Lesson #2: Debt is evil. Sure, business start-ups and expansion require private capital from investors (not taxed into paralysis) as well as financing from lenders. But the idea that tight credit is causing small business not to hire more people and create more jobs is fanciful. If you are running a business and need to go deeper and deeper into debt in order to meet payroll, hiring more people is like adding passengers and cargo to a small, leaky boat. (Sort of like creating a giant new federal health care program when the smaller one you already have is, by your own admission, drowning in waste and fraud, and functionally bankrupt.)
Almost 30 years back, I made that very mistake, and it didn’t turn out well. To quote Maggie Thatcher, sooner or later you run out of other peoples’ money. If you’re running a credit dependent business, it’s sooner. A lot sooner than if you’re running, say, a government. But at your pace of drunken-sailor spending and debt accumulation, President Oz, you will get there. I have every confidence.
Mr. President, the bulk of the job losses at the small business level aren’t tied to tight credit at all. They are the result of your policies and threats of policies that target business owners. I have lost count of the different ways you and your Democratic Congress and your czars have threatened to take money away from business owners. I was up to 30, and just gave up.
The job losses are the result of a climate of uncertainty and fear you have created. They are anticipatory; a shedding of employees before unknown burdens tied to Obamacare occur. And you are about to see another tidal wave of such job losses, right after the new year, as countless small businesses that hung on through the holidays received no Christmas miracles, and eliminate another job or two each, or, in many cases, shutter their doors permanently.
I know these things and, perhaps, you don’t, because I am a small business owner, and I’m in constant communication with about 25,000 others who are too. You, on the other hand, are busy calling a lunch and a photo op with CEO’s of big business a Jobs Summit. Or squeezing in a campaign stop in Allentown between the climate change (ie. economic destruction) conference in Copenhagen and taping your part in Oprah’s Christmas special.