you know all these, indiana, west virginia i mentioned. each and every one of those 11 states, each and every one of them has declined as a share of the u.s. economy. >> let me ask you. >> some of them by a lot. >> art, do you think, though, that there is a farmer a and there is a farmer b. but if farmer b is black, are there some built-in disadvantages? how can economists factor that stuff into your model? >> well -- you can factor it in. you can isolate for different effects there is statistical ways of doing that. but let me tell you what i did propose many, many years ago. i moved to the university of chicago. and i was a young faculty member there. i joined the faculty in '68. the first thing you notice when you're on the south side of chicago is you're not a majority anymore. and you notice all the black ladies going up to the suburbs in the morning on the trains and all the white men coming down and getting off, and you quickly see a problem. i wrote something which some of you may have heard of called "enterprise zones."

this is a macro top down. what i propose in the inner city in my neighborhood, i live in south shore, that in my neighborhood there be no payroll tax, there be no income tax up to a certain level you. get rid of the teenage minimum wage. these kids don't go to prep schools like i did. they don't go to yale like i did. they don't go to graduate schools like stanford like i did and got my mb and then ph.d. these kids to earn above them and earn a wage, they start right out of high school. they aren't worth the minimum wage. they won't be hired because they're not worth it. after being unemployed for a couple years, they become unemployable. after being unemployable for a couple of years, they become hostile. and then you have to spend a fortune protecting yourself from these kids. look the stats that you put out here. black teenaged unemployment today. do you realize how long that's been going on? that's a macro-economic program. that's not a family problem. that's not a capital access program. this is macro-economics that is

killing a community. >> right. >> and these kids will never be allowed back into the mainstream. they're lost. six years. a kid 16 years six years ago is 22 today, not had a job. what do you do? you need to change the top first. to get the snake, you got to doesn't its head off. you got to go right at macro-economics federal, and then state and local, and then on down, and then you can work on the micro ones, but i would beg you, charles, please, please put first things first. >> all right. thank you very much. you know, it's interesting you say that. in spain, which is a real gigantic welfare state that is obviously in a lot of problems right now. and the reason our market has been under a lot of pressure. of people under 30, 1/5 have never had a job. which illustrates what art is talking about. the smart ones are leaving and the others are depending on government aid.

toya, according to percentages, about 7% of the total. what they make is only 0.05% of the total. what are the specific challenges for these black and minority businesses? >> so there are a number of challenges. but many of them have been mentioned. advocacy, the access to capital, contracting, entrepreneur training, chamber development, those are our five pillars of service. and we know that capital has been a barrier to entry for many of our businesses. and some of the ways that we are addressing that is through our national footprint. so we have 107 chambers, 20 states, 240,000 small businesses that we're supporting across the country. and we understand that in order to have successful black communities, you have to have successful black businesses. and in order to have successful black businesses, you have to have successful black chambers with strong leaders that are equipping them with the tools to be successful. so one of the ways that we are addressing these challenges is with our upcoming school of chamber management there has

been a lot of conversation today about education. and we understand that our leaders have to be educated. so those that are in the field, you know, responsible for connecting with the business owners, we're going to be training them around our five pillars of service to help them be better leaders. and so with the new tools, they can go back into their communities and provide them with the relationships that they need. so some of the business owners, they don't have -- when you're trying to meet payroll on a day-to-day basis, and you're out in arizona or you're in austin, texas, you don't have time to keep up with what is going on in d.c. on capitol hill. so we try to educate them, put out a monthly president's message that lets them know what is going on, keep them educated, keep them informed so they can make better decisions. >> thank you very much. congressman west? >> before we get too far, i think one of the important thing that dr. laffer brought up, there has to be a synergy with the public sector, a synergy

that goes from the federal level to the state level to the county level down to the local municipality that enables to have the -- there may be a top-down planning, but there has to be a bottom-up refinement. because that's the closest level is government down locally. and what the federal government is doing, you know, in my little 18 months that i've been here, we're pushing too many unfunded liabilities and mandates. >> sure are. >> down on the states, which then in turn go down further to the local level. and we're the ones that are causing the dry-up as you say of the capital and the opportunity. so i think what is most important for us here at the federal government level is go back and understand what are our right and proper roles under our responsibilities. we're getting to the point we're micromanaging down to the lowest level. and if we really sit back, and that is bun of the things i harp on, if we really sit back and look at how do we reduce the size and scope of the federal

government, then that's less what farmer a has to provide to come up to here to go back down to farmer b. so at the local level we can do a lot more. and then you're putting capital back in people's pockets so that they can go out and invest locally. you know, small businesses are suffering. and if i'm right, that's 80 to 85% of the economic engine of the united states of america. but we're crushing them. the national federation for independent business has said in a survey about a couple of months ago only 8%. only 8% of small businesses are looking to grow and expand here within this next year. so i think that it really starts with the tax code reform that hasn't happened, the regulatory reform, the right type of legislation that aligns us with our roles and responsibilities here. and we got -- the federal government is getting too big. we cannot do everything for everybody in the united states of america from cradle to grave. we just cannot. and as i said, we are looking at the growth of a welfare entitlement state. i'm not talking about medicare,

medicaid, social security. that's mandatory spending programs. but i'm talking about the fact where if you can sit at home and get more largesse from the federal government than someone who is actually going out and working hard, then you're disincentivized people to go out and work hard, which means what? you cannot grow businesses because they won't be able to have anyone out there to work it. one of the big problems we see when we go back down into the district is that people who are looking to be paid under the table in cash so they can continue to get the unemployment benefits from the federal government. and remember, once upon a time, unemployment benefits maxed out 26 to 27 weeks. the federal government made a decision to take it to 99 weeks. that's counterintuitive to the free market and getting people working again. so, you know, we've got to create that synergy through the levels of government. and, you know, i'd like to hear, you know, the perspectives from my brethren at the state level and also at the county level about how we're affecting you all. >> let's do that. representative bernard, how are

we impacting the state level? >> well, first of all, i get to see it from -- i represent district 84 in florida. and ruth jones is a city manager in one of the cities that i represent. and district 84 is kind of like one of those sprawling districts. it includes, like, rivera beach, west palm beach. if you go out to the western part of the district, it includes belle glade, poe hokie and south glade. hearing some of the unemployment is 6%, if i had that in my district, i would be jumping for joy. in bellglade, pohoki and south dade, the unemployment is 14%. i get to see it from a different perspective. when i go to tallahassee, there is a lot of rhetoric about what is right, what is left and everything. but me, what are we doing to create jobs, and how can i bring back jobs to my constituents.

and so that's the reason why sid on the investment and banking an economic development so we can change that whole area. one of the things we're working in the district is we're bringing something called an inland port to the glades community where with the ex- -- with the widening of the panama canal, we're going to create an inland port would create 10,000 jobs out there. imagine if you have 10,000 jobs in an area with over 40% unemployment. sitting on the business and consumer affairs, what i do is i work on -- we have something called a black business investment corporations. we have about eight of them in the state of florida. and in the past 25 years, the bbic as you would call it, they have loaned about $20 million -- they have received $20 million from the state government. however, they've loaned over $90 million in 25 years.

and that's -- that's a model that is, you know, i think it's -- >> are those empowerment zones? >> no. >> no? >> this is a bank. >> the actual bank. >> they're actual banks. and one of the things that -- what i do is i make sure that the bbic gets funded. houfl, however, some of the regulations that i've seen coming from the legislative body just to prevent them from lending money. so what i want to do is make sure that they're able to lend money and lessen the government regulations that are in tallahassee. another issue that i've worked on is the state small business credit initiative. that's the ssbci. and where the state of florida recently landed $90 billion to land money to small businesses.

before the state of florida received that $90 million, $49 million were already allocated to other programs. and in the remaining, we tried to get to some of the black business investment corporations and the hispanic businesses and we have not been able to get any of the dollars. so from the state level, you know, congressman, what we want to see is that we -- if these moneys are coming from the federal government, that they can get to the small business investment, get to the bbics, because they lend money out. because i'm having a lot of problems where we're not able to get those money to the bbics. and even the nonprofit cdfis, we're not able to work with the federal government in terms of the nonprofit cdfis. >> the money is coming, but someone is hijacking the money? who controls the purse strings there? >> the sbacs is competition.

they're going to be to lend money to the small businesses. and the bbics, they're no good. >> so $90 million is al le indicated. >> the sba is stopping them. we have lawsuits out there. it's the sba. circumstances that right, representative bernard? >> i just want to get the money. i'm not trying to sue them. >> and congress -- >> i will take that up. since i'm on the committee, i'll take that up with administrative. >> congress means well, but they politely ask for opinions and referrals from the sba. and sometimes i think that stands for stop black africans. >> but to the point about sba, i mean sba has been very intentional lately about creating innovative products to get more money flowing. we should give them some credit for the community advantage

loan, the 7-a, the 7-js, the 054s. >> it would be great if they were competitive, if we had a competition to poor money into the black community. >> the loans would drop. they have dropped by the sba. >> let's go to ashley bell. first of all, you're very young. you're dynamic. you have already changed parties. you hit with a splash. you're the commissioner, district 4 commissioner georgia. you've heard what we talked about here today, the challenges, what can be done. on a more localized level to help black businesses. >> i tell you, there is no clamoring for any more regulation. i tell you that. there is no one looking for additional regulation from the federal or state level at the county side. what i heard dr. laffer mention as far as empowerment zones, at the local level, we try to create those. with take the opportunities given us by federal government to create empowerment and opportunity zones. but the problem is there are so many regulations on where they can be. it took us at hall county about

two months to figure out well, we knew where we wanted them to go, but they didn't fit the federal regulations on where they thought they might go. but i tell you, we would know better where to put the empowerment zones than the federal government would. >> right. >> so many times we're missing out on opportunities because they look at us in a schematic of census tracks, but they don't see the faces of the people we see every day looking for jobs. and they tell us that, you know, we have to move the empowerment zone five miles this way. but we know five miles the other way there is a business waiting to come. so for us we don't see it in terms of black and white. and i'll be honest with you. to have more race-based regulation is not the way to go. i think to have more race-based regulation, it says that we teach in our schools that one child will have a different outcome than the other. we can't legislate outcomes. you can't pass a law to say that one person is going to have a better outcome than the other. and i think our parents and the teachers that are teaching our kids every day see that we're in a different america now.

and the last thing we need to do is go back to a segregated america where one child is treated differently than the other and expect them to act differently when they get older. >> [ applause ] >> what would you say to those who say that, but the world you're talking about does sort of exist there is sort of a built-in disadvantage if you will with the current school systems. so maybe this utopian world that you might see doesn't exist just yet. >> i don't say it's utopian. i they is america. i'll say this. you have a problem, but that problem exists at the local level there is nothing the federal government can do to change -- to help create the best social program that we've ever seen. that's called the family. that's called a man and a woman and children living within a household there is nothing the federal government can do to change that. so from my perspective, at the end of the day, you know, we have to go back to the basics. we have to educate our children on what it means to start an enterprise. i've owned my own business since i was 21 years old. >> right. >> and i never came looking for

the sba or anybody else to help me start it. >> hold on a second, hold on a second. >> yeah, i want to respond to that. not in the sense of saying that there shouldn't be any -- that everything i advocated was based on race. but i would argue that the reason we're here today and everybody here is black except or the young lady up there. >> all right. >> you're right, you're right. go ahead. [ laughter ] >> well, now he is red. >> he spent some time with james brown. so don't worry about it. >> he hung out on the south side of chicago. all right, all right. the reason we're all here talking about this is tied to one thing and one thing only, and that is race.

otherwise we wouldn't be here. and so i'm not saying -- what i'm suggesting is this country was built on a controversial issue of race and race discrimination in the form of slavery. and we have existed for over 200 years with that psychosis as part of our lives. and unless we are willing to talk about it and address it, because i will say this emphatically, and that is like farmer a and farmer b, it's simple. if i'm running at ten miles an hour and there is somebody ahead of me running at 10 miles per hour, i can guarantee you i will never catch them. now i'm not asking you to slow the guy down running at 10, just help me run faster. >> lyndon baines johnson. >> right. so when i look at a society that

says sandra day o'connor said when they had the case on the question should you have set-asides for an african-american who won a contract in denver to install guardrails, there is no compelling federal interest to do that. now i will make a case at some point if you take the growth of the hispanic population and you take the growth of the african-american population, there will be a compelling federal interest to answer the question how long can we as a nation exist when minority unemployment is double that of white unemployment. it's been that way throughout my entire life. and i have been extremely successful in business. but i recognize that the problem inherent in black america is not lack of commitment to care for ourselves, not work ethic, not integrity, not transparency, not a desire to live in a two-parent

household, none of that is endemic and built in our dna. but i will tell you what is built in the dna of america is a history, chronic history of institutionalized discrimination and race discrimination. >> no doubt. >> and unless we resolve that, we will be here when congress west is a senator from florida, having this same -- >> what about president? >> having this same debate on the issue of race. but i don't want to -- >> actually, a quick retort, because i want to get everybody else in too. >> well, i respect your definite success. you're definitely an american success story. >> without any set-asides. born in mississippi. >> exactly, exactly. >> go ahead. [ inaudible ] >> okay. >> because believe in me. >> but the government didn't invest in you.

>> i think the government should be a tax system to cause the private sector to invest. the government does that all along. there are research grants. there are programs for capital appreciation tax specific. there are all kinds of investment and all kinds of things that the government does. what i'm advocating is the government uses tax policy, as mr. laffer nose. you can use tax policy to have tremendously different outcomes. >> absolutely. >> and all i'm saying is government should use tax policies to impact the african-american community. the question is it fair to white americans who feel that they should be discriminated against because they didn't do anything to cause a problem. >> absolutely. one second. let me do this, guys. hold on one second. >> no white is ever made better off by pulling a black down.

and we want prosperity amongst the black community, period. >> everybody wants prosperity for others, except when you say can i take an extra 10 bucks out of your paycheck. that's when the debate comes. listen. d.j. jordan, you're in a small business committee. let's talk about that a little bit. the inherent hurdles for a black business versus a white business. what are they and how pronounced are they? >> well, the issues for small businesses are pretty much the same no matter what color your owner is across the nation. a lot of them are having access to capital issues like mr. johnson said, a lot of them are having issues with tax. but one of the biggest issues that we are seeing is uncertainty about future federal policies that will impact their businesses. >> this is for all businesses? >> this is all business. so you're seeing them held back. but for black businesses specifically, i think the reason you're seeing less small businesses is the education component first and foremost. how do i start a business.

where do i go to access the capital. what is an angel investor. where can i go to get venture capitalists investment. those are some of the issues. and we're beating up on sba today. but i have to give props for sba for one of their main focuses, and that's entrepreneurial development. they offer free advice in their partnerships with small business development organizations and score centers which stands for service core of retired executives. and there are private partnerships all over the nation that a lot of black entrepreneurs have no clue about it. i'll give national urban league props as well because they're working with some of these centers to be able to provide free education to anyone who wants to start a business. >> d.j., what about in the house? because we keep talk about education. it seems like we start with adults. congressman west talked about his father and what he taught him. the richest man in the world, carlos slim came from lebanon. his family came from lebanon to mexico.

virtually had no money, but his father was an accountant. so he would give him an allowance, something like five pesos. he actually made him keep a journal on how he spent this money. this is the richest man in the world today, an emigrant to another ucountry. he started at a very young age. is there something going on the house, we're talking about education, but the 21-year-old who never had a real interest, and it's hard to kindle that. at what age can we push this down to really make it almost sort of second nature? >> first of all, the first place it needs to start is the home. and that's already been said before. >> that's been said. >> basic financial literacy and principles need to be taught at home. >> if your mom doesn't know about it, then, we're talking about policy. we're talking about government intervention. at what point should they say okay we want the school systems. >> the biggest civil rights issue we have right now is education in the inner city. and the fact of the matter is that children, middle school,

high schoolers, in the suburbs in wealthier communities are not getting the same education as they are in the urban areas. one of the proposals that are out there in the house are voucher programs. so that low income parents, a single mother can take their child out of the school that they're in and put them in a charter school or put them in a private school and things like that. that offers a lot of opportunity to a lot of especially single mothers whose -- there may be a father that is not engaged. and they basically don't have the same access to the education as the white suburban child would. >> thank you. congressman west? >> you know, i taught high school for a year after i retired from the military. and that was such an enjoyable experience, i volunteered to go back to afghanistan. [ laughter ] this is one of the things that i've always been an advocate of. you know, public/private partnerships. you know, we need to get the private sector. well need to get local

businesses to come in and taught the practical application of the theory that is being taught in these schools. i think it would be great if you got cpas that would come in and start teaching math classes, or things of that nature. or people such as plumbers need to come in and start teaching kids about geometry and angles and things like that. what you end up doing is if a kid is doing very well in that class, guess what they can do over the summer? they get an internship, apprenticeship. instead of going and hanging out, now they see how they can apply the skills they learned. now you're incentivizing them to go back and work even harder in class. because possibly when they graduate high school, if they don't go off to college, they may be able to get that job with that private sector, that local small business who came in and gave some of their time to that school. and what we ought to do at the federal government level then, we need to be able to track that and provide some type of tax incentive. for the businesses that decide they want to come in and volunteer in schools two or three hours of the week and teach that practical application.

so i think that's a very important thing that we need to have to do is start promoting the public/private partnership. once upon a time we used to have wood shop. we used to have automotive, all of these things that taught kids how to do stuff with their hands. and for whatever reason, we stopped doing that. you got to be a pretty smart guy to be on a pit crew for nascar. >> and on top of that, sir, you can't outsource those jobs either. >> i want to bring kay in, though, kay alford, because you guys are doing things internationally. i know that's really big on, high on your agenda. do you think that we need to sort of the policies that we're talking about here using the tax code to effect some sort of change, that maybe we're not even thinking large enough? maybe we can think bigger and larger outside this box? >> yeah. i think that doors that are closed to us here in the united states are open to us around the world. and in july there is a delegation of 100 coming from

botswana and they're bringing their businesses to talk to our businesses so we can see where joint ventures, where mutual interests can coincide. and then in november, we're having our pan african entrepreneurs conference, and people are coming from all over the world to see what contracts we may have, contracts they may have to work together. >> where are these conferences going to be and the date? >> they're going to be in atlanta july 19 through the 21st and november in houston, 19 through 21st. >> if i may? >> sure. >> there is a pattern among our larger members, $500 million and above. that pattern is solid family roots, multigenerational, well educated. and two of our larger contractors, construction managers, hj russell and smoot together are building the new museum in this city, $550 million project for the

smithsonian. two black construction managers are building that, and three black architects. [ applause ] >> sure. >> and mr. alford brought up a great point. he said one of the trends is multigenerational, which when you talk about tax policy, when you look what we're about to do with death taxes, take it from 35% to 255% bracket, drop the minimum exemption from $5 million down to $1 million, once again, that's the federal government not incentivizing growth through multigenerations. we are doing things that are counterproductive to one of the most important trends you see. that's why we got to go back to the drawing board up here. >> guys, i want to kind of throw this out generally. from a business perspective, the empire state, which is one of the federal reserve niches in this country, they do a survey every now and then, and they talk to businesses about problems that they have. and, you know, i respect robert johnson for so many of the things, where everything he has succeeded.

but some of the things he said today kind of go against what this survey said there is a gigantic spike. and some of the problems with black employment and maybe perhaps stopping black entrepreneurship that i think are pretty solvable, and it's not by the way just black, this is across the board. but punctuality is a gigantic problem for businesses. interpersonal skills was a gigantic problem for these businesses. and only advanced computer skills outranked them as being problems when it comes to hiring. so we have talked about education and things like this. but what about the idea of just getting people accustomed to going to work in general? what kind of policies can be put into place that sort of promote basic work skills and then entrepreneurship after that? anyone have any ideas on that? >> rosey grier and i did a lot of work together in california. rosy greer took these little classes on just how to put your pants on correctly, how to wash your hands, the speech patterns. it really was important for the kids that came out