No help for small business

At yesterday’s Palmetto Freedom Forum in Columbia, SC, the candidate who will never be President, New Gingrich, made the most important observation about the economy.  He said that if we don’t put in place an effective action now (not when he’s President in 2014), we are in danger of going back to a severe recession.

The operative words were NOW and EFFECTIVE.

Considering that it is universally accepted that most net new jobs will come from small businesses, what did the GOP Presidential candidates propose yesterday to create jobs?  Give big business, those Romney persons who are sitting on trillions of dollars instead of hiring, more money of course.

How?

-Dramatically cut corporate income taxes (the taxes small businesses do not pay because we are not corporations).

-Give U.S.-based multinational corporations a tax holiday for bringing (repatriating) their profits they have been keeping off-shore (to avoid paying U.S. taxes) back at low or even a no-tax rate.  (We tried this once in 2004 and it failed to create jobs.)

The candidates also wanted to kill Dodd-Frank, the financial reform legislation meant to protect the country from another self-induced banking recession.   (However, Romney did admit that some regulatory reform especially in the mortgage industry was necessary.)

Oh , the candidates did have a smattering of other job “creation” ideas but none, with one exception, would directly put more money into the economy to create consumer spending—the “now” and “effective” approach we need.  The exception was Ron Paul who called for bringing all our military troops home from overseas and letting them spend their money here to boost our economy.

Surprisingly not one of the candidates mentioned House majority leader Eric Cantor’s proposal to give small business owners a 20% tax cut on their earnings.  And none came anyway close to calling for a direct government infusion of money into the economy such as increasing spending on infrastructure, something that President Obama and most business organizations large and small support.

Unfortunately, Rick Perry was not at this event due to the wildfires in Texas.  But as for Romney, Bachman, Paul, Gingrich and Cain; getting money to Main Street to help our small businesses was nowhere on their radars.

GOP debate in Columbia

Of all the upcoming GOP Presidential debates, the most important will be the one today in Columbia, SC.  The national media isn’t even mentioning this 6-candidate event both mainly because it is not really a traditional debate.  But the difference is what makes it more important.

Each candidate—Rick Perry, Mitt Romney, Michele Bachman, Ron Paul, Newt Gingrich and Herman Cain—is scheduled to appear on stage alone and be grilled by Senator Jim DeMint and Representative Steve King. 

The typical debate is typically a showcase for well-rehearsed applause lines.  But not this afternoon.  I trust that Mr. DeMint will be digging into issues to truly find that “conservative”, small-government candidate.  The responses will provide valuable insight into each candidate’s qualifications to be President and fodder for their primary and general election opponents.

I’ll be with the 400 guests invited to attend and will be listening for how each would create the jobs we desperately need. 

I expect that we’ll hear more about how shrinking government will unleash a massive growth in jobs even though as Paul Krugman points out the today in his New York Time’s, this economic philosophy is failing.

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers. And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.

And we’ll probably here from the candidates that it is government regulations and taxes that are standing in the way businesses hiring.

But this isn’t what McClatchy Newspapers recently found when they randomly sampled small business owners around the country and reported the results under this heading:  Regulations, taxes aren’t killing small business, owners say”.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

I’ll report back tomorrow on what I hear this afternoon.  You can watch for yourself on CNN, one of the digital SC-ETV channels and a live stream feed.