‘Racism and the Economy:’ Past may hold ideas for equitable policies for future
By David Pendered
President Nixon’s playbook to promote Black business formation may be as good a place as any to begin today’s effort to devise policies to address racism in American capitalism, according to the keynote speaker in a series convened by Atlanta Fed President Raphael Bostic.
Bostic didn’t respond specifically to this particular point. But in his remarks to close the Federal Reserve’s sixth program in its series, “Racism and the Economy,” in the June 2 segment titled, “Focus on Entrepreneurship,” Bostic offered this observation:
- “A subtle thing went through the discussion, but I want to make it more explicit. This isn’t a partisan issue. A number of the speakers noted that, in Republican administrations and Democratic administrations, this issue of entrepreneurship in minority communities is something that has been of particular interest and importance. This is an ‘everybody’ issue. We all need to lock arms together, move forward and make progress on this.”
Carmen Tapio, a Black business owner, has seen the disparity firsthand. In her presentation, she told of how Omaha banks refused to process her Paycheck Protection Program loan during the pandemic, even though she’s anything but unknown in her city – Tapio’s peers chose her to serve as 2023 chair of the Greater Omaha Chamber of Commerce.
Meanwhile, it was Robert Weems, Jr., a scholar on Black business history, who offered the suggestion to review policies of the Nixon administration. Weems holds the seat of the Willard W. Garvey Distinguished Professor of Business History, at Wichita State University.
Weems’ point wasn’t that Nixon’s ideas were particularly elegant. Some have been strongly criticized for dismantling concepts advanced in the Great Society reforms of President Johnson’s administration.
Rather, Nixon’s programs and policies were among the last to arise from the civil unrest of the 1960s and were followed by 50 years of relative stagnation, Weems contends. Given the span of time since Nixon fulfilled a 1968 campaign promise to foster Black capitalism, by establishing in 1969 the Office of Minority Business Enterprise, Weems offers the following suggestion in his essay written to accompany his remarks at the seminar, “Making a Way out of No Way: The History of Black Business in America:”
- “The national interest in black business development, associated with the first Nixon Administration, is a faint, distant, memory in today’s America. Yet, many African American enclaves continue to be areas of economic stagnation and underdevelopment.
- “Consequently, in the context of there is ‘nothing new under the sun,’ contemporary policy makers and entrepreneurs might be well-served to revisit some of the substantive dialogue and action plans generated a half-century ago.”
Carmen Tapio brought forward the lived reality of structural inequality and racism in the marketplace. She couldn’t get a bank to process her Paycheck Protection Program loan in 2020 for her then five-year-old successful business and its staff of 425 employees.
Tapio is founder of the largest Black-owned business in Nebraska, North End Teleservices. It provides call center services for state, federal and commercial clients. She said in the seminar that her personal credit score is a perfect 850. Tapio’s both the incoming (2023) chair of the Greater Omaha Chamber of Commerce and a 2021 appointee to the board of the Federal Reserve Bank of Kansas City’s Omaha Branch, according to her profile posted by the Kansas City Fed.
Despite these credentials, Tapio couldn’t find a bank to process her PPP loan during the pandemic. Even the institution she’s used for 32 years for her personal banking needs turned her down, she said.
“I got a pat on the head: ‘Love what you’re doing. Love what you’re doing in the community. But we are going to process the loans of our large customers that have existing banking relations with us, (A), or (B), lines of credit,’” Tapia said.
This year, when Tapia sought a $10,00 line of credit with that 32-year banking relation, she said she was summarily denied with no explanation. Tapio didn’t stop there:
- “The issue escalated to the top of the organization. Conversations happening around it. And a lot of apologies.”
Note to readers: “Racism and the Economy” is a landmark, 11-part series started by the Federal Reserve Banks of Atlanta, Boston and Minneapolis and now sponsored by all 12 Federal Reserve Banks. Atlanta Fed President Raphael Bostic has spoken at all six events, including the kickoff presentation and at discussions of employment, education, housing, the economics profession and, June 2, entrepreneurship. To view past seminars and learn about the series, click here.