Equal Opportunity Equal Outcome

The virus has exposed larger fissures afflicting this country, as communities of color have suffered disproportionate death, sickness and joblessness. Robert Smith, the richest self-made AfricanAmerican, with a net worth of $5 billion, had already been focusing on creating more opportunity for young blacks, most famously by wiping out the student debt of Morehouse College’s class of 2019 in the commencement address heard ’round the world. Watching April’s clumsy PPP rollout—the first $350 billion tranche gobbled up within days by the bigger, better-connected companies that knew how to play the game—infuriated him.

In the three weeks leading up to the second tranche, Smith looked for a solution. The core problem: PPP money had been channeled through the Small Business Administration’s electronic system—a system only the major banks could access. “Seventy percent of African-American neighborhoods don’t have banks,” Smith says. Even if they did, Smith estimates that some 90% of African-American businesses are sole proprietorships lacking the clubby bank relationships that helped usher larger clients to the front of the line.

So Smith went where these small entrepreneurs access the financial system—credit unions, minority depository institutions and more than 1,000 community-development banks—and paired them with the larger institutions that had access to the SBA clearinghouse. The greatest software-industry dealmaker of his generation, Smith used one of his fintech companies, FinAstra, to create a patch, and then sent a personal plea to the 30,000 chapters of the National Council of Black Churches to let those previously shut out know they too had access to this lifeline. During the PPP’s second tranche in May, 90,000 loans were processed in this manner.

Not every barrier has an altruistic billionaire willing to ram through it, though, which helps

explain why so many, especially Millennials and those in Gen Z, have soured on capitalism’s 21stcentury variant. If the current system doesn’t offer them equal opportunity to succeed, promises of more equal outcomes will carry the day. For younger generations to experience America as the land of opportunity, the root inequalities need to be ripped out—now.

That starts with the education system. Getting into college once offered a ticket out, a near-sure path to the upper middle class. Compare today’s debt-laden and rightfully cynical college graduates with the returning heroes of the Greatest Generation, America’s most upwardly mobile, largely courtesy of the G.I. Bill. Service-for-college proposals suddenly abound anew, most notably in Michigan, where Governor Gretchen Whitmer has put forward a “Futures for FrontLiners” initiative that will provide a tuition-free path to a college degree or technical certificate for those who performed essential services during the pandemic.

Even without government intervention, the Invisible Hand is doing its own work. For this entire century, colleges, serving a customer base that could tap endless wells of guaranteed loans, had little incentive to mind costs. With virtual education immediately made universal, the genie is out of the bottle. “A lot of issues can be changed here,” Milken observes. “Do you really need $50,000 a year to get a quality experience?”

Answer: no. For the first time in over a generation, higher education will be subject to market pressure—the need to provide a better product at a lower price. “The economic model for education was broken,” says former Babson College president Kerry Healey, who now oversees the Milken Institute’s Center for Advancing the American Dream. Healey predicts that onequarter of smaller colleges will ultimately merge or cease to exist. That’s entirely healthy, and overdue. The survivors will have to provide that first rung on the ladder of the American Dream: a college degree with less debt, a clearer path to the jobs of the future and training opportunities for everyone, not just 18-year-olds.

The same dynamic is playing out in America’s other bloated behemoth, health care. Like online education, telehealth has moved from future theory to universal reality in a matter of weeks. Good experiences will translate into rapid adoption, and the results are almost preordained: higher reach, lower costs. Should the paradigm not just shift but be broken, it will reduce another stress point for middle-class America.

The key as we emerge from the coronavirus nadir: permanently baking these playing-field levelers into the system. That’s the focus for Smith as