Saturday, January 30, 2010

A Message From Small Business To Obama

About 70% of Americans actually work for small businesses. In fact, small businesses employ far more people than large multi-national corporations. As someone who has built a small business into a global corporation in the last 20 years, I know a little something about creating jobs. As such, I would like to represent Small Business and send President Obama a message from all of us. First it is important to recognize that only about 8% of Obama's appointments working in the Obama Administration have ever worked in business. Most Obamanistas have come from academia or other government jobs, including the President, and as such few of them have a clue about business or small business, which is often their focus.

In his State of the Union Address, President Obama proposed providing a $5,000 tax credit for every new employee hired in 2010 and or given a raise. Mr. President, please don't add this expense to the federal deficit. While we will take the money if you give it to reduce our tax burden, be assured, that no business in America will add staff because of this $5,000 credit. The fully loaded cost of a professional lower level employee is about $100,000 or more a year. We would never add that expense just because the federal government provides a $5,000 incentive, since we would still have to cover the other $95,000 and presumably for longer than just 2010. So, if we add staff, it is because we have work for them to do. Providing this $5,000 incentive will just add to the federal deficit and not reduce unemployment by one extra employee.

Unfortunately, the things we need to grow our companies and the economy will not be provided by Democrat Socialists for ideological reasons. First we need a healthy vibrant economy full of consumers making purchases, which is the only way to stimulate job growth and the multiplier effect that will come from it. For consumers to make more purchases, they must get to keep more of the hard earned money that they make. For that to happen, at a minimum the Bush Tax Cuts must be extended for at least three more years. And, there cannot be any additional tax increases or other means of confiscating monies from taxpayers disguised as fees. In addition, raising taxes on business during a recession will only lead to more lay offs and or slower growth. Further, corporate federal income taxes should be reduced from the current 35% to 25% to be more competitive with other countries and keep more jobs in the US. It should not take a PHD in Economics to see the common sense in these recommendations.

Next, we need laws that will curtail or end frivolous lawsuits. Each year, businesses deal with frivolous lawsuits that rarely have a solid basis or claim of action. There are employment related lawsuits filed by attorneys, working on contingency, who are the equivalent of ambulance chasers. These predator attorneys no the game. Most of these cases never go to court because they are so stupid; but in the end companies and or their insurers will pay the attorney and their client $50,000 - $100,000 just to go away. In the mean time many of these cases can go on for years wasting time and money that cannot be used to hire new employees. And, then there are the business related lawsuits that can come from any direction that again usually amount to little; but a nuisance and time and money waster. Democrat Socialists, including the President, are tied to the Trial Attorneys, that contribute millions to their campaigns and as such tort reform just will not happen as long as they are in control. It is important to note that there was no medical malpractice tort reform in the Obama/Reid/Pelosi HealthScare Plan even though these cases add billions to the cost of health care each year.

Dealing with major banks is problematic for most small businesses. This has always been the case and did not just begin with the crash in 2007. The major banks love the transactional fees they can earn from small businesses; but they are not keen on providing credit lines or loans even to successful businesses. And, the smaller local banks often do not have the sophistication or lending capabilities to help global small companies. The banks are a problem; but not because they pay high bonuses or their managers are greedy. As a business owner, I could care less how banks compensate their employees. That matter should be controlled by Bank Board of Directors and their shareholders not President Obama, or the Democrat Socialists that control Congress that know absolutely nothing about running a business.

It is possible that there needs to be more government guarantees related to lending to small business beyond just the Small Business Administration apparatus. And, perhaps major banks should be required to maintain some percentage of their portfolios in loans to small businesses; though I hesitate to recommend such requirements because that is what caused the mortgage meltdown related to Fannie Mae and Freddie Mac as banks were pressured to lend to unqualified borrowers. In any case, providing credit to many small businesses is critical to their growth. Clearly, government needs to work on this problem without dictating a solution that could have unintended consequences.

Finally, businesses are drowning in federal and state regulations and tax code issues. Compliance with Sarbanes Oaxley regulations that were put in place after the Enron meltdown is costing billions of dollars and many jobs. It is true SOX has been great for accountants and attorneys; but they are not the folks who generate revenues or produce new products or services. So money invested in accountants and attorneys is money that cannot be used to grow a business and create jobs. We need an end to many regulations that make no sense and are just job killer laws

Unfortunately, President Obama will not act on any of my recommendations because he is a Democrat Socialist ideologue that believes in tax and spend and big government solutions that actually cause unemployment. As such, we have to take back our country in 2010 and 2012 by electing Conservatives that have worked in the real world. We need people in office who have made a payroll and understand what it takes to create jobs. That means we need to make Obama a one term President. And, we have to send the Democrat Socialists that control Congress packing and back to their university jobs. We can do it. We must do it.

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