Saturday, June 22, 2024

EYE ON BUSINESS: For the truth, look beneath the surface

Is the Obama administration an ally of black business?


Ernest Fountain is CEO of New Ventures Capital Development in Las Vegas.

As a people, we will not be able to fully participate in and enjoy the fruits of this country’s prosperity until we begin to understand and practice the principles of capitalism.

We have to stop being tricked by the puppetmasters in politics, having been misled into believing that Democrats are for us and represent the interests of the poor. Well, I beg to differ — just based on the numerous administrative actions implemented under their control and executive orders signed by the president since 2009.

In 2009, when President Obama appointed David Hinson as National Director of the Minority Business Development Agency, his first directive was for all the centers across the country to focus on minority firms whose revenue was $1 million or more. At that time, a 2008 study showed that only 170,000 minority firms (about 4 percent) out of 4.2 million businesses generated over $500,000 a year. So to focus on the 1% that generate over $1 million a year is no different than what the Democrats claim the Republicans are doing — catering to the “top one percent.” Due to this directive, the centers are not supposed to provide services to anyone making less than $1 million a year. We have to create more black businesses, but this directive stagnates the growth of black firms.

Also, in 2009, President Obama signed an executive order requiring all federal agencies to sign a project labor agreement for all contracts over $25 million. This means that minority firms that do not employ union labor are not allowed to bid. The majority of African-American firms are not union because of the cost and requirements. In addition, the majority of trade unions do not consist of large number of black professionals.

The other major concern that we must focus on is the lack of black firms being approved by the federal government to participate as lenders or equity investors through all of its major funding programs. These comments are to open your eyes to the fact that the Democrats (who receive up to 95 percent of African-American votes), once in power, do nothing to create economic flow in the black business sector.

Since 1984, New Ventures Capital Development Company has been the only black-owned and -operated Certified Development Company approved by the Small Business Administration under the 504 program. During President Clinton’s eight years and under President Obama’s administration, there is still only one black firm out of 272 licensed under the program. Black businesses in this country still receive between 1-2% of financing under this program, since none of us are involved in the approval process. The Small Business Investment Company (SBIC) program has 350 firms — none are black-owned, and this has not changed under either administration.

Last is the New Markets Tax Credit Program (NMTC), which was created by the Clinton administration to provide capital to businesses located in low-income communities, as well as minority-owned businesses and those located in rural areas. Over $40 billion has been provided to 850 firms — and only three were black-owned. The funds are mostly being used to either fund nonprofits or lure white firms into our neighborhoods that make it more difficult for our firms to compete. Many are eventually forced to close. Loans and equity investments are not being made to businesses located in our communities, which results in our communities being filled with everybody’s businesses except ours. Once again: wake up!

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