MAIN STREET NEEDS A HERO!
MAIN STREET NEEDS A HERO!
We enter the new year with desperate hopes that a new direction can provide us with bold and lasting cures for our gasping economic situation. Politicians and pundits alike fill the media with recommendations for how to stop the bleeding and inspire consumer confidence as the world looks to America to restore its leadership position as the engine of economic growth. Our international competitors realize that a teetering American economy is very, very bad for their own business.
In times of great economic upheaval misguided sentiments seem to rise as irrationally as stock values decline. After the numbness of economic insecurity takes hold, it is difficult to believe in anything other than your own weakness. Weakness turns to defeat and defeat is always bitter. Bitterness seeks blame, which acts as the sinister enabler of false perception and convoluted reality.
In other words, panic has blinded us to the fact that a solution to our financial woes – along with many of the most profound social issues on our planet – stands directly in front of us. In an imploding world economy, we must quickly seek ways to improve our financial underpinnings in wise, sustainable ways. The solution exists in plain sight- a huge global market in need of our products and services. A comprehensive revision of the way we trade with the rest of the world changes everything. And with the exception of a handful of corrupt, oligarchs and despoilers, it changes it for the better for everyone.
More than anything else it is access to foreign markets that will get Main Street back on its feet. Those benefiting most will be legions of small and medium sized businesses ( SMB ) and the millions of our citizens they will and do employ. Throughout the 20th century, SMBs have historically done the “heavy lifting” for the American economy. They provide jobs for more than fifty percent of private sector employees. They produce thirteen times more patents per employee than large firms. They are the repository of American creativity and ingenuity that is the envy of the world. Over the last decade, SMBs have accounted for over seventy percent of new jobs generated annually.
If our government supported SMBs, they could quickly create 4,000,000 well paying and sustainable jobsat very little cost to the American taxpayer. Compare this to the much touted $840 billion stimulus package that hopes to create 2,500,000 jobs.
By their very nature, SMBs are proud and self-reliant. They never beg for the kind of bailouts handed to diminished bankers and washed-up industrialists. This would be beneath their dignity. They humbly accept their fate and the consequences of their decisions. We provide them very little yet they give back so much. Their only desire is to be allowed to fairly compete in the world market and for our government to defend their property.
It is the SMBs that hold the key to our financial recovery and security. So before we start doling out billions more in an ill-conceived stimulus package, consider this:
There are 27 million companies in America of which 6 million have employees on their payroll (only 8000 of these are large corporations). There are over 250,000 U.S. exporters, of which ninety-seven percent are small businesses. Of these nearly 60 percent export to just one country.
What is hindering more companies from exporting is they lack vital information about foreign markets, they have no access to financing and they have very few opportunities to be educated in international trade.
If we are seeking to invest in programs with proven results that address these barriers let’s start by looking to the Small Business Administration (SBA) and The Department of Commerce.
Each dollar that American taxpayers have invested in the Small Business Administration’s export finance program has yielded over $500 in export sales. Each dollar we have invested in the Department of Commerce export promotion program has resulted in $425 in export sales. These are probably the two most successful programs dollar-for-dollar, in the entire U.S. government.
Our total exports of goods and services in 2007 were $1.6 trillion. It is widely believed that not having access to foreign markets cost the United States $500 billion annually (I personally believe it is much more than this). This is exacerbated by Department of Commerce figures that estimate that intellectual property theft in China alone costs U.S. manufacturers $250 billion each year in lost sales.
Unfortunately the small businesses on Main Street don’t have Wall Street’s budget to hire well connectedK Street lobbyists to influence Congress. If they did they would be demanding the same market access for our exporters as foreign manufacturers have to the U.S. market. They would seek protection of our intellectual property and the expansion of proven government programs that assist our small businesses grow internationally.
The export growth opportunity for American SMBs is unlimited. If we came anywhere close to balancing our trade deficit, the only Americans who couldn’t find a good-paying job would be those either physically unable to do so or those simply unwilling to do so. The positive effects this would have on our economy – including a huge recalculation of our tax base – would be historic.
