Most politicians have never been business people, never had to make payroll, innovate, compete for a contract or find money to grow. This lack of experience causes two problems. First, they treat regulation, taxation and business assistance programs as political chips to be used as bargaining tokens for their petty reelection campaigns. Secondly, they do not fully understand the importance of capital in the world of small and midsized business. (They also under-appreciate the role small business employers will play in a full economic recovery, but let me stay on point).
As evidence, look at how Congress has ordered the Treasury Department to quickly bring to an end the TARP lending programs for small businesses. The terminology is interesting as this small business funding stimulus never actually got off the ground, as I predicted in an earlier post.
It was just a few
months ago the Republicans and Democrats alike were fighting to take credit
for TARP relief program to make available $30 Billion to boost small business
lending. Treasury has also been ordered
to stop creating any new programs to stabilize the financial sector. It is interesting that these 22 senators voted for the $700 Billion TARP bailout but against a small business lending fund.
Be clear, without motivation, stimulation and encouragement for the financial sector to provide small business loans, the lending window will remain shut and the small business sector will remain a drag on our economic recovery rather than a potential stimulus.
If it helps you to feel any better, the House as already approved a “new” $30 billion lending fund which the Senate should vote on sometime soon. While this will give the politicians a new bill to show you how hard they are working for American Small Business, you can consider it little more than a search for political sound bites in an election year.