APPEL: On Small Business, And Growth

I have been a small businessman for forty years.  Most folks hear the expression “small business” and do not really understand what it means and how government policies, based upon Washington politics, determine whether we survive or not.

This week it was announced that unemployment was stuck at 6.7% and that the total unemployment, including workforce dropouts and the under-employed, was above 12%. The stock market will love these numbers as they guarantee continued low interest rates. The liberals will immediately point to the growing stock averages and scream about the inequality between the haves and the have-nots. The “conservatives” will point at the President, and the President will blame capitalism in general for failing to help the middle class, whatever his definition of middle class is.

In the meantime we small businesspeople will continue to see our businesses decline and our futures become bleaker.

But why, in a nation where by most measures prosperity should abound, does small business decline? After all small business is the bedrock of the middle class. To my worldview, small business success is wholly dependent upon a principle that liberal pundits have now decried as heresy, the Reagan era concept of trickle-down economics. Though in this context I am simply borrowing a catch phrase from that long ago era as my beliefs are not actually what were then known as trickle-down economic policies. What I do subscribe to is the concept that growth at the bottom originates from growth at the top and that the removal of outside pressures from over burdening government policies are the only answers to the return of success of small business

As government has shackled major components of our economy such as the manufacturing, finance, healthcare sectors with more and more rules, regulations, and taxes they have looked to other avenues for profitability. They have turned to mergers, off shoring, technology and downsizing to stave off the burdensome costs that government has imposed upon them. In turn the mid-sized companies that had been their major suppliers have also had to scale back and so forth down the economy. The end result is that small business has lost its market.

By my definition this a classic trickle-down case, if one’s customer doesn’t succeed then one’s business doesn’t succeed.  We in small business cannot find growth through our customers because they are not growing. We cannot hire more people or pay better wages because we cannot grow. The entire economic core of the country is sick because it has lost its fuel. That fuel is growth and the resulting trickle down to small business.

As badly as the liberal media tries to discredit trickle-down economic theory, small business people such as myself know intuitively that it is real and powerful.

I don’t have the answers to this problem. I don’t hear anyone in Washington from either side of the aisle doing anything but complaining about the opposite side of the aisle. I do not hear any potential Presidential candidates say anything that remotely sounds like putting our economy back on its feet. I suspect that our country will continue to underperform unless and until someone steps up that can truly unite us under the vision that the road to prosperity leads through a healthy capitalistic economy built upon the shoulders of small business people.

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