We keep hearing about the great growth in the economy, but the majority of
Americans don’t see much of that.
The stock market is up but while that helps stockholders, it doesn’t get down
to the the unemployed, under-employed, and those no longer even looking for
“Productivity” is up, but every time a job is shipped off shore, “productivity” gets
an upward tick and someone else is put out of a job here at home.
And small businesses, usually the the first to kick off a recovery with new
jobs, are kicking the bucket instead.
‘Bankruptcies are disproportionately hitting a key source of new
‘If the recovery is so great, why is job growth so sluggish? High
productivity, imports from China, and outsourcing of jobs to India may
all be part of the answer, but some bankruptcy experts also point to the
troubles plaguing small businesses. They usually create most of the new
jobs in the initial stages of a rebound. But this time, they’re increasingly
going belly-up and extinguishing jobs instead. In fact, for the first
time since 1990, more businesses with more than one and fewer than 500
employees shut down in 2001 and 2002 than were created.
‘All this is happening just as much economic data seem to show that small
businesses are getting more upbeat. More applied for loans in 2003’s last
quarter than in the previous quarter, according to January’s Federal Reserve
survey of senior loan officers. Still, the specter of bankruptcy looms
large for the throngs of companies that compete with Wal-Mart Stores
Inc. and other discounters.’ [Business
Week 03/01/2004 subscription]
So what’s the Bush administration doing to help?
‘SBA Slams the Door on Borrowers
‘Why would the Bush administration shut down the SBA’s most popular program?
‘In an e-mail sent out on the evening of Jan. 6, the SBA [Small Business
Administration] announced that 7(a) loans were going on indefinite "holiday," Through
the program, the agency’s most popular, the SBA backs loans for thousands
of small businesses that have a hard time raising money through conventional
‘The e-mail also announced that the SBA would return or discard any applications
that hadn’t been approved. The unprecedented shutdown was stunning given
what the Bush administration likes to say about its relationship with small
‘Speaking to a group of women entrepreneurs two days after the shutdown,
the President himself said, "Make no mistake about it, the role of
government is to create the architecture in which people are willing to
take risk." That the government had placed in limbo more than 1,000
small-business loans for more than $500 million was not mentioned.’ [Inc.
Magazine, March 2004]
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