Money moves with Ernest Fountain
Money will come and it will go. The question is where are you? Ernest Fountain, chief executive officer of New Ventures Inc. and The Nevada Minority Business Enterprise Center, shares money insights in a “changing” economy.
BI: How will African-Americans survive our economic crisis today as we have done in the past?
Fountain: We need to remember as black people that our economic situation is different now than during the time of segregation. During that time we were forced to do business with each other. Our money was circulating in our community for a longer period of time because we had no choice but to do business with one another. Even during the 1930s Depression, the infrastructure black people had in place was different because we had our own businesses and we employed each other. It was easier for us to deal with the change in the economic climate. Today’s economic climate makes it more complicated to overcome the problems we have. Only because we don’t have an economic structure in place and we are not deliberate about doing business with one another now as in time past. I think we will see more black business fail because of our current situation. If the news media is talking about Wall Street and the capital markets being dried up because the business sector does not have access to capital. You can imagine what kind of problems black businesses are having because we have never had access to capital. Even in good times. The major impediment black businesses have in this country is still access to capital. That is why we will suffer more now than are ancestors did during segregation. What we are hoping for in the economic stimulus package that is proposed is that minority business participation is not forgotten. Some of the $850 billion, which includes the Department of Transportation and improving the roads, the bridges and the infrastructure of the country; minority businesses get a piece of the economic pie. The only way the stimulus package will help minority businesses as a whole is for President Obama to sign an executive order that dictates that all federal contracts have at least 10 percent to 15 percent minority contracting participation. That way we will get our fair share of the $850 billion. If this does not happen, minorities will continue to suffer in the areas of procurement and contracting opportunities with the federal government. Right now, there seems to be no articulation in the stimulus package for minority businesses.
BI: Are you planning to lobby in Washington to bring attention to this issue?
Fountain: Yes, we have sent out formal correspondence to all our congressional representatives expressing the importance of strengthening the Minority Business Development Agency. For the last 20 years, there have always been attempts to dissolve the Minority Business Development Agency. The agency has played a major role in helping to assist minority businesses in this country.
BI: Why should it be a concern for the average African-American who does not own a business to keep our minority businesses strong and operating?
Fountain: The average person might not realize that everything is interrelated. All components of our economic structure work hand in hand. That is why when the construction industry has a problem, the manufacturing industry has a problem. When the manufacturing industry has a problem, the retail industry has a problem, and when the retail industry has a problem, then individuals have a problem. This is because the retail industry affects employment. Most people don’t realize that there are about 4 million minority businesses across the country that creates about $661 billion in total revenue and employs about 4.7 million people. Think about it. The president is talking about creating 3 million jobs in the next three years. That sector already employs 4.7 million people, so if you see demise in the minority business sector then that will increase unemployment. Most minority businesses do hire minority employees. Majority businesses usually hire majority people. For example, if the automotive industry fails there are a lot of businesses that fail. We are all in this together.
BI: What is your advice to black people as it relates to putting our money in banks we are not sure will survive this economic crisis?
Fountain: I think we have to keep our money safely in banks. The FDIC has increased the insured amount to $250,000 (and $500,000 for couples). I think it is still a safe place to keep your money. As it relates to investments, purchasing municipal bonds and purchasing bonds from private companies is the safest place to invest your money instead of buying stock. Even though, I do believe that certain stock should be purchased because they are at an all time low and the stock market will rebound. There is also real estate that you can buy now at a great price because when those prices come down then they can only go up. If you invest your money right, in five to 10 years it will turn into a good investment. In reference to banks, I think as black people we should do business with banks that do business with us.