All Talk, No Substance; No Plan: McCain and Obama Turn Their Backs on 23 Million Small Business Owners

Why aren't the presidential candidates addressing the needs of Main Street? How can the Wall Street fat cats get away such shameful negligence and mismanagement? How can they have their butts saved by a $400 million bailout by Washington as small businesses get a big fat zero, while Senators Obama and McCain stand idly by, saying nothing?

A recent study found that more small businesses filed for bankruptcy in April than in any other month since the new bankruptcy laws took effect in 2005. Filings were up 49%, according to a report by Jupiter eSources, which monitors court records. For the whole year ended April, 2008, 93,096 businesses and individuals went bankrupt, and I'll lay odds that that number has been rising exponentially over the summer, especially among small business owners. But you don't have to read a report to see the writing on the wall. Business is down and it's sinking fast.

This is all just in time for the presidential candidates to start making promises about a brighter future. While Obama and McCain split hairs over flag pins, the ambiguity of national security, who has the crazier friends and who has the better commercials, 23 million small business owners are in crisis. Last time I checked, their votes counted too. Why isn't anyone addressing them?

It could be as simple as it seems. The candidates have yet to lock horns on this issue because neither one has a clear comprehensive plan to help the hard working Americans who struggle day to day. They are turning their backs on the very real concerns of millions of voters. They don't even have any members on their staff with small business expertise. This amounts to a substantive disregard for the needs of small business owners. It's a travesty.

With entrenched interests so pervasive in Washington, willful ignorance is only to be expected from these quarters. But I was hoping and expecting two politicians running for office on the platforms that they are championing the needs of the little guy to do a lot better.

Sure, both candidates pay plenty of lip service to the problems facing small business owners. Each has their sound bites, which they hope will become a catch phrase that will captivate the masses and reel them in. But what's the game plan? No one seems to know for sure.

McCain recently spoke of small businessmen and women, referring to them as, "The engine for economic growth in America." He also correctly acknowledged that small businesses create the majority of new jobs every year. In an April 10 speech to small business owners, he obligingly praised those in attendance for their hard work and ingenuity. He provided a cascade of platitudes to the audience on hand. It was all very nice. And useless.

His were the kind of generalities that made for good political theater. In fact, standing in front of a German sausage shop or wandering the aisles of a mom and pop grocery store seem to be McCain's favorite photo op. Too bad he offers no details on how he is going to help them. Nothing -- not a notion, a suggestion, a blueprint or a prediction. It was all talk...as usual.

This tactic reminds me of the fortunetellers who speak in generalities hoping to connect with their customers. They say what the desperate want to hear and move on before they catch on! You can't entirely blame McCain though. He's admitted he doesn't understand the economy very well so how much can we expect him to do anything about it?

Senator Obama's stance looks slightly more promising, in that he sort of has one. But is it an Obama Burger - all bread and no meat? Last time I checked, Obama had no small business experience. (Then again, neither does McCain, Bush, or any key figure in Washington.) Obama speaks of cutting health care costs, improving access to capital and investigating innovation and development. But his tax credits will not encourage small businesses to offer health care and will only help the biggest and wealthiest of these enterprises. Meanwhile, what he fails to mention is when, how, and how much is it going to cost? This specious stance makes for great speeches but comes up short in the substance department. Still, I commend him for at least addressing the issue, however vapid his ideas might be. At least it's a start.

Now if the politicians ask me (and I wish they would), the first thing the country's small business industry needs is a $25 billion economic stimulus plan. Not next year. Not in 100 days. Now!

Washington must legislate that credit lenders loosen their guidelines in order to allow small businesses more capital. This in turn will allow them to flourish, which in turn provides more income to be circulated back into the marketplace, which in turn keeps the economy on an upwardly mobile path.

This isn't as radical as it may seem. Wall Street tycoons get to borrow at 2.26%. Why not the small businessman? And if Obama is serious about all those innovations, he can begin with more programs that place successful small business owners in a position to teach those starting their business how to navigate the inevitable pitfalls.

It's so simple you may wonder why this plan isn't already being put into place. The reason is due to lack of representation. Small businesses don't have lobbyists to lean on Washington bigwigs and wine and dine the fat cats in order to sway resources in their direction. They're too busy working to make payroll, paying back bank loans and flat out trying to stay afloat in a dwindling economy. They've been surviving on scraps and it's time to turn things around.

There are other solutions, all of which can help. Government should move to require banks to expand small business loans and quadruple the Small Business Administration's operating budget to $ 3 billion annually (five times the existing budget, which is a joke). The new administration must make sure it keeps its word and awards money by recent court rulings. It can also provide aid to businesses owned by minorities and women (a more likely scenario under an Obama administration). Another solution would be to create a program which encourages college students to work for small businesses.

Government agencies dedicated to small business are so scattered, no one knows who to call to help. Why not put them all under one umbrella department? There can even be a website and 1-800 number that small businesses can refer to for answering questions and addressing common problems.

I've worked for thousands of businesses and I've seen what succeeds and what doesn't. I know this will work. If the politicians really want to do something that's going to help this country's small businesses, they have plenty of ideas from which to choose. No more excuses. It's time to take action. Whether they do, or not, remains to be seen.

George Cloutier is founder and Chairman of American Management Services, Inc., the leading consultants and turnaround experts for small and mid-sized businesses. A magna cum laude graduate of Harvard, and holder of an MBA from Harvard Business School, Cloutier is one of the most sought after experts on small business by government agencies and corporations around the world. He is also one of the most colorful denizen's of "Richistan," Robert Frank's New York Time's bestseller.

Comments

[ReelBusy]

More McCain hypocrisy and flip-flops, this one is about torture:
http://www.youtube.com/watch?v=axrgFGZYFzE

Let's have some fun now: The McCain-Nixon-Bush Tango
http://www.youtube.com/watch?v=NyvJVy_7LYU

Smiling John McCain - Tough Talk - Fool or Fraud?
http://www.youtube.com/watch?v=s4-PqAXRIRU

Vote Obama and Stephen Baldwin will leave America
http://www.youtube.com/watch?v=BCChBHWEDiU

John McCain Whines about George Bush
http://www.youtube.com/watch?v=BuAa7IGVTGw

[themodernleader]

DuganS1. Neither candidate has a credible economic recovery program. But the demigogic panacea of reducing corporate taxes is all burned out. Corporate taxes have decreased from over 50 percent to -7 % of Federal revenues. The Republicans have brought us to the edge of total collapse. The Bush Bunch bankrupted the Federal Government. The dollar is rising temporarily due to the severe contraction of other healthy economic organizations, not because of our despicable monetary policies. After the election, the entire market and banking system will collapse. Guess who will be blamed and plummeted by Wall Street and their monopolistic propaganda machine? Already, they will be conditioning the people to resist the policies of the new Administratiion and paving the way for Republican land slides in 2010 and 2012.

[Sumocat]

"Last time I checked, Obama had no small business experience. (Then again, neither does McCain, Bush, or any key figure in Washington­.)" -- Hold on a second. Bush ran a series of small oil companies in Texas. He ran them into the ground, but failure still counts as experience, right?

[January]

Wait a minute. Are you saying that an economic system that works for the rich does not work for the rest of us? That's blasphemy. Ronnie the ray gun told us long ago, and we believed him then so why shouldn't we believe in him now, that the rich will take good care of the rest of us. All we have to do is to keep the rich rich.

Family farms are small businesses. Just look at American farm families. See how well the family farm is doing. Yeah, my tongue is in my cheek. How much more obvious does it have to get before we see that corporations do not have our best interests at heart? Family farms and small business are closer to my best interests than large corporations. Pity that all the advertising is done by corporations (they can write it off). Americans are too poorly educated to see what stares us in the face--the class war is over and we have lost.

[ImmanuelGoldstein]

My landlady is a small business owner of 30 years standing. But in the last couple of years she has been relegated to living on credit and a small rental income.

PEOPLE DON'T HAVE ANY MONEY TO SPEND! That's why not only are small business failing, but even giant retailers are in the same stew.

http://www.globalresearch.ca/index.php?context=viewArticle&code=ENG20080802&articleId=9728

In an economy where 70% of spending is consumer spending , you cannot expand on the back of stagnant incomes for most of the population. We tried handing out credit cards to everyone with a pulse ,but that can only work for a little while.

So now what? The 'tech' jobs everyone I know studied for back in the 90's went to China and India. We tried the conservative 'open a store and sell stuff to each other' and that's collapsing.

But don't look to the consumer to save small business. They are facing skyrocketing prices on basics, are already in debt up to their eyes and losing their jobs. No matter how many Bath 'n' Beds people open up they are going to fail if people don't have any money to spend in them.

[themodernleader]

This country's financial system and make-work economic structure is being subverted by money stimulating programs. Each stimulation is less influential than the previous one. Money that circulates without benefiting manufacturing, infrastrructure, knowledge, technology, agriculture simply degrades the currency. Then the next downturn places even more people on the streets.
If we were to place import restrictions on products requiring much capital, labor and brains we could start renewing gainful employment, new revenues for government, and a reason for education and training. Simply throwing 25 billion at small enterprises that can not survive in a mercantelistic monopoly, conglomerate, foreign dominated economy is essentially throwing more borrowed money down a rat hole. We must think and act anew. We must elect and appoint leaders that think big for the common interests. And a little knowledge of history of growing and declining civilizations would be a first prerequisite.

[DuganS1]

Manufacturing has continued to expand in many sectors and will be up dramatically further into all time highs when the real estate and auto sectors recover. Initiating import restrictions would only increase prices substantially for consumers and reduce exports. It would be catastrophic for our economy. A major cause of economic weakness recently has been increased prices for consumers and a major cause of the 2001 recession was a collapse in exports. The most important issue now is to re-capitalize the banking system. Liquidity is the life's blood of our economy and always has been.

[tdpubs]

You mean another bailout?

[Veri]

Ummmm... I would venture to state that the Republicans and Democrats are two wings of the same party. And that party has no interest in small business owners who cannot pay them the "contributions" necessary to wield influence in American politics. My two dollars. Damn inflation due to fiscal mismanagement by Congress, The President, and the freakin' Federal Reserve.

[dadw5boys]

READ THIS !!

http://www.sba.gov/advo/research/rs330tot.pdf

Bush changed added a Nmae to the SBA and changed the Difintion of what a small business is so the Larger Bussinesses cvan get low interest small business loans.

Even with extremely low interest rate now they still have to cheat !!!!!!!!!

[LeeScho]

Twenty-three million business owners cannot each contribute $100.00 annually to a lobbying effort on their behalf?

McCain and Obama haven't turned their backs on 23 million small business owners. Those business owners have turned their backs on each other - and themselves.

[joebiz]

George, good post. As a small business owner, I thank you for the attention you have given the "little guy." It's not just about tax cuts but creative opportunities for the the largest growing business sector.

[DuganS1]

My wife is a small business owner and what would help us the most by far is very clear, a strong dollar policy. The dollar has already been strengthening and that is a good sign, but we need a policy to keep that going. The best policy I've heard so far is from John McCain, and that's his plan to reduce the corporate tax. That would result in getting foreign investment money to flow into the US and US investment dollars abroad coming back into the US, thereby strengthening the dollar. Giving tax credits for healthcare wouldn't help us as we wouldn't offer healthcare anyway because it's too expensive.

[KillTheMessenger]

How is lowering the corporate tax going to increase the strength of the dollar? If we want to increase the strength of the dollar we need to stop printing money. Which means that we need to pay as we go. Which means we need MORE, not less tax revenue.

[DuganS1]

Lowering the corporate tax rate would bring investment money into the US, which will increase the demand for dollars. The increased investment would give a tremendous boost to economic growth and result in more tax revenue, not less. Growth and interest rates are the biggest determinants of tax revenue, not the tax rates.

[KillTheMessenger]

Should we make it a government policy now to bail out EVERYONE? The small ones, the big ones, home owners, people who rent, the unemployed, the employed, people born on even dates, people born on odd dates?

How about simply bailing out the tooth fairy? She seems overworked these days and does not come to Americans as often as she used to.

[paixa3]

How about bailing out ABSOLUTELY NO ONE !!!!!!!!!! My heart truly goes to those who really need help. Sadly, our government only helps the very rich, who put them in place at the onset.

[KillTheMessenger]

How about bailing out those who need it? Like by giving everyone basic health coverage? How about making shelter and two healthy meals a day a basic human right?

I would also add free education on all levels, including college, to the list. The reason being mostly economic: smarter countries perform better.

Beyond that, let's not bail out anyone. If a certain business model fails, it does not deserve to be kept alive on a government drip.