The government raced to save huge private banks after their managers took wild risks with other peoples’ money. Billions in taxpayer dollars have been thrown at the problems caused by these people with little or no accountability. Nevertheless, we’re still being asked to trust those who have proven they either can’t be trusted or are incompetent to restore our economy.
Meantime, small business - the real engine of the American economy - has largely been left to fend for itself. The 2002 census counts more than 50 million businesses in the U.S. The vast majority of these have fewer than 1,000 employees, generating trillions in revenues and employing tens of millions American workers. Sadly, most of these small businesses are suffering today because of the irresponsible actions of a relatively small number of Wall Street wise guys.
While many of the entrepreneurs who own and operate small businesses directly support the middle class, little has been seriously proposed to assist them. In fact, the large bank I used to do business with, one that accepted TARP money, is actually exploiting the poor economy to extract extra loan fees from small businesses like mine.
If President Obama and the congress truly want to help the middle class, they will do something significant for small business owners and do it quickly. The Small Business Administration is the place to start. Contrary to popular belief, SBA loans are not easy to obtain, they are not cheap, and they come with miles of red tape.
Congress should direct the SBA to fast track low or no interest credit lines for established small business owners commensurate with their credit history and revenues. These loans would be made to any small business with demonstrated proficiency. The only stipulation on these loans would be that a small business owner must use the money to support other American businesses or to retain or hire American workers.
The SBA already has the offices, bank relationships and personnel in place to administer such a program and monitor the use of these funds. The money would be used by small business owners to acquire or upgrade equipment and services, expand operations, hire workers, maintain payrolls, pay expenses, buy advertising, and so on.
The benefits would be enormous and immediate. A machine shop owner in Georgia could keep her workers on the payroll to help the company retool. A trucking company in California could lease a new American made big rig and hire an American driver. An independent hardware store in Florida could do more advertising in the local newspaper to attract customers. These are all small examples, but multiply them by 20 or 30 million and the economic impact is profound.
Taxpayers would win because most of these loans would be repaid to the treasury. Here’s why: Successful small business people in America, by and large, are far more prudent and responsible than the banking hot shots who created the economic meltdown.
To small business people, money isn’t some abstract figure on a spread sheet. It's their life blood. Most know how to conserve cash and how to spend it wisely. Small business people are generally cautious, knowing that a careless misstep can have catastrophic results. Employees are not numbers, but living, breathing human beings crucial to the small business owner’s success. They understand real reward is the result of hard work, honest dealings and, most of all, accountability. Small business people are woven into the fabric of their local communities, contributing to the greater good by providing employment and benefits while supporting other local businesses. In short, small business is America.
Contrast this outlook with the attitudes we’ve seen on Wall Street and it is clear that small business owners are the better bet for getting our economy back on track.