Who appointed small business owners as the savior of the U.S. economy?
Harken back to that old commercial with Smokey the Bear “only you can prevent forest fires.” Steve Rubel of Micropersuasion picked up on a similar theme about a year ago when he satirically wrote that “Advertisers, Only You can Save Web 2.0” pointing out the folly of assuming that advertising revenue could support all the Web 2.0 startups.
A similar thought here: Small businesses, while critically important to a business ecosystem, and drivers of new job growth, are not going to be the one and only savior of the economy. Don’t get me wrong — I think small businesses are crucial to our economy. Small businesses create lots of new jobs. Small businesses also create work not traditionally thought of as jobs, such as independent contracting relationships — their impact is even larger than official numbers suggest.
But small businesses did not create the economic situation we find ourselves in. It was created by greed and excess and speculation — mostly on the part of very big businesses.
Yet groups invoke the “do it for the small businesses” mantra to support measures that really are intended for special interests. For instance, trade groups are asking for “buy American” protectionist provisions to “protect small business interests.” Even Lou Dobbs (who I’ve come to admire for his tough stance on some issues) is beating a dead horse on the protectionism for small businesses theme. Another example: venture capitalists are lobbying to support their investments and the interests of the tiny handful of companies that get venture funding.
The problem is, we can’t “help” every industry and every interest. And efforts to help one industry can have unintended consequences. As this Kelly Spors piece in the Wall Street Journal Independent Street blog points out, protectionism could hurt more small businesses than it helps.
None of these special interests represents every small business. The more help given to special interests, the harder the rest of the small businesses have to work in order to shoulder the taxpayer burden and ripple effects that result.
Some small businesses are critical of the stimulus package, preferring provisions that cut across large swaths of small businesses, such as tax cuts, instead of specific industries, as this New York Times piece points out.
We’re all interconnected. Any time you help one group, it’s done on the backs of everyone else, who must pay for it and live with the consequences. As Andy Birol, one of our Small Biz Experts here once wrote, in the words of Paul Simon, “one man’s ceiling is another man’s floor.”