How ironic it is that America’s largest banks, in their ever-increasing quest for growth at any cost, drifted horribly away from their skill-sets and knowledge-base and into exotic financial instruments few people sold and even less understood. Now we continue to bailout these “too-big-to-fail” institutions while America’s small businesses eagerly wait to see if anyone in Washington will even remember them and offer a hand-up. Well . . . you’ve been waiting a while, haven’t you?
I find it amazing that Congress (the House of Representatives, in this case) can act so quickly (and be so incredulous) to enact legislation (unconstitutional, by the way) a few weeks back in a matter of mere days to tax the $165 million in AIG bonuses (less than 1% of what we’ve invested in AIG to “bail-them-out”), yet most of President Obama’s much-vaulted small business initiatives speech in mid-March was just a rehashing of some of the few provisions in the ARRA (American Recovery and Reinvestment Act) that directly affect small businesses. The ARRA, sadly, is long on social engineering and short on much that’s immediately stimulative. How come our elected officials can’t show the same speed and deftness in passing meaningful legislation that might actually have a substantial impact on the growth of small businesses in America? Perhaps it’s time you ask your local Representative this question.
If you’re like me (and most of our readers here are either business owners or advisors to business owners), then you’ll admit to yourself that somewhere, deep down, you’re angry at these Big Banks that got TARP funds. You’re irritated at the Wall Streeters who created this House of Cards. And you’re frustrated that no one is knocking on your door to bailout your business. The Big Banks, AIG, and the auto industry should have had to choose between bankruptcies or receivership, not bailouts. We don’t need the “rule of politicians” (screaming about the few people that made profits at AIG and actually give us a slim chance to get out of it, maybe nearly whole); we need and needed the “rule of law”: chapter 11 or chapter 7 of U.S. bankruptcy law. The primary reason the Big Banks didn’t declare is because Wall Street (where Geithner and Paulson once worked) would have been left holding the bag -- they wouldn’t have done as well as under the current bailout program. Sad, but irrefutable.
It may be public schizophrenia . . . people wanting programs they don’t want to pay for . . . but people like us KNOW this is faulty logic, completely untenable in the Real World. Never-ending budget deficits cannot exist forever for small business owners. We can’t raise the cost of our services indiscriminately. And we certainly can’t print more money. While most people in America are belt-tightening, Congress is giving most departments and agencies double-digit percentage budget increases. Amazing!
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