Inside Washington's Headlines

by Michael Granger

Capital Access Forum

Inauguration Day, January 2009


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A change of the guard

If we had to pick the most used word in 2008, it would have to be change. Barack Obama ran on change as it applies to the old order of politics in the United States. So when we think of 'change' in the Obama context, we think of Americans crossing the color line and electing the first African American as President of the United States; it also means moving to the left of the Bush Administration. This in every respect is a profound change and has sent a sheaf of political shock waves globally. As the nation comes to terms with this historic event, it would be a mistake to look at this only in an inter-racial context.

By looking at it in the inter-racial context of a black man being elected to run a majority white country, we are missing a profound change in the intra-racial dynamics of the black community. The campaign and the election ushered in a changing of the guard from the civil rights epoch to what some are calling the post-racial epoch, the consequences of which are spring-loaded and ready to explode. This change has to do with those in the black community for whom Obama’s victory is bitter-sweet. They feel that Barack Obama’s election as president, while historical, portends a rough road ahead in the fight for social and economic justice.

The Obama team ran a deft campaign in which he was able to have his cake and eat it too. What do I mean by that? Well, say you ran as a candidate who largely stayed away from black issues, unless they were broad issues that also crossed racial lines, and at the same time ran as an African American. His campaign basically offered credit to the American citizenry for electing a black man while demonstrating and promising to not be a black president and all that it implies.

The vast majority of black people did not believe that he would actually be elected and were skeptical up to November 4, despite the many polls that showed him winning. It is also fair to say that even though many whites are surprised that he pulled it off, they were generally more optimistic than blacks about Obama winning. In fact, until the black community came on board prior to the Southern primaries, Obama was borne largely by the strength of white supporters.

Lack of faith in the system

This reflects a lack of faith in the American political system that is endemic in the black community. It also reflects the resistance to change by the old guard in the black community who did not and may still not believe that he represented an authentic black candidate. In fact, some of the mistrust had to do with the overwhelming support he was getting from the white community and the fact that he did not seem to embrace the bread and butter civil rights issues. Opinion leaders such as Cornell West had much to say about Barack Obama before the election, including saying that “he has got folks who are talking with him who warrant our distrust.”

To understand how blacks really feel, we have to assume empathy that is rare in this rough and tumble racially charged country. But the empathy has to go both ways. Whites wish to move rapidly to the post racial America because the vast majority of them believe in a color blind society free of divisive racial politics. Blacks, on the other hand, are not ready to move to the post-racial America envisioned by whites and indeed Martin Luther King, Jr. The truth is, we have a difference of opinion about the criteria for a post-racial society to exist. The facts that Obama received such historically significant support from white voters and did not campaign on uniquely black issues, causes some blacks to be skeptical. And as he reaches out to the broader American populace with his appointments and other political acts, he further exacerbates the situation.

A murmur of "I told you so," if he is not careful, could turn into a chorus of dissent. Justified or not, this possibility will require his attention. Why? Because the black community could turn out to be an indispensable base in the inevitable dark hours that plague any presidency. You could not ask for a more loyal base than the African American community, as President Clinton found out when he was impeached, and as Governor Blagojevich knows all too well. It is also a community with as enormous capacity to forgive those with whom they have legitimate grievances, the segregationist Governor George Wallace, for example. This means they are quite capable of getting past the harsh, racially motivated treatment of the past.

All this is to say that managing his black base cannot be outsourced because it requires his delicate political touch. So despite the overwhelming and incomprehensible tasks he has before him as president, he cannot escape managing this particular transition. He needs to at once persuade African Americans to join the first echelon in the ranks of American citizenry and bring them along with him.

Michael Granger is a pioneer in working to provide capital to minority and underserved businesses. He coined the term domestic emerging markets to recognize the emerging businesses in the U.S. economy that lacked access to capital. Mr. Granger's areas of expertise include private equity investments, analysis of technology companies, buyouts, and growth acquisition transactions. Mr. Granger has been an active private equity professional for the past two decades, focusing on acquisitions for investment purposes and integration of businesses. Since 1985, he has worked with Cigna Venture Capital and Xerox Venture Capital, before founding his own firm, Ark Capital Management in 1992.

He also served four years of active duty in the U.S. Marine Corps during the Vietnam era.

Granger earned his B.S.E.E. from the University of Massachusetts in 1982 and an MBA from Dartmouth College's Amos Tuck School of Business Administration in 1985.

He is also Founder and Chairman of the Capital Access Forum, a Chicago-based company designed to improve access to capital for emerging entrepreneurs. Under his leadership, the Forum has had four successful conferences, bringing private equity firms and entrepreneurial companies together. His publications include: Case Study on Hospital Management Companies; an editorial piece in the Wall Street Journal on Capital Gains Tax Reduction; and a Study on Venture Capital Opportunities in the Telecommunication Industry (Tuck Today Magazine). In addition to serving on a White-House panel of industry leaders convened by the President's Chief Economic Advisors, Granger has also actively participated in numerous other boards and commissions.

He is among the earliest supporters of President-elect Barack Obama.

There are ways to make this task of managing his relationship with his black constituency easier. The first recognition is that blacks cannot feel marginalized during this historic presidency. The Congressional Black Caucus should still be viewed as an asset and not pushed to the side because the president has their issues covered, or he thinks that he needs to keep his political distance less he alienates those further to the right. He must fully engage the black community as part of the solution to the country’s problems.

It would be a mistake to think that blacks cannot be part of the solution at every level of the Obama must artfully address the age old issues of economic justice and problems in the legal system. In doing so, he can begin with the federal government and how it handles doing business with small and minority businesses, the life blood of the U.S. economy. After all, small businesses create over 80 percent of the jobs in the economy, but cannot afford to spend millions to lobby the government.

It is too early to tell how Obama is handling the changing of the guard from the civil right leadership to the post-baby boomer generation of blacks, but one has to be optimistic that he will perform brilliantly if he follows his instincts. He is a brilliant politician and a likeable personality and people from all walks would like to see him succeed, and not merely for self-interested reasons.

Clawing his way

And it is not that he just fell from outer-space and became president. He understands what it is like to be black in America like anyone else. First, he was not born with a silver spoon. He had to claw his way to even where he was as a state senator just six years ago. Few people nationally understand that, as qualified as he was, six years ago Obama was like any other black professional seeking higher ground.

In fact, not until his election to the U.S. Senate, did he join the ranks of the black elite in Chicago, composed of mostly business people who have done relatively well. Prior to that, had he the sponsorship, he would have been happy to be considered a candidate for a state-wide office other than U.S. Senator. So it’s not that he was identified as a favorite and showered with money and favors. For example, at the outset of his run for the U.S. Senate, I was active in a group of black business people who came together and held a fund raiser for him that netted $50,000. This was at that time the largest fundraiser he had ever had. With that background, his sensibilities ought to be highly tuned to the hopes and dreams that African Americans harbor.

Even those blacks who understand and expect him to balance his ethnic interest with the interest of the populace at large, have a sense that they deserve redress. Finally, people feel there is real hope of becoming a full citizen in every respect. They feel that there is nothing they cannot do and no place that they cannot go. That is a great feeling to have. Through his agency, America is experiencing a divine uplifting of spirits, even in one of the historically worst economies. It is thus in mutual embrace that he and the old guard will make a smooth transition to a post-civil rights America.


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