Small Business and the Presidential Election

The role of small business in the presidential elections was brought into the national spotlight with the mention of “Joe the Plumber” during the last presidential debate. Mr. Wurzelbacher was referred to 26 times during the discussion that evening. You would think that small business would become a major component of the economic policies of each candidate based on that debate and the follow up references thereafter.

Below are links to the websites for John McCain and Barack Obama that refer to their positions on small businesses.


http://www.johnmccain.com/Issues/JobsforAmerica/smallbusiness.htm

http://www.barackobama.com/issues/economy/#small-business


I am going to let their own words speak for their positions. I will add my editorial opinion that both websites seem to be lacking in substance. There are some in depth issues that concern many small business owners that are not being addressed sufficiently.

I will also add my opinion that both campaigns spend more time talking about the other candidate’s economic policies rather than their own. I am sorry, but I don’t want to hear from John McCain what is wrong with Barack Obama and I don’t want to hear from Barack Obama what is wrong with John McCain. I want to hear what substantial policies each candidate will implement to help small businesses bring innovation to the marketplace.

Yet I am getting off topic and I want to focus more on what our leadership should be doing for small businesses. If I were given the opportunity to help either campaign, my positions on small business would focus on these issues:

• Capital Access – Making sure small businesses can get funding to implement a solid business plan. Almost all innovation in the marketplace comes from small business and innovation has risk. Banks can’t shoulder the burden of too much risk and maintain profitability. I will compliment the government, especially the SBA, for developing some good programs to make financing more available to some businesses. Still, there are flaws in the system and it is time for the US government to develop a 21rst century plan that provides not only more access to capital, but a better due diligence system that limits the risk..
• Technical Assistance – I am not saying this because I am one of the government’s technical assistance providers. I am saying this because we still have not done a good enough job of helping early stage entrepreneurs understand that developing a successful business goes beyond having a good idea and vision. It requires operational expertise, marketing expertise and financial management skills. We still have businesses getting government backed financing that do not have effective business plans with functional budgets and forecasts. These business owners need to be partnered with better mentors who can help them develop the best practices that have been utilized by those who have achieved success. Our resources have been too focused on theory and we need to get more practical technical assistance programs out there for small businesses. This would include developing a more involved direct mentoring of small business owners receiving government backed financing.
• Procurement – The government, at Federal, State and Local levels, spends trillions of dollars each year to operate. While small business owners do have the opportunity to bid on some contracts, the processes in place are archaic and do not provide a level playing field for the average small business owner. If I had the opportunity, I would develop a more streamlined process for bidding and managing procurements to provide greater access to small businesses.
• Regulatory Streamlining – Regulations are a necessity and I am not talking about deregulation here. The problem is that we have not been strong enough in providing the technical assistance for small businesses to get the answers on how to follow regulations properly or cost effectively. If the government is going to develop regulations, they should also develop the technical assistance to make it easier for businesses to comply with those regulations. Talk to just about any small business owner and you will find a disdain for some government agency because of their confusing regulations or permitting requirements. Most of these agencies have been guilty of creating a culture of non-compliance by being ambiguous in what they want and ruthless in their pursuit of perceived offenders. By creating regulations with clearer instructions and better technical assistance, we can foster better compliance. We need to change the government paradigm from being a regulatory police force to a compliance enabling force.
• Healthcare – Most small business owners want to get healthcare for themselves and for their employees. The problem is that the costs of healthcare are not only prohibitive, they are unpredictable. It is impossible to budget for the steep increases in healthcare costs each year. I know this is an area where both presidential candidates have offered very different solutions. Unfortunately, neither solution addresses the true problem (in my opinion). I wish I could offer an alternative solution, but I just don’t have one. I will say that the common denominator in both plans presented, and the major flaw in my opinion, is they see the problem as making healthcare plans more accessible. That solution will fail, as it will only drive up the cost of healthcare, because demand will become higher. Economics states that as demand increases, so do prices (if supply stays constant). And it is the same simple economics that is the problem we have to address. Healthcare has an inelastic demand. That is, people want to live, so they pursue healthcare. Here in is the problem. The demand is so powerful, people will pursue it whether they can afford it or not. So the suppliers (healthcare companies and healthcare providers) don't get paid in those situations. If this goes unchecked, it will effect their ability to stay profitable and continue supplying healthcare. Our society needs healthcare. Demand is growing, because our population is growing (not to mention, living longer) and that demand is inelastic. Like it or not, capitalism and inelastic demand don’t work very well together and that is something that a lot of people have trouble reconciling.

So I’ve identified my concerns for small business. I would invite other small business owners to comment and address issues that concern them. I would really like to stay away from getting into a debate between candidates. Let’s make a decision for who we want and accept the fact that other people are entitled to have differing opinions.

In regards to my opinion, I obviously have some social leanings that can't be hidden in the editorial contents of my posts. I also used to own a bagel store just outside of Wasilla, AK where Sarah Palin would stop by on occasion. She really is a quality person who is intelligent, charitable and dedicated to public service.

Unlike most people who offer their opinions, I find both candidates and both of their running mates to be quality individuals who have shown dedication to serving this great nation. I don't agree with all of their opinions, but I appreciate their commitment to make this country a better place. I will conclude with the true gem that came from Joe the Plumber when asked about his presidential choice. He said, “It's between me and the button I push.”