Jobs will increase when fear and uncertainty decrease
Recently, President Obama has been promoting small business job growth. Two of his ideas are great: free trade and new energy initiatives.
Trade is to an entrepreneur as seed is to a gardener. Plus, expanding nuclear power and drilling for domestic oil and gas makes a small business owner think plentiful energy at competitive prices. High-five, Mr. President.
Alas, this is pretty much the extent of the President's good news for small businesses. But he apparently thinks the next two ideas will cause small business owners to get giddy about creating jobs.
President Obama proposes to give community banks access to $30 billion to encourage more small business loans. The problem is most community banks have never had a shortage of capital available for small business loans. Plus, helping small firms capitalize growth is in a community banker's DNA. The overarching small business credit problem is not supply, but rather demand. More money in Main Street banks will not create more Main Street jobs.
The President proposes to eliminate the capital gains tax for small business. Ask small business owners for the top 20 things that prevent them from hiring, and capital gains tax won't be on that list. Proponents say it would encourage outside investment. But here in the real world, only a tiny percentage of small businesses want investor capital, and of those, only a fraction actually get funded. Cutting capital gains tax to create small business jobs, as my grandfather would have said, is a fool's errand.
Incredibly, President Obama continues to push two policies that are in conflict with his hope of new small business jobs.
Health care reform: Most small business owners are reluctant to hire as long as the proposal being offered doesn't sound like reform but does sound expensive and punitive. Mr. President, if you want more small business jobs, start over with market-based solutions and portability. The marketplace isn't perfect, but we trust it with our health care more than we do the government.
Climate change: Instead of fearing carbon taxes and restrictions, America's businesses, large and small, should be congratulated on being the most carbon-efficient (per dollar of GDP) in the world. Mr. President, your climate change ideas make small business think about prohibitively high energy costs, not about increasing payroll.
President Obama, if you really care about small business, you'll get better small business advisors.
Write this on a rock ... Jobs will increase when fear and uncertainty decrease.
Jim Blasingame, Creator/Host of The Small Business Advocate Show
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