The economic collapse at the end of 2008 was a major problem for the major world economies, not least of all the economy of the United States. Britannica terms the 2008 crash the most dangerous economic crisis since the Great Depression of the 1930's. Yet even though these times were times of dire economic hardship, black business owners stepped up to the plate and shouldered the burden that others were unable to. While the American economy is still in its recovery stages after the economic collapse, these businesses have shown their dedication to ensuring that America keeps growing and striving towards greatness. But how exactly did these businesses provide support for the economy to get past its darkest hour?
The economic collapse happened with a bang. People woke up one day and everything was falling apart around their ears. The Economist presents, as data, the collapse of the housing market as a partial push towards the collapse of General Motors in December of 2008. AIG faced a similar situation, resorting to offering as much as 80% of its equity to the American government in exchange for a bailout deal, according to Investopedia. What brought about the fall of these giants of innovation and commerce is still hotly debated today, but the fact remains that at the end of 2008, these massive companies, were floundering, searching for any sort of help they could get. Naturally, the black community stepped up to help them in their hour of need.
The Federal Reserve and US Treasury, firmly aware of how devastating those two companies going under would be to American morale and the economy on the whole, decided that they had to do something about the situation. Through negotiation with businesses such as Loop Capital, Williams Capital, and Castle Oak Securities, the government managed to build credit that they could then use to bail out these companies that were floundering and seemed on the brink of collapse. The $50 billion bailout that the government offered to GM resulted in a controlling share of 61% being offered in exchange, making the government the majority shareholder of the car manufacturer.
Loop Capital was included in those companies that sought to deal with re-financing the debt of companies like AIG and GM after the collapse. The redistribution of shares from the Treasury Department and their work resulted in them being chosen as one of the two smaller members of the underwriting syndicate that was chosen for this purpose. According to Reuters, underwriters of the sale of shares from Citigroup managed to make $US42.3 million, showing exactly how lucrative such a position could be for skilled and qualified individuals.
Black entrepreneurs make up a much smaller portion of the total set of entrepreneurs in America. In 2012, the Census Bureau’s snapshot of American businesses put the number of black-owned businesses at around 9.4% of the total number. So small a number could make such a powerful impact on an economy bodes well for black entrepreneurs. African Americans have taken heart at this growth and with each passing day more businesses are being launched by black owners. It is a powerful signal to the wealthy that equality is in the offing.
While minorities make up a small part of large financial companies in the country, Loop Capital is a testament to how good it can get. Black investors have shown time and time again that they are willing and able to help the country be a prosperous place, if only they are given the chance. If anything, this shows that the black community is a major contributor to the prosperity of the country and should never be discounted. While a minority in big business, the black community is a fertile soil for the growth and development of new ideas that can change the face of America. Without companies like these, the country's economy could well be floundering in an even worse state today.