Most mainstream American whites like to indulge themselves with the comfortable belief that we, as a nation, have long since conquered the ugly scourge of racism. That is why, when minorities complain of the racially-based challenges they continue to face, those complaints are often chalked up to hypersensitivity and dismissed. Sadly for them, the numbers tell a very different story, according to testimony at a hearing last week before the Senate Committee on Small Business and Entrepreneurship. All things considered, it was perhaps fitting, if coincidental, that the Senate Committee of Small Business and Entrepreneurship should have held a hearing on the obstacles faced by minority small business owners during the same week that civil rights icon Benjamin Hooks died. The hearing began with dry-as-dust testimony from two Administration witnesses, who gave Committee members to understand that the SBA was doing its best for minority business owners via their usual capital access programs and, particularly, the Microloan program.

Testimony from the second panel was much more compelling; Ranking Member Olympia Snowe (R-ME) called it both “startling” and “disturbing.” Witnesses on that second panel told stories of discrimination faced by minority entrepreneurs seeking both debt financing and equity capital that some might have been inclined to dismiss as paranoid imaginings. Those accounts were corroborated by data collected by Dr. Robert Fairlie of the University of California at Santa Cruz. According to his most recent research, even when controlling for every other conceivable variable that might get in the way, minorities are still consistently denied financing, or denied as much financing, or charged higher interest rates than their white counterparts.

Most of the emphasis during this hearing was on growth-oriented minority-owned businesses, since everybody on Capitol Hill is still preoccupied with job growth and unemployment rates in minority communities is well over 16%. There was a lot of talk about larger loans and helping minority entrepreneurs gain access to equity capital and, toward the end of the hearing, Chairwoman Mary Landrieu (D-LA) noted that she and Ranking Member Snowe intended to loom large in the drafting of a third jobs bill. However, given the emphasis placed on growth-oriented firms at the hearing, it seems unlikely that any legislative solutions they offer will be of much use to minority-owned microbusinesses.