[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[Extensions of Remarks]
[Pages E1464-E1465]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        WHO'S MANAGING THE MONEY

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                           HON. LOUIS STOKES

                                of ohio

                    in the house of representatives

                         Tuesday, July 22, 1997

  Mr. STOKES. Mr. Speaker, the Summer 1997 edition of the Cleveland 
Branch NAACP Update contained an interesting article about the role of 
African-Americans in the money management industry. In the article, 
entitled, ``Who's Managing The Money,'' Kevin A. Carter and Tony 
Chapelle take a closer look at the number of minorities in investment 
guidance positions.
  Carter and Chapelle's article provides data concerning an apparent 
lack of African-American money managers, as well as figures showing 
that the bulk of African-American dollars are spent outside of the 
black community. Because of these realities, Carter and Chapelle stress 
the importance of African-Americans being employed ``in money jobs'' 
and knowing how to ``leverage their purchasing power.''
  Mr. Speaker, I found this article to be very informative. ``Who's 
Managing The Money'' reminds us of the hurdles still standing in the 
way of African-Americans achieving economic freedom and financial 
independence. I commend Mr. Carter and Mr. Chapelle for writing such an 
excellent article, and I wish to share it with my colleagues and the 
Nation.

                        Who's Managing the Money

                 (By Kevin A. Carter and Tony Chapelle)

       After viewing the movie Jerry McGuire, and the Academy 
     Awards Ceremony, most African Americans are familiar with the 
     Cuba Gooding, Jr. quote ``show me the money.'' As an African 
     American athlete, Gooding's character (Rod Tidwell) has 
     remained as Tom Cruise's (Jerry McGuire) only client after 
     Jerry is fired from Sports Management Incorporated. Rod wants 
     Jerry to ``show him the money,'' or negotiate a long-term 
     contract with the Arizona Cardinals. While the movie 
     illustrates several valuable lessons about life, it also 
     highlights one disturbing reality of African American 
     existence--African Americans do not ``manage the money''--
     even when they are the principal product or service.

[[Page E1465]]

       In the movie, Jerry is a white American, and no African 
     American sports agent is identified at any segment in the 
     movie. This inequity is reflected in real life. While African 
     American athletes amass billions in wealth, less than 10% 
     have African American agents. This inequity is also reflected 
     in your daily life! By the year 2000, African Americans will 
     earn $500 billion a year in income. Unfortunately, Black 
     consumers typically spend 93% of their money with non-Black 
     companies. Our current $400 billion dollars in purchasing 
     power is only being channeled into approximately $30 billion 
     in revenues for Black owned businesses!
       This inequity of ``who's managing the money'' is reflected 
     throughout the financial markets.
       African Americans represent less than 2% of all the 
     investment consultants in the country. Importance: Where will 
     you obtain your investment guidance?
       There are only 37 Black investment managers with discretion 
     over portfolios at majority-owned institutions (either asset 
     management firms, or major pension funds). Importance: Blacks 
     at white firms usually have access to more resources--more 
     frequent and larger trading commissions for minority 
     brokers, bigger donations for community organizations and 
     more chances to bring in Black interns.
       In 1996 only 5% of the money management firms hired by 
     institutional money managers were minorities. Of that amount, 
     African American money managers only managed $1.045 billion, 
     or one-and-a-quarter percent (0.025%) of the money invested 
     by these institutional money managers. Importance: Growth in 
     investment accounts is not paralleled by a growth in business 
     for African American securities companies.
       Of the over 7,000 mutual funds, seven African American-
     owned companies now offer a total of twelve mutual funds to 
     consumers. Six of the twelve funds were started within the 
     last 12 months. Importance: As stockholders, pension fund 
     managers have an important voice in the hiring, purchasing 
     and operations of American corporations. A voice that could 
     be used to better conditions for African American, and other 
     minority, workers.
       According to the most recent statistics available from the 
     U.S. Equal Employment Opportunity Commission, African 
     Americans comprise only 8.8% of the securities and 
     commodities brokerages and exchanges and 11.7% of the 
     insurance agency and brokerage industry. Importance: Growth 
     in the financial services industry is not reflected in 
     growing employment opportunities for African Americans.
       Why should African Americans focus on who's managing money? 
     Because savings and the accumulation of wealth are the 
     engines which drive industrial production and economic growth 
     in this country. In America, savings are redirected into 
     business equity and debt that creates new plants, products 
     and jobs. The economic strength of a community (and a 
     country) is determined by what it produces in goods and 
     services, not by what it consumes! If African Americans are 
     not employed in the ``money'' jobs, or leverage their 
     purchasing power, the capital markets will not be used to 
     address African American concerns and issues.
       So don't always assert ``show me the money,'' ask ``who's 
     managing the money!''

     

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