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Policy Matters: Your Turn
a weekly column
Have you ever had somebody ask you a question but, by the time they explained the question and explained the context and explained what they think about it, you'd forgotten what the original question was?
It's been like that, for all of us, over these last two years.
It seem incredible but the 2008 presidential campaign, which has been going and going and going just like the Energizer Bunny, will finally conclude tomorrow.
Political campaigns have become very obnoxious things, full of people telling you what to think and what not to think and why the only way you get to be "normal" or a "real American" or a "caring citizen" is if you agree with them.
And partisans of all stripes, whether they are running for office or just rooting for the folks they view as "their team," can be equally annoying, for all the same reasons.
Read article
This week's news briefs
Here Comes The Microbusiness Credit Squeeze
While members of Congress have been doing a certain amount of yelling about small business owners who cannot access working capital to do things like purchase inventory, make capital investments or meet payroll, another development in the credit landscape is beginning to threaten microbusinesses. Some of the nation's largest banks, already in trouble over securitized mortgages and otherwise poorly-managed risk, have turned their attention to their credit card practices in further attempts to staunch the bleeding.
Given the economy's poor performance and rising unemployment, you can't blame them for worrying about the ability of some of their customers to pay their credit card bills. In response, they are tightening acceptance standards, slashing lines of credit and closing inactive accounts - sometimes in ways that damage their customers credit scores. And microbusiness owners are going to really feel the pinch here, because they are getting shut out of almost their only source of working capital. There's little to be done about it, either, since SBA guaranteed loan programs don't feature any sort of working capital line of credit. What's Congress going to do about it? Probably nothing; the odds are that they won't even notice.
House Panel Still Seeking Stimulus Ideas
The House will either return to work after the election or will simply adjourn and allow the 110th Congress to become a part of history, but that hasn't stopped several House committees to continue doing the people's work. Last week, the House Small Business Committee held its fifth hearing to examine what Congress can do to help small businesses drag the economy out of recession.
Not much was discussed that was very relevant to microbusinesses. Center stage, of course, was the credit crunch and the way that frozen capital markets are forcing small firms to contract, lay off workers and even, in some cases, close their doors. Small business owner witnesses were able to tell lawmakers that they didn't really need hand-outs, they simply needed paying customers. Suggestions included supporting small firms seeking to expand into foreign markets through exporting, helping small firms to sell to the federal government by making sure that small business awards actually go to small businesses, and investing in our national infrastructure. Of course, a certain amount of the game plan won't be written until after the election; any stimulus package is unlikely to be signed into law before the next administration.
College Major Predicts Self-Employed Future
Dr. Chad Moutray, chief economist for the SBA Office of Advocacy, has been a busy guy lately. His recent working paper on the probable challenges and opportunities facing small businesses in the wake of the upcoming elections garnered quite a lot of attention — understandable, given how much attention has been focused on the election in general. (See "Advocacy Paper Looks Ahead for Small Biz" in the October 20, 2008 issue of the Microbusiness News Briefs.)
Last week, Advocacy released another working paper by Dr. Moutray, this time examining the self-employment preferences expressed by college seniors in 1993 and their employment situations ten years later, in 2003. What he found was that students who would later go on to be self-employed tended to major in the social sciences and "other" (whatever that means), that they cared more about being self-employed than about status, money or job security, and that they tend to make either a little (under $20,000) or a lot (over $100,000) of money. Further research is needed, of course. As self-employment grows in importance for increasing numbers of American households, it is important that we improve our understanding of them - the better to craft policy that supports their efforts.
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