Whatever Happened To Small Business?

It’s funny, we’re not hearing a thing about how small business is doing in this dire economy. It’s as if small business—which was often described as ‘the engine for new jobs in our economy’—has suddenly dropped off the radar. And I suspect it is because small businesses are disappearing at a horrifying rate that they don’t want to tell us about.

You would think media would cover this all-important area of our economy, but the media is curiously silent. Media can go on endlessly about the dangers of swine flu, giving us more coverage than we’re ever going to need on that subject. Media can cover Nancy Pelosi’s feud with the CIA and the Republican Party for days on end, covering every little detail, every nuance, every conjecture—but not the state of small business in America. Media can give us all the latest poop (and I do mean poop) on Brangelina, Madonna’s adoption case, and Jon and Kate Plus Eight’s marital difficulties—but they can’t tell us how small business, the incubator of new jobs in our country, is doing.

What’s that about?

One can guess how small business is doing in the U.S. Consumers have rolled back their spending. Credit is tight or can’t be gotten at all—which means small business cannot get it to cover payrolls or material for upcoming jobs. Small business can’t get orders from larger companies either, because large industries have slowed down to a stop as well. Small business can’t do any hiring, because A) there’s no work for the new hires to do and B) small business is most likely still in the process of doing layoffs. Equity in homes, which often financed new businesses, has disappeared, so the start-up of new business is being hampered by the mortgage crisis and falling home prices. Small business is probably living on whatever credit they have left, which will require paying off in the future, so don’t expect any big gains there any time soon. Oh, and btw, small businesses can’t afford health insurance. With whatever customers they do have left pressuring them for rock-bottom pricing, there’s little money in there for the constantly rising costs of health insurance. So, if they do start hiring again, it will probably be jobs without health insurance.

I know this sounds negative. But this is reality. We spent too many years being told ‘the fundamentals of the economy are sound’ and running our lives as if that were actually true. That lie kept us from arranging our lives into more reasonable and realistic form, and cripples us now.

Small business is probably taking some of the biggest hits from the bad judgment and delusional thinking of the past 8 years. At least, that’s what I see in my little area, which is among the hardest hit.
Let’s hope somebody finally notices that small business needs a leg up, too--like the bailouts we are giving the big guys.