Huffpost Small Business
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Lloyd Chapman Headshot

Washington and Banks Don't Understand Small Businesses Are the Engine of Economic Growth in America

Posted: Updated:

Let me give you some advice I have been giving to people for a decade: quit listening to what your politicians are saying and start watching what they are doing.

If you look past the propaganda you'll see that the U.S. government is anti-small business. For over a decade the U.S. government has allowed the diversion of billions of dollars in federal small business contracts to large corporations every year, and dismantled longstanding federal programs that nurture small business growth. And now, large banks are pulling the rug out from underneath small businesses while the Obama administration does nothing.

As we enter the election season we'll start to hear our politicians talking about how small businesses are the engines of our economy and must be supported by consumers, banks and the government. But while small businesses create at least 90 percent of net new jobs in the nation every year, American politicians are corporate puppets who pander to the masses without actually doing anything to ensure that small businesses can grow and revitalize our economy.

Yesterday the LA Times reported that Bank of America is cutting back on small business lending and forcing small business owners to pay off their credit lines or accept new five-year loan terms with significantly higher interest rates.

This anti-small business move by BofA will no doubt cost small businesses dearly. Thousands of small businesses that have been scraping by in this tough economy with the help of loans will now be left with nowhere to turn.

Of course, I doubt you'll hear anything about BofA's anti-small business actions on ABC, NBC or CBS where the gigantic U.S. banking corporation spends millions to advertise.

In fact, I doubt that you'll hear more than a peep out of any politician about BofA's cut in small business lending, despite the fact that leading economists all agree that small business growth is the best way to stimulate the national economy.

Need I remind you that BofA got $45 billion from the Troubled Asset Relief Program in 2008, partly to secure access to capital for small businesses?

With the passage of TARP in 2008, the largest banks in the country were handed a $700 billion government bailout, so the failure of those banks wouldn't cause more severe damage to the national economy. As part of that bailout, large banks were called on to increase access to capital for small businesses.

Then-Senator Obama, Senator McCain and former President George W. Bush, all said that passing TARP would be a crucial development for small business lending.

Too bad this was a false promise and that everything the government does in the name of "small business" is actually a ruse that ends up benefitting large corporations.

If you doubt that the U.S. government is anti-small business, take a look at Small Business Administration Inspector General Peggy Gustafson's testimony before Congress in October, that shows that for seven consecutive years the diversion of federal small business contracts to corporate giants around the world has been one of the largest problems facing the SBA and the entire federal government .

If you doubt that U.S. government is anti-small business, why don't you ask President Obama why he never kept his 2008 campaign promise to "end the diversion of federal small business contracts to corporate giants." Or why President Obama, the nation's first African-American president, is abolishing the nation's oldest program to direct federal infrastructure spending to minorities.

If you doubt that U.S. government is anti-small business, explain to me why 60 of the top 100 companies listed as federal small business contractors in fiscal year 2010 were actually some of the largest corporations in the world, like Raytheon, Boeing, Lockheed Martin, AT&T, Italian defense giant Finmeccanica, Rolls Royce and British Aerospace.

If you doubt that the U.S. government is anti-small business, tell me why Bank of America, which received $45 billion in federal bailout money, is now cutting small business lending without being penalized.

To me, our government can be defined by its anti-small business policies and practices. Taken together, they paint a clear picture of our political leaders' corrupt relationship with Fortune 500 firms.