Last week Reed Hastings, CEO and Founder of Netflix, committed $120m to black colleges. Today he has earmarked 2% of NFLX’s $5b cash, or $100m, to be deposited into black owned banks. Naturally, any rational person hearing this might think “what the fuck is going on here” and maybe there is something to that certain degree of skepticism. But the idea here is to liquify black owned banks who cater to black owned businesses in order to supply cash for growth.
Whether those loans turn out to be well performing is another question.
In the first step in allocating that money, $25 million will be moved to a new fund called the Black Economic Development Initiative, investing in “Black financial institutions serving low and moderate-income communities and Black community development corporations in the U.S.,” the company said.
In Tuesday’s blog post, Mitchell and Alwyn said, “19% percent of Black families have either negative wealth or no assets at all, compared to only 9% of White households, according to the U.S. Federal Reserve. … Black banks have existed to fight this for generations, spurring economic growth by extending credit in often underbanked communities. But they’re disadvantaged in their access to capital, especially from large multinational companies, when compared to other banks.”
All are equal, but some are more equal than others. Perhaps Netflix can reexamine all wealth distribution in America and attempt to remedy the dislocations by depositing large chunks of their cash into those community banks. I understand the native people of America are some of the most financially repressed, as well as the latinos.
We look forward to seeing NFLX’s cash diversified across a wide spectrum of colors and away from the traditional big box banks that have proven to be stable and reliable over the centuries.
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