching area. This may also go a long way into reestablishing what many now complain about as the broken bond between parents, their children, and the teachers who educate them. The videos produce a familiarity for the teacher in the same way that people develop affinities for celebrities they have never met. Of course, in this age where municipals are tight on funds, just how does all of this get paid for? This is a financial journalism publication after all. The PPP (Private-Public Partnership) model would be most advantageous. Companies in the city, New York City, Houston, and Chicago have 143 Fortune 1000 companies combined, would foot the majority of the bill for the producing of the digital content and refitting of the bus stops. Just what those companies would receive in return beyond goodwill and basic advertising would be left up to the leadership of the city to negotiate.

I grew up in a household and family where education and learning was not only a family value and expectation, it was something I was immersed in as I reflect in what seemed like at all times. There were always books around, much of my life existed on a college campus as my mother has been a professor for almost four decades, trips to museums, engagement with the arts, and as a result me and my sister’s probability of succeeding was given a great advantage over many of our peers. Education is a wholistic lifestyle that one is immersed throughout their lives. The sooner that immersion, the more often that immersion, then probability of success is sure to follow. My sister and I were at an advantage, we were a privileged pair whose family can trace our educational heritage back four generations to my great-grandfather and great-grandmother who were college graduates. That is not the reality for most low income and middle class families. They are families trying to take that next step, even if they do not know which step to take often. In order to increase their probability towards that success, cities have to acknowledge that they are often in poor schools to begin with and that they need more, much more. The best return on investment is often achieved in using the infrastructure that already exist and that meets citizens where they are.

As Jef Raskin alludes to in his quote, communities will not care where quality education happens be it in a school or at a bus stop, so long as it happens.  The ability to convert bus stops into head start and continuing education facilities for a city is something that truly does what needs to be done.

 

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Colin Kaepernick & Craig Hodges: The Mistake of 1947


“History shows that where ethics and economics come in conflict, victory is always with economics. Vested interests have never been known to have willingly divested themselves unless there was sufficient force to compel them.” – B.R. Ambedkar

Hindsight is 20/20. (Actual) history is not meant to be revised, but it is meant to be analyzed. Unfortunately, that analysis can prove to be difficult often because we have a tendency to romanticize people and their decisions, ultimately leaving us vulnerable to making the same ones again. Objectivity to history is fundamental if we are truly to learn from it.

Seventy years ago, Jackie Robinson took to the field for the Brooklyn Dodgers. The move would effectively mark the end of African American ownership in sports. It was almost forty years prior to Robinson’s MLB debut when Rube Foster, considered the father of Negro League Baseball,  made a bold move to organize the African American baseball clubs and increase African American franchise ownership. “As early as 1910, Foster started talking about reviving the concept of an all-black league. The one thing he was insistent upon was that black teams should be owned by black men.” In the era of Marcus Garvey, this was very much in line with the belief that African American labor should be rewarding African American ownership. After a few hundred years of African American (free) labor building much of European American wealth, this was not asking a lot.

In fact, when we examine the period of 1865 through 1939, African America was on a building and ownership spree. African Americans built towns, businesses, banks, hospitals, boarding schools, colleges, and even an automobile company. This period, it could be argued was the apex of African American wealth and self-sufficiency in this country. A Great Depression, World War II, and Civil Rights Movement later, and African America’s economic self-sufficiency was virtually wiped out. Replaced by a culture of dependency and chasing of others’ colder ice. And we have to ask ourselves objectively, what did that get us? Very little. We went from over 100 banks and boarding schools down to 20 and 4, respectively. The African American private sector has been so decimated post-Civil Rights Movement that the African American unemployment rate is always twice the national average. As for sports, we went from dozens of African American owners to taking almost seventy years before seeing one after Robinson’s move.

Today, PWIs and 140 of the 141 professional sports in America make over $30 billion annually off the labor and sweat of African American athletes. Jerry Jones, the owner of the Dallas Cowboys and most valuable American professional team, made $300 million in profits in 2016 – without taking a hit, while the highest paid African American athlete, LeBron James, made only $77 million. It is not a secret that you can own a team a lot longer than you can play the sport. Jordan serves as anomaly of sorts, being an athlete able to gather enough wealth to buy a team and that was after something of a fire sale by Bob Johnson, who was in desperate need of liquidity for his other investments. This was mainly thanks to Jordan’s deal with Nike, which for all intents and purposes his popularity built. But while Jordan is worth $1 billion, Phil Knight, the owner of Nike, is worth a staggering $25 billion. Phil Knight and his wife have been able to pump hundreds of millions of dollars into the University of Oregon thanks to the company that Jordan “built”. Meanwhile, Michael Jordan’s philanthropy has been virtually nonexistent in helping empower African America’s institutions. The reality is that as much as it seems like players are making, the value of those teams rise faster than the players’ salaries, otherwise what would be the point of owning them? Remember, George Steinbrenner paid $10 million for the New York Yankees in 1973, the team is now worth $3.7 billion. In terms of highest paid athletes for perspective, Dick Allen of the Chicago White Sox in 1973 was making $200,000 versus today’s highest paid athlete being LeBron James who makes $31 million(salary, not including endorsements). The value of the Yankees has increased 370 fold versus the highest paid athlete’s salary at 155 fold. Or as famed comedian Chris Rock so eloquently puts, “Shaq is rich, but the white man who signs his check is wealthy.”

It has only been in recent years that African American athletes have begun to reclaim their ability to be voices of social commentary after a long slumber from the African American athletes of the 60s and 70s who were regaled and revered by the community for their usage of their platforms for social, economic, and political progress. In the 80s, 90s, and early 2000s, most African American athletes were too afraid of scaring potential sponsors or getting blacklisted to remotely speak out. Those that did like Mahmoud Adul Rauf and Craig Hodges of the 90s who did speak out found themselves blacklisted from the NBA faster than Usain Bolt running the 100 meters. Both exceptional players in their own right, but their boisterousness about African American issues turned off white owners and fans who think African American athletes should be seen and not heard, something eloquently analyzed by William Rhoden in his book 40 Million Dollar Slaves. It has been even more complicated since the turn of the millennium when athlete salaries skyrocketed thanks to television contracts for the major sports. This was especially sensitive at a time when many Americans have seen their wages stagnant for the past four decades across the country. Despite the owners making far more than the players, the majority of fans do not know who their teams’ owners actually are or how much they pocket from the ownership of the team.

The only African American who even attempted to buy an NFL team was Reggie Fowler, an Arizona businessman who was set to buy the Minnesota Vikings from Red McCombs back in 2005 for $600 million. Without ownership, sports franchies often reflect their owners’ network which means they have been slow to include other groups not within their social circles in key positions of power. Everything from general managers, coaches, and executives of teams have been and still largely are white males because that is who the owners’ circles entail. The real power was and is behind the scenes and this is ultimately what was forsaken by African America when they did not demand that the Negro Leagues/MLB and Black Fives/NBA/ABA be mergers of equals instead of acquisition of labor. With no African American perspective in any owners’ meetings outside of the NBA (and Michael Jordan has always been socially oblivious), it is likely that these men (and they are 99 percent men) are often tone deaf to racial and gender issues that impact their leagues and the environments from which the athletes who constitute their labor come from. We see this especially projected in the NFL’s ability to deal with domestic violence and Colin Kaepernick’s decision to protest continued police brutality. This is why at one point, we suggested that one of the major sports leagues should be adamant about recruiting Oprah Winfrey to buy a team (or two). Instead, the NBA at a moment when it could have done so after the Donald Sterling debacle simply goes and puts in place the same old hat in an act of pure tone deafness.

What would have happened if Oprah Winfrey owned a team? Well, just look at her management team at Harpo Productions. Women are well represented and more importantly so are ethnic minorities. The likelihood is that her team ownership would result in many more women, minorities, and HBCU graduates getting an opportunity to be decision makers and that issues such as race and gender would not be simply public relationed when an incident occurred, but instead proactively engaged.

Ultimately, history has shown us what not having ownership brings about in terms of social and economic impact. It is creating a space that allows for an employee like Colin Kaepernick to speak about an issue that is also part of the owner’s reality and allowing him to do so without retribution. It is also the circulation of the economic capital that flows between labor, ownership, and communities. This conversation is by no means limited to sports, but all of our economic behavior as it relates to how we view labor and ownership. Being accepted as someone else’s labor will always leaves you vulnerable to their interest, which can run counter to your community’s interest. Jackie Robinson may have broke a labor barrier into the major sports for African Americans, but the decision also built a wall to ownership and power for African Americans we have struggled to climb over ever since.

HBCU Money™ Turns 5 Years Old


By William A. Foster, IV

In essence, I see the value of journalism as resting in a twofold mission: informing the public of accurate and vital information, and its unique ability to provide a truly adversarial check on those in power. – Glenn Greenwald

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Another year in the books. After a rough 2016, as it was for most of the world, HBCU Money saw its share of ups and downs and is glad to have made it to the other side. It is not enough anymore to just survive anymore, it is time for us to start striving, building, and succeeding. How we get to our destination though can often be as important as where we are going.

It is my belief and desire that HBCU Money be part of a new era in media. A new era that returns to its fundamental roots of journalism, where the desire to be first must take a backseat to being of integrity in the information we disseminate to the public. From those in media who are upstart blogs to global media companies, we all have a duty to be more than just a headline or to take a person’s words and twist them to fit our own agendas. People need a safe place to consume information, to consume different points of view, and that should be part of our duty as purveyors of information. HBCU Money will continue to be part of the landscape of integrity giving credit where it is due and presenting information that helps evolve our place in the world. There are hard questions that need to be asked, questions we may not even realize need to be asked, and much in between.

As the Founder and Editor-In-Chief of HBCU Money, it is my hope to one day to turn over the reins to someone who will take this company even further than I can dream. In the meantime, I will continue to ensure we set the proper foundation that permeates constitutional values so that everyone who comes to work here or reads our pages will feel connected and intellectually respected in everything we do. Thank you all for your support these past five years and we continue to look forward to your support going forward.

The 5 Steps To HBCU Athletic Profitability


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“Growth and profit are a product of how people work together.” – Ricardo Semler

HBCU presidents, athletic directors, athletic commissioners, and stakeholders gather around the camp fire. We are going to tell you a story of problem solving using critical thinking. Do not worry, this is not a scary story like the one you are telling your students and alumni currently. Many of you want athletics to be your legacy and are willing to mortgage every current student and burgeoning alumni’s future in order to see it come to fruition. Many of you think so far inside the box that Carter G. Woodson would probably blush at just how far you have taken his quote of controlling a man’s mind and how that control will make a man build a back door if one is not present. We even lie to ourselves that the door we have been relegated too looks like our neighbors front door just to suffice our ego. Refusing to even use the assets at your disposal like HBCU business schools, computer science departments, etc. to solve some of our institutions most basic problems.

You know what is not a basic problem? The $147 million that the SWAC and MEAC conferences are hemorrhaging were it not for the $142.5 million in subsidies that come primarily on the backs of their students. Even with those subsidies, the two conferences still managed a $4.6 million loss in the 2014-15 school year. Yet, the same playbook is rolled out every year to makeup for shortfalls. The infamous money games that alumni argue over every year as good or bad for their programs. Ultimately, athletic departments have made them part of their funding model usually in an exchange for treatment that would make Ike Turner blush. However, there is no plan and has been no plan seemingly offered by these HBCU athletic departments that would strategically some day let the money games be icing on the cake if they chose to play them instead of a vital necessity. There is always this talk of the players on the team wanting to test themselves against the “best’. The reality is they have no choice. Players do not schedule these games nor are they consulted. These games are scheduled by those that know if they do not play them, then there may not be an athletic department next year. There are five steps though that can allow HBCU athletics to actually make every program profitable: 

  1. Form the HBCU Athletic Association. Also known as the HBCU version of the NCAA. This is about ownership and leverage. Advertisers pay for schools or conferences that have large alumni bases, strong geographic footprint, and affluent alumni. Although HBCUs lack the latter, the former two is strong leverage when you approach corporate sponsors who are looking to get their brand in front of as many potential consumers as possible. There are 100 HBCUs that comprise geography in the Midwest, Southeast, and even Northeast if you included schools like Roxbury Community College in Boston and Medgar Evers in New York. The NCAA is able to make over $1 billion per year from the March Madness Tournament because it owns the tournament. Again, ownership matters. Having the HAA gives it a powerful economic scale that could go in and do something like buy the old Morris Brown stadium and convert it to a stadium, arena, hotel, and conference center that could host all of the major HBCU sporting events. Now, instead of getting almost nothing of the pie, HBCUs would have an opportunity to share in the parking, ticket, concession, and entertainment revenue pies that ownership over these facilities brings. Again, ownership matters.
  2. Drones. Okay, not just drones, but drones, cameras affixed to athletic facilities, and a website and app that you can purchase a monthly subscription for $10 per month just like Netflix that gives access to every HBCU sporting event for your alma mater and a special up charge for Classics. All of the computer science and communication majors that HBCUs have this seems almost like spiking a beach ball for a score. Put a camera in every corner of the stadium, arena, and field so that it can be remotely operated during a game to show every team’s games. Use drones, they are $99 or build your own, to highlight special views during the games or matches. Get a website and app built that allows people to view it anywhere at anytime. For sports like football, there is an additional charge for professional scouts, which can be a whole other package – a more expensive package.
  3. Conference Endowments. This could be done tomorrow and the fact that it has not been done is sad, really. HBCUs are stronger together than apart. A lesson that Florida A&M University learned the hard way when they tried to make the jump out of the MEAC to FBS. Wherever we go we must go together. With that said, it would make so much more sense if an athletic endowment was set up for each conference that could be equitably split among all the schools. Instead of each department trying to raise money independently, they share the common expense of doing so in hopes of reaching a larger audience. Conservatively, the MEAC and SWAC need an athletic endowment of $3 billion to produce the amount needed to ween themselves off of subsidies from their student population. All those golf tournaments by HBCU boosters that each school puts on could certainly assist in the greater good more so than the robbing Peter to pay Paul model our athletic departments currently exist on. It also provides a real vision – like the church building fund – that there is a goal and this is the result of that goal.
  4. HBCU football and basketball playoffs. This ties back into number one and ownership. HBCUs are forever trying to be the Cinderella story. Moments like North Carolina A&T beating Kent State, Grambling almost beating Arizona, or Norfolk State’s run in the NCAA tournament in 2012 where they reached the Sweet 16. You know what is better than being Cinderella though, getting paid and being profitable. An HBCU football playoff and basketball tournament is an opportunity to have a postseason, hold recruitment and marketing of high school students in cities, and again, own more if not all of the revenue. An eight team playoff from the four major HBCU conferences (SIAC, CIAA, SWAC, & MEAC) that starts the week after Thanksgiving and conclude on New Year’s Day at the HAA owned Morris Brown Stadium, hotel, and conference center. The playoff games themselves could be held in major cities that are geographically and expense friendly to the conferences, but also allow for exposure and recruitment. This is true for the basketball tournament as well. A 16 team (or 32 if you want to invite HBCUs not in HBCU conferences) basketball tournament held in cities like Chicago, New York, and other major basketball hotbeds that give exposure to our schools for future recruitment and a chance to create events we own around them that generate revenue only helps the bottom line. This is not limited to just football and basketball, but every sport. Events bring us money and using HBCU playoffs extends our seasons and extends the ability for them to generate revenue from the populations the events are held in.
  5. Black Owned Company Sponsors. When one hears how much HBCUs get paid by non-black owned corporate sponsors or in their money games it is utterly insulting. How someone treats you is a clear sign of how they feel about you and it is clear that the companies we receive sponsorship from currently think very little of our alumni as potential customers. Have you ever heard of Aliko Dangonte? He is the wealthiest man in Nigeria and owner of the Dangonte Group, which has interest in cement, sugar, and flour. Ventures Africa reports, “In Zimbabwe, Strive Masiyiwa, the founder of telecommunications giant, Econet Wireless, spent a reported $6.4 million setting up a trust for African students at Morehouse College, a historically black institution in the United States.” A sign that HBCUs are on these African entrepreneurs map. Why not approach them and their companies? The Dangonte Stadium, Arena, or Athletic Complex has a nice ring to it. It gives them an opportunity to expand their brand globally and to expand into the holy grail that is America.

Athletics is certainly an important part of the social experience of college and HBCUs, but it is not worth the burden to a people who are already trying to close a wealth gap that is sixteen times greater than their counterparts and are graduating with higher student debt loads despite HBCUs being cheaper on average. Instead of eliminating sports though or just subsidizing ourselves to death, there has to be the question of how do we make them an asset. Not just socially, but financially. There has been talk that the Power 5 conferences will eventually break away from the NCAA and super conferences come up every year in conversation. HBCUs have the opportunity to be ahead of the change curve, lead the change curve, and shift the paradigm instead of being reactive to it or simply mimicking our counterparts behavior after the fact. If we are going to be in a box, at least let it be a box we own and control.

Guy Kawasaki & Stanford Reminds African America Why HBCUs Are Needed Via Instagram


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After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time. – Daniel Kahneman

They say a picture is worth a thousand words. If so, then the aforementioned picture should be a thousand words about why HBCUs are African America’s best opportunity for access and opportunity. Unfortunately, the logic the past 60 plus years when a picture like this has surfaced is that African America must try harder or do better to gain access or that even presence of one or two of us is success.

The picture itself shows Guy Kawasaki, one of Apple’s early employees who is now a Silicon Valley angel investor, and an engineering class at Stanford University. Stanford is without question one of America’s premier research universities ranking eleventh with almost $1 billion annually in research expenditures. It is the university that laid the ground work for Silicon Valley itself to come into existence as well as being the environment that produced Google. Sergey Brin and Larry Page, Google’s co-founders, met there while studying computer science doctorates. Stanford also has one of the country’s largest endowments  with $21.4 billion – an amount that is ten times all 100 plus HBCU endowments combined just for perspective. Yet, despite this treasure trove of resources the school’s demographics (see below) do not even come close to matching the African American population in the state of California (7.2 percent) or the country (13.2 percent) as a whole.

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African America does not seem to truly understand the value in investing in its own institutions as other groups seem to in their own. We often do what is best for America, while other groups do what is best for themselves. HBCUs still produce the majority of African American professionals in America. In the engineering field alone, HBCUs currently produce 40 percent of African American engineers (see below) while only constituting three percent of America’s colleges and universities. The value of these institutions is unquestionable, but that value is not marketed or conveyed consistently to African America so that the community truly understands the value and importance of the opportunities provided through the institutions existence, the opportunity they provide, and why they need more attendance and financial support from African America itself.

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HBCUs themselves must also continue to build their programs. There are new fields of engineering to explore. Fields like bioengineering, space engineering, and other emerging engineering disciplines must be offered. HBCUs must think beyond just the basics of chemical, electrical, and mechanical engineering. Premier HBCU engineering programs like North Carolina A&T State University (see below) truly are at the forefront of this expansion and other HBCU engineering programs must forge ahead. They must also continue to expand their research on the graduate level. Research among the top 20 HBCUs constitutes only $450 million in research expenditures, again while a university like Stanford does almost $1 billion alone. Much of the true innovation that happens in the US and around the world happens at the graduate level where the intellectual cream meets. There is no reason that the brightest minds from HBCU undergrads should have to leave the HBCU ecosystem or miss out on opportunities because our graduate schools are an after thought of leadership. We need our intellectual capital to circulate and remain within our ecosystem.

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The next Google, Facebook, or Microsoft lies within an HBCU engineering department. Perhaps it will be HBCU engineers that will help put the first African country on the moon, Mars, or beyond as they once did for NASA and America. HBCU engineering departments may come together and create our version of Silicon Valley. Whatever the future holds, as Dr. John H. Clarke said, “I am saying what ever the solution is, either we are in charge of our own destiny or we are not in charge.  On that point we got to be clear, you either free or you a slave.” A picture is worth a thousand words, but we only need to remember a few, the power to be free is in our own hands, hearts, and minds.