As I promised my readers last week, here is a guest post from John Bascom, the author Caine’s Pestilence. I think you will find it quite eye-opening as he explains one of the lessons he wants you to take away from reading his novel. If you like what he has to say, please let him know in the comments. You will find a link to purchase his book on Amazon in the left sidebar.
Caine’s Pestilence is a unique novel of drama, tragedy, triumph, satire, and humor set in a future America firmly in the hands of the ultra-liberals. This is one of its lessons…
WHY OBAMA’S FIXATION ON SMALL BUSINESS WILL NOT SAVE THE AMERICAN ECONOMY
Like motherhood and apple pie, you just can’t hate small business. Every family has a connection to one: Uncle Joe’s hardware store, Aunt Millie’s gift shop, or Cousin Bill’s landscaping service. It’s the American dream—be your own boss. And every big company like Microsoft or Google or Apple started of course small. But” big-business?” Why, that’s for greedy Wall Street types. Don’t they fire everyone, move jobs overseas, and duck paying their “fair share” of taxes?
The fictional John Caine lives in a near-future world where Nancy Pelosi rules the White House and the most liberal wing of the Democrats controls both legislative chambers in Washington. Of course, in Caine’s world, things have gone slightly…shall we say…off track. Unemployment is 20% and rising, the dollar is junk on world markets, businesses are shuttered and American workers are trying to sneak into Mexico to find jobs and a better life. “Not to worry,” President Pelosi tells us. It’s all the fault of Wall Street fat cats, the wealthy and well connected, and—of course—President Bush. More government spending will get us out of it. Sound familiar? But, hey, it’s just fiction…isn’t it?
Turn now to our own, very real President Obama. While he regales the evils of big business, bankers, hedge fund managers and greedy “millionaires and billionaires”—who and where are these droves of thieves who are ruining America?—he anoints “small business” as our economic savior. Still, unemployment seems permanently stuck above 9%, job creation is a fading memory, and America’s credit has been downgraded. All everyone is talking about, including the Fed and White House, is a double-dip recession.
The small business tune is sung over and over by Obama and his advisors. “’We know that small businesses are the engine of growth in the economy,’ said Christina Romer, chair of the White House Council of Economic Advisers, (a few years ago) on the TV program Meet the Press,” according to the Minneapolis Fed in a paper they published questioning the validity of small businesses as the main employment growth engine. In an address as he prepared to sign the Small Business Jobs Act last year, Obama explained small business owners would receive tax breaks and better access to credit. “Now this is important because small businesses produce most of the new jobs in this country. They are the anchors of our Main Streets,” he told his audience. And of course his new jobs act (“pass this bill now!”) is replete with so-called bones for small companies, and punishments for the large ones.
Now, I’m all for small businesses, which are generally defined by sources including the Small Business Administration as those with fewer than 500 employees and revenue under $25 million. Consider information provided by the Bureau of Labor Statistics and data from the US Census. According to their 2008 data, small businesses employed 59.7 million people, an impressive figure. But it took so many businesses to do that, the average was only 9.3 workers per company. Contrast that to larger private firms that employed 61.2 million people or 3400 workers per firm. The biggest 1000 companies employed 33,660 people each. And the failure rate of small businesses is huge, even in the best of times. The SBA again tells us that half of new small businesses don’t make it, with other sources putting that figure at two-thirds.
Just consider the math behind all this. If larger, established firms were to increase employment by even 5% on average, that would be 170 new workers per firm, or over 3 million jobs for the economy overall. For that many new jobs to be created by new small businesses using the 2008 employment averages and assuming the more conservative 50% failure rate, why, over 640,000 new small businesses would need to be created to sustain that level of new employment. Pretty unrealistic.
Of course “helping” small business resonates with the Democratic base—union members, the unemployed, those with limited education and skills. What ordinary American can’t see themselves starting a small business? And “big business” is what that same base loves to hate. It’s good politics, after all—the reason why our president recently articulated his sympathy for the frustration of the capitalist-hating Wall Street Occupiers. But can it be good for the country?
When we look at the real unemployment problems in our country, it comes down to a beaten-up business community. Long-term liberal policies aimed at social engineering home ownership nearly destroyed the financial system through unrealistic government mandated and backed mortgage lending. Costly environmental and social regulations constrain and disadvantage American employers while enterprises in countries such as China, India, or Indonesia outcompete us and take our jobs. Do our large employers have any choice but to cut back or move production elsewhere? And is the fact that our miniscule job creation occurs more in the small business sector an answer, or the symptom of a deeper problem?
Which returns us to John Caine and the economic predicament in which he finds the country mired in 2014. Are we doomed to Caine’s fate? Or is there something that can be done?
The lessons of Caine’s Pestilence are clear:
- The business community—large and small—is and always has been a major engine of American prosperity. It must be allowed to flourish.
- Large businesses provide the quantity and quality of jobs we need to preserve and advance our standard of living—they are NOT the enemy.
- Hatred of “big business” and successful people is simple bigotry, like negative stereotypes applied blindly to any group. And bigotry is contagious. It must be stopped, not promoted by our government.
- Small business is great, but it alone can’t sustain the American Dream.
- Sound fiscal and monetary policies are essential to our economic success and global competitiveness: balanced federal budgets; monetary growth tied to economic activity rather than economic engineering; low taxes; and an end to expensive feel-good regulation and subsidies of companies or technologies that are “politically correct”.
- We must promote competitive right-to-work policies that offer workers choices and enable employers to develop productive and cost effective workforces.
- We need genuine, enlightened leadership from the White House, inspired by a concern for the future for all Americans, not just a “political base”.
How did our friend Caine address the problems of his day? He quite accidentally created a substance—the liberals branded it a “pestilence”—that allowed ordinary people to comprehend the fraud of the liberal promise. What can we real-life Americans do today? Well, we can shine the light of truth and reason on the destructiveness of the liberal agenda.
And in so doing—like Caine—we can “spread the pestilence” upon the liberal political machine.
John Bascom is the author of the novel, Caine’s Pestilence. He lives in rural northern Michigan with his wife, Nickie, where he writes, teaches, and consults.
Great post, Larry. I wish I could read the book. I think we conservative bloggers are helping to spread the pestilence, don’t you?
Can you not order the book and have it shipped to you? I wasn’t sure how that would work, considering your place of residence.
I never thought about us spreading the pestilence, but you may be onto something.
Just to play devil’s advocate for a moment, isn’t the GOP completely on board with the idea that small business is the engine of jobs and growth for the US economy? Isn’t the conservative argument against raising taxes on the “rich” that they are the drivers of small business and new jobs and if we raise taxes they will not expand and hire?
Mike, don’t get caught in the either-or trap. Plenty of people are unhappy with both parties. The November “shellacking,” and the rise of Herman Cain I think are indicators of that. When you use broad terms like “The GOP,” that’s covering alot of ground. I think the debt ceiling debate showed they are not a unified mob with a singular agenda. What they can agree on is that Obama’s policies are not what’s best for the country. For now anyway, that’s the glue that holds them together. For now…