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Small Business Climate: Kline Has the Wrong Forecast

Category: John Kline
Posted: 03/13/10 15:39

by Dave Mindeman

Who's looking out for small business owners? Republicans or Democrats? GOP supporters will be quick to answer Republicans. Democrats will hem and haw and never answer directly. The assumption tends to move to Republicans...almost by default.

But its not true.

The Republican argument centers around taxes. Corporate or income, the argument always comes down to this assumption that taxes are just too high for business.

But if that is the only basis for your position, your argument is weak.

Really, what have Republicans really done for small business outside of arguing, ad nauseum, for lower taxes?

Well, let's examine some key points:

1. Credit.

Let's be blunt. The previous Republican administration busted the credit markets. They were negligent in their oversight and when the walls came tumbling down, they groped their way for any kind of solution. The lack of oversight on credit default swaps nearly ruined the entire financial system.

As we slowly move to recovering from that, the benefits are basically a top down improvement. The bigger banks are helping the bigger corporations. Small business is too big a risk. Local lenders are overly cautious. Start up business is just out of luck.

Arguably, this Republican fiasco has been the biggest detriment to small business climate ever.

John Kline supported the administration's policies on oversight and he supported the overarching solution called TARP.

2. Health Care.

In order for small business to attract quality employees, they need to offer health care or at least know that their employees have health care available to them. If it can't be offered, the employee will leave for a business that offers benefits or the business will have to be content with costly training and retraining of temporary workers.

In addition, any entrepeneur who has an idea for a start up business where they are willing to take the risk of building....that risk taker needs one risk to be alleviated -- his or her own health care. Right now, we have no idea how many potential businesses do not even begin because the people who could make it happen cannot leave their current employment because they must have access to health care.

John Kline has opposed the administrations health care reform since the beginning and after a year of debate still contends that we should just start over. Meanwhile, the problem escalates and new businesses do not happen.

3. Infrastructure.

It doesn't do much good to produce goods or services through a business, if you cannot get them to market. This country has an aging and often inadequate infrastructure system. Roads and bridges are in drastic need of repair and upgrades. The rail system is almost archaic. Mass transit plods along as if time is NOT money.... we simply need to move people more efficiently to work.

Because we have neglected this part of our economic system, the costs are very high. Yet, if we do not make those investments now, the costs will only increase in the future and have an even higher detrimental effect on our economic recovery. We have to invest money to make money.

John Kline has issued his moratorium on earmarks. And although, some earmarks are clearly wrong and wasteful, the vast majority of them are proper infrastructure investments. John Kline doesn't know the difference because he refuses to even examine the requests.

4. Education.

The threats to our education system are growing. Too often educators are stymied by a lack of resources. Kids are moved into more crowded classrooms and technology upgrades are left on the budget cutters table.

Business cannot grow in an environment that lacks an educated workforce. One of Minnesota's strengths has always been a superior education system that can produce the scientists and business managers that move some of our best companies into the Fortune 500.

Republicans still cannot discern the difference between inappropriate spending and serious investment. In our current economy, we can't just cut budgets in butcher block fashion. We still have to invest and invest heavily. We need to sustain our unemployed until they can again find work. And we have promote and budget for our educational facilities in a manner that can keep them world class.

John Kline wants local control but won't help them with adequate resources. We need to educate all of our kids and that means fully funding special education and funding federal mandates. John Kline is more worried about whether or not our kids are adequately disciplined rather than properly educated.

Those are 4 of the most important areas that affect small business. They determine whether a business starts and whether it can grow. Republicans have always been an obstacle to moving business in those areas. Democrats have been the best hope of support.

Granted, taxes (corporate and income) have their effect. How much must be paid is certainly a concern. But it is less about how much, than about what the money is used for.

I can't imagine that any corporation makes major decisions on where to locate or if to expand, simply on the basis of taxes. Oh sure, they will look for tax incentives from the state to make things happen. But those are added bonuses rather than bottom line decision makers.

And I believe that small businesses think about it even less. Their focus and concern is to get their business off the ground. Profits and taxes are a luxury that comes much later.

Business climate is much more than who has the lowest corporate or state income tax. It is about where they can get the most support. The above four areas are the most critical to how well we support business in Minnesota.

Republicans ignore and obstruct those areas. Democrats don't always get it right, but at least they understand what's important.

So when Congressman John Kline tells you he wants to make Minnesota's business climate stronger, examine where he stands.

Does he stand with the wealthy and powerful who's only concern is how much profit they can keep. Or does he stand with the people with ideas, the risk takers, the men and women with a vision for the future.

John Kline has always stood with the former.

Minnesota's 2nd District needs someone who will support the latter.
comments (2) permalink
03/14/10 15:09
As always, great additional points!
 
03/14/10 13:32

Excellent commentary.

I don?t know if these were listed in order, but there should be no doubt that Credit is the overwhelming concern of small business. The availability of credit still is constricting growth possibilities. And in Minnesota, Governor Deadbeat?s practice of delaying issue sales tax refunds for capital investments is hurting big time.

Regarding Healthcare, another consideration is that workers who have employer-provided health coverage are ?locked? with that job ? if they want to start their own business or take another job. Mr. Kline?s healthcare plan only requests a ?study be done to determine if pre-existing conditions are a problem? thus many potential entrepreneurs are trapped. Regardless, considering how many businesses are reducing and eliminating healthcare coverage ? the future does not look good ? and Mr. Kline does not have a plan that will improve this.

Regarding infrastructure, it?s not just ?physical? roadways, but also the new ?roadway? ? broadband. The Federal Communications Commission is recommending a subsidy for Internet providers to wire rural parts of the country now without access which could mean that a business in Faribault or Northfield is just a likely as the Twin Cities to prosper ? will Mr. Kine support the dominate current Big Business or the FCC?s recommendations ... or more likely claim that this is just another intrusion by the Federal Government ?

One aspect of Education that was not addressed was that Mr. Kline?s ?no earmarks? policy impacts research that could be done in Minnesota universities and technical schools. Many times, these research grants invariably involve small businesses as providers of goods and services ? as well as potentially develop into great businesses of the future ? would there be a Medtronics today if not for the U of M Medical program. And has Mr. Kline been supportive getting federal grants that could go to schools to retrain workers who have been displaced by the recession ?
 

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