Why Washington Doesn’t Get Small Business

Blog content provided by Barbara Weltman, Publisher of Big Ideas for Small Business ®

Many small business owners nationwide have been astounded by the proposals and laws that have come out of Washington in the past 11 months. Despite rhetoric that Washington values small businesses and recognizes their importance as job creators, the drift from the city on the Potomac has been anything but helpful; sometimes it’s been downright hostile. Maybe now we know why…

According to information from JP Morgan Global Wealth Management (as reported in The Enterprise Blog and in other places), the current administration has virtually no one in it with business experience (let alone small business experience).

Since Teddy Roosevelt, the number of cabinet appointees with private sector experience generally averaged around 40% (the percentage reached 58% with Eisenhower and 56% with Reagan while falling to a low of 31% with Carter and 28% with Kennedy). The percentage for the current administration is only 8%–practically no one in charge of business policy has any real life experience working in a business or running one. How can policy be made that directly affects business without understanding the impact it would have on business?

A quick look at the new regulations, taxes, and other burdens that would be imposed on business by health care reform and cap and trade demonstrates the lack of understanding about small business. How can a jobs policy be made when key representatives of employers, including the National Federation of Independent Business (NFIB), the U.S. Chamber of Commerce, and the National Association of Manufacturers, are not invited to the jobs summit?

The NFIB Index of Small Business Optimism continues to plummet, as evidenced for numbers released for November. The biggest problem cited by respondents was the lack of customers, but I suspect things go deeper.

According to NFIB Chief Economist, William C. Dunkelberg, “The economy may be turning, but small firms are not convinced things will improve anytime in the near future.” One reason for this pessimism—no support from Washington.

While homeowners, car manufacturers and car buyers, big banks, and other sectors have received bailouts, tax incentives, and other government support, there has been almost nothing for small businesses. With practically no one in authority in Washington who understand business’s plight, it’s unlikely that there will be any meaningful assistance forthcoming for small business.

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