ABSTRACT
Racism is more often manifested in the efforts of government that target minorities for preferential treatment. Such affirmative action policies produce no gains for blacks, but they generate great resentment among whites. White-owned small businesses, claimed former presidential candidate Patrick Buchanan, lose sales revenues because of race-based government procurement policies known as minority "set-asides." The chapter aims to studying how the US Small Business Administration (SBA) has administered a racially targeted program, the Minority Enterprise Small Business Investment Company (MESBIC) program, from its inception to its defunding by Congress. Faced with the uncertain and unstable funding situation created by the SBA, the MESBIC industry shifted its focus to attracting more private capital, as did the Small Business Investment Companies (SBIC). One of the great attractions luring small business investment companies to form and seek charters under the MESBIC program in the 1970s was the promise of cheap matching funds from the SBA.
